Medicare Open Season – Important Deadlines

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The Medicare Open Enrollment window for 2020 runs from October 15, 2019 until December 7, 2019. Individuals who prefer not to have responsibility for out of pocket costs might consider enrolling in a Medicare Part F plan, which covers most deductibles and out of pocket costs. It is critical to enroll in such a plan during the upcoming open season window, because Part F plans are being phased out and will no longer be available to Medicare enrollees who are not enrolled in such a plan, or have not elected to enroll, as of December 31, 2019.

Medicare Part C enrollment will also be phased out for individuals who have not enrolled in a Medicare Part C plan as of December 31, 2019. Medicare Supplemental Plans C are private plans that deliver Medicare Part A and B services through a private insurance company.

The bottom line is that seniors and disabled individuals who will be eligible for Medicare A prior to January 1, 2020 and who prefer Medicare Part C or F coverage will need to sign up for these plans during the upcoming open enrollment period.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

New PACE Program Regulations: Six Important Changes You Need to Know

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On June 3rd, the Centers for Medicare and Medicaid Services released a final rule that updates the program requirements for the PACE program (Program for All-Inclusive Care for the Elderly), a cost-effective program that helps keep frail, elderly individuals over the age of 55 in the home using Medicare or Medicaid dollars.  PACE organizations, also referred to as Living Independence for the Elderly (LIFE) organizations, are government or nonprofit entities delivering comprehensive care and services via an interdisciplinary team (IDT) to elderly and frail individuals ages 55 and over who are clinically assessed as needing nursing home care.

The new rule reflects 21st century service-delivery practices, communications and technology.

Here are six of the most impactful changes:

  1. Thirty (30) day deadline to complete the interdisciplinary plan of care. In rare circumstances, it may not be possible to make a timely assessment and care plan. In such cases, the PACE organization must document the specific circumstances why the initial assessment cannot be completed within the thirty-day period, and must detail the steps taken to provide immediate care as needed and to complete the assessment process and the plan-of-care as soon as feasible.
  2. Care delivery by non-physician primary care providers. Primary care and care management may now be provided by a nurse practitioner, physician assistant or a community physician duly licensed in accordance with state law, without having to obtain a waiver.
  3. Interactive remote technologies may be used to perform unscheduled reassessments. Video conferencing, live instant messaging, chat software and other media may be used by IDT members to perform an unscheduled reassessment in response to a request for a change in PACE services, where clinically appropriate and necessary to improve or maintain the patient’s overall health status. In order for the remote technology to be used, the patient or her representative must consent to its use.  In-person follow up may be warranted. Using remote technologies to perform reassessments may not be appropriate for medically complex patients.
  4. Mandatory attendance of the semi-annual reassessment meeting by the primary care provider, a registered nurse, and a Master’s-level social worker, with team members from other disciplines participating as needed in the professional judgment of the primary care provider, the registered nurse, and the Master’s-level social worker.
  5. Disenrollment for “disruptive behavior” on the part of either the participant or caregiver. In order to justify involuntary disenrollment, the disruptive behavior must jeopardize the patient’s health or safety or the safety of others. For instance, if a PACE participant who is able to make her own medical decisions repeatedly refuses to follow her plan of care, or if her caregiver exhibits threatening behavior which jeopardizes the participant’s health or safety, or the safety of the caregiver or others, involuntary disenrollment may be an option, after the PACE organization has ruled out alternative arrangements.
  6. PACE organizations offering qualified prescription drug coverage must comply with Medicare Part D prescription drug program requirements.

There are other major changes to the PACE program rules that may not directly impact the elderly and disabled. For more information, contact Jane at 856.661.2283 or by emailing jane.zimmer@flastergreenberg.com.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Top Tips For A Successful Medicaid Spend Down

Finding the best long-term care, and a way to pay for that care with public benefits, is of critical importance to the elderly, the disabled and their families.  The national median cost of long term care in a private room in a skilled nursing facility is over $9,000 per month, with the average statewide median cost ranging from over $10,000 to well more than $12,000 in other states, including New Jersey, New York, and as high as $24,000 monthly for a private room in Alaska.

Many seniors do not realize that Medicare will cover limited skilled care for a short period of time, and will not be an option to pay for the care they may need for the rest of their lives.  Fortunately, Medicaid and the Veteran’s Administration Improved Pension (or the Dependency Indemnity Compensation benefit for a surviving spouse), combined with the applicant’s income, are means-tested public benefits programs that can often pay for a lifetime of long term care facility and other medical care costs.

Benefit through these programs are limited to applicants with low assets and low income.  The rules for Medicaid eligibility are quite complex and vary somewhat from state to state based on the provisions of each state’s Medicaid plan.  For instance, in my home state of New Jersey, in order for a single individual to qualify for Medicaid, that individual’s countable assets must not be even one penny over the sum of $2,000.  In general, one cannot give away one’s money and receive institutional or waiver service Medicaid benefits within five years of the date of the gift without incurring a Medicaid penalty period.  (A Medicaid penalty period is the period of time during which Medicaid benefits will not be available to pay for custodial care. The length of the penalty period corresponds to the value of the total uncompensated gifts made during the five year Medicaid look back period. The Medicaid penalty period will not begin to run until the last of the following events to occur: there is a filed Medicaid application for the applicant, the applicant is clinically eligible for Medicaid, and the application is either already in a long-term care facility or other care setting permitted under any Medicaid waiver program in his or her state, such as the home or an adult medical day care facility.)

Elder lawyers refer to the process of legally reducing assets to a level below the Medicaid threshold as “spend down and conversion.”  Where one member of a married couple will apply for Medicaid, the spend down and conversion process must be carefully timed and for best results, should be started only after the prospective Medicaid applicant has entered into a nursing home or has a filed application for a Medicaid waiver program and has already been determined clinically eligible for Medicaid.  In order to avoid a Medicaid penalty period as a result of the spend down process, all payments should be for fair market value for the Medicaid applicant or his spouse.  A typical Medicaid spend down may include the repayment of debt for the Medicaid applicant or his or her spouse (but not for another adult, which would be an uncompensated transfer), the payment of legal fees for crisis Medicaid planning and a Medicaid application, payments for other services to the Medicaid applicant and his spouse, the payment of real estate taxes and other costs of home ownership, the purchase of irrevocable prepaid burial arrangements for the Medicaid applicant and his spouse, the payment of “key money” to facilitate the admission of the Medicaid applicant to the best long-term care facility available. (This can frequently require private payment for several months of long term care).  Where the applicant owns a home, he may consider repairs and deferred maintenance to the home, especially where there is a healthy spouse who will remain at home or if the home needs repairs and maintenance to facilitate its sale.  Many seniors may also consider buying a new car, or new household furnishing or personal goods.

The purchase of a life estate in a child’s home may be a suitable spend down strategy for an elderly parent who is presently independent but may need Medicaid in the next few years, the parent wishes to reside in the child’s home and the child is amenable.  A life estate is an undivided ownership interest in the real property and gives the holder the right to reside in the home during his lifetime as well as favorable capital gains income tax consequences and responsibilities for the home’s financial upkeep.  If the parent reside in the child’s home for a period of at least one year and the value of the life estate is properly computed and both parent and child execute a deed memorializing the life estate purchase, the parent’s payment to the child for the life estate will not result in a Medicaid penalty period.

One of the most powerful spend down strategies is the purchase of a Medicaid compliant annuity. This is an annuity which meets strict criteria in the federal Medicaid statute.  The annuity can be funded with either non-qualified or qualified retirement funds. If the annuity is non-qualified, the annuity contract must provide for equal monthly payments (with no balloon payments), be irrevocable, non-assignable and the annuity term must be for a period longer than the actuarial life expectancy of the annuitant, as calculated according to actuarial life expectancy tables promulgated by the Social Security Administration or the state of residence of the Medicaid applicant. The annuity contract must name the state from which Medicaid benefits are sought as either the first remainder beneficiary to the extent of any Medicaid lien, or the state is named in the second position after the community spouse. If these requirements are satisfied, and assuming that the Medicaid applicant is otherwise eligible for Medicaid, the annuity contract cannot be treated as a countable asset and the annuity purchase cannot result in the imposition of any Medicaid penalty period.  See 42 U.S.C. 1396p(c)(1)(G); Carlini v. Velez, 947 F.Supp.2d 842 (D.N.J. 2013).

Similar rules apply for a qualified Medicaid-compliant annuity contract.

Here is an illustration of why the Medicaid compliant annuity purchase can be a powerful strategy to retitle a couple’s assets and preserve funds for the healthy spouse to remain for years in the family home.

Example.  Mary and James are ages 80 and 85, respectively. James needs nursing home care and Mary needs assisted living care. Mary’s only income is an estimated $600 monthly from her Social Security benefit. James’ income is comprised of $1,200 from Social Security, and he is not a veteran.  After their home is sold, the couple has $438,000 in liquid assets and James is ineligible for Medicaid due to the couple’s excess funds.  Without Medicaid planning, due to their home states’ maximum community spouse reserve allowance, Mary would have to spend down approximately $310,000, in order for James to become eligible for Medicaid.  Fortunately, she can spend the sum of $310,000 on a Medicaid annuity, which will enable James to become eligible for Medicaid in the following month and will provide her with sufficient monthly income to pay for her assisted living.  If the term of the annuity is for three years and for 36 equal monthly payments to Mary in the sum of over $8,600.  Mary is now able to pay for at least four years of assisted living care and can remain comfortably in the community. After the annuity term expires, Mary will likely be financially eligible for Medicaid herself.

Spend down is also important for United States military veterans and their spouses who are seeking the Veteran’s improved pension or the Dependency Indemnity Compensation for a surviving spouse or child.  In computing the applicant’s net worth for this means-tested benefit, federal law allows a deduction for unreimbursed medical expenses.

Medical expenses can include costs paid for services from health care providers, custodial care and must constitute a payment for an item or service that is medically necessary; improves the disabled individual’s functioning; or prevents, slows, or eases an individual’s functional decline.

Medical expenses may include care by a health care provider, i.e., someone who can only be an individual appropriately licensed by the state or country in which the service is provided to provide health care in that state or country.  In-home care providers are not always subject to licensure.

The definition of “health care provider” in the final rule incorporates a licensure requirement and the term may include, but is not limited to, a doctor, physician’s assistant, psychologist, chiropractor, registered nurse, licensed vocational nurse, and a physical or occupational therapist. Other categories of deductible medical expenses (to the extent not reimbursed) include medications, medical supplies, medical equipment and medical food, vitamins, and supplements if prescribed or directed by a health care provider authorized to write prescriptions, adaptive equipment, or service animals, including the cost of any veterinary care, used to assist a person with an ongoing disability; the cost of transportation for medical purposes, i.e., to and from a health care provider’s office, health insurance premiums, smoking cessation products; and institutional forms of care and in home care, including hospitals, nursing homes, medical foster homes, and inpatient treatment centers.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

 

 

Do I Need A Physician Orders for Life- Sustaining Treatment?

POLST.jpgA POLST (physician’s orders for life sustaining treatment) is a portable medical order, signed by a doctor, which contains the treatment wishes of an individual who is either seriously ill, or medically frail. The physician’s orders help the individual exert some degree of control over their end of life care.

Some individuals nearing the end of their life do not want to receive emergency medical treatment.  If the individual is residing in a long-term care facility, the current standard of care during an emergency is that the facility must call 9-1-1 in an emergency and the emergency medical personnel must to take every reasonable means to safe a life.  In an emergency, the decisions makers under a health care power of attorney may not be able to be reached immediately, and emergency medical personnel will not have time to read a legal document.  If your loved one nearing the end of life wishes not to receive emergency medical services (such as intubation, cardiopulmonary rescuscitation, antibiotics, and other treatments), a POLST should be prepared and provided to the long-term care facility.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Once A Caregiver Child, Always A Caregiver Child

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In general, one cannot give away her assets and go on Medicaid within the next five years. If an individual who gives away assets (donor) applies for Medicaid within the sixty month period following the date of the last completed gift, the individual will usually be subject to a period of time during which Medicaid will not pay for their long-term care. The length of this period is related to the amount of the total gifts during the five year Medicaid look back period, and is referred to as a Medicaid penalty period.

An exception to the Medicaid penalty period and any Medicaid liens is the transfer of a home by an ill parent to a caregiver child.  If the child moves into the home of the parent, and provides such care to the parent for a continuous, two year period as will keep the parent from entering into a nursing home, then the parent may transfer the home to the child without any penalty period.  This authority for this exception comes from the federal Medicaid statute and is black letter federal law.

Since 2015, I have heard of several instances where a parent applying for Medicaid was awarded the caregiver child exemption while the parent was alive, and pursuant to the exemption, the home was transferred out of the parent’s name to the child.

After the parent’s death, the child is notified that the house is nevertheless subject to a Medicaid lien.

This should not be the case for several reasons. First, when the parent gives up any interest in the home by giving the home away to the caregiver child, the home is now beyond the parent’s future Medicaid estate and it cannot be subjected to a Medicaid lien.

In addition, any attempted claw back of the home into the deceased parent’s Medicaid estate, after the parent was previously determined eligible for Medicaid without any penalty imposed for the home transfer, denies the parent, the child and all subsequent third party bona fide purchasers of the home for value from the child, of due process without notice and an opportunity to be heard.  As a policy matter, these reports are very troubling because of the loss of evidence over the passage of years and because the new “policy,” which was not enacted with public rule-making, will seriously undermine the stability of real estate transactions statewide.

Options may include challenging the new notice in the Chancery Courts. For an assessment of your options, consult an experienced and knowledgeable elder law attorney.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

Support for New Jersey’s Unpaid Caregivers

Support for New Jersey’s Unpaid Caregivers

Caregiving, done well, can be the ultimate act of service and potentially a game-changer, enabling an elderly or functionally disabled individual to remain at home surrounded by their family, friends and happy memories.

However noble and important, caregiving often imposes a heavy financial, physical and emotional toll on unpaid caregivers, who statistically face a higher incidence of missed time from work, loss of employment, and of developing adverse emotional conditions such as anxiety, depression, and burn out, adverse health conditions and even physical injury.

The value of self-care on the part of the caregiver is essential. At a minimum, caregivers should take regular breaks, get physical exercise, maintain good nutrition and get plenty of rest, which is often easier said than done. With the number of elderly and disabled individuals reliant on care from unpaid caregivers projected to double by 2020, unpaid caregivers will face unprecedented challenges.

The state of New Jersey has taken up the challenge of supporting caregivers with recently enacted Public Law 2018, c166. Passed by the New Jersey legislature and signed by Acting Governor Sheila Oliver on December 28, 2018, the new law establishes the New Jersey Caregiver Task Force. The purpose of the task force is to evaluate existing supports for New Jersey caregivers and to develop recommendations for the improvement and expansion of caregiver support services within our state. The task force will take testimony from caregivers regarding the care duties performed, the sufficiency of caregiver training programs, the costs which caregivers face and their own personal caregiving experiences.  The task force will prepare a report with recommendations for new laws and regulatory or program changes to improve, expand and supplement existing caregiver support programs and systems within the state.

New Jersey’s new focus on caregivers is not unprecedented. In 2017, the state of Hawaii passed the Kapuna Care Act, which established the Kapuna Caregivers Assistance program to provide family caregivers who work with resources to help pay for care services for elderly individuals over age sixty residing in the community and requiring assistance with at least two activities of daily living or having substantial cognitive impairment.  Under the Hawaiian model, cash payments are available to help working caregivers defray some care-related costs.

At the federal level, the RAISE Family Caregivers Act was signed into law on January 8, 2018, and directs the Department of Health and Human Services to develop, maintain and update a National Family Caregiving Strategy and to convene a Family Caregiving Advisory Council. The Act defines family caregivers as adult family members or other individual having a “… significant relationship with” and providing “a broad range of assistance to an individual with a chronic or other health condition, disability or functional limitation.” The bill is designed to specify recommended actions which can be undertaken by federal, state, and local governments, communities, health care providers, and long term services and supports to assist family caregivers.

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.

7 Tips to Effectively Communicate with Someone Who Has Dementia

Dealing with DimensiaSometimes, the world can look completely different depending on your vantage point. This past summer, national news reported that an eighty-seven-year-old cognitively impaired woman was brutally tazered in the chest, handcuffed and arrested for trespassing after wandering onto private property holding a knife near a local youth club to gather dandelions.  I suppose that this lady must have left her home that day with the notion of gathering flowers. I wish that I had the benefit of her perspective as the situation unfolded.

Some months ago, a local long term care facility put on a virtual dementia tour so that caregivers and elder care industry professionals could briefly experience the world through the vantage point of an individual with dementia. With mittens on their hands to simulate arthritis, inserts in their shoes to “experience” neuropathy, goggles dimming their vision, and incomprehensible sounds blasting throughout the tour causing frustration and confusion, the participants were given instructions to follow, instructions which made no sense. The experience helped me to appreciate how different our world looks to someone living with dementia and how very emotionally vulnerable they must feel.

Keeping their sensitivity in mind, here are some simple strategies to facilitate communications. The tips were generously shared by Angela Lunde of the Neurology Department of the Mayo Clinic in Rochester, Minnesota.

  1. Get down on it. Dementia can be accompanied by a decline in peripheral vision. How much would you understand and how would you feel if you could only see the torso of the person speaking to you? Kneel or sit beside the demented individual to get down to their eye level.
  2. Go slow. Individuals with dementia may process sounds at a slower speed and short term memory loss can impede their immediate recall. Pausing as you speak can help these individuals “catch up” and understand your words.
  3. Louder does not always mean clearer. Speaking in a loud voice can inadvertently escalate a difficult situation.
  4. Combine choice with control. Too many choices can be confusing. Give just two choices instead.
  5. Be inclusive. Dementia training should not be confined to long term care facilities, rehabilitation centers and hospitals. Our communities should work to reduce stigmas and train public service employees and business people on how to be “dementia friendly.” This is good for business and contributes to improved safety and quality of life for the cognitively impaired in the community.
  6. Keep it Light. Natural light, that is. Keep curtains and blinds open during the day. Watch out for distracting reflections from window panes and glare from artificial lighting and deep pools of bright light, especially on stairs and in bathrooms.
  7. Go Outside. Yes, your mother was right! Going outside to enjoy nature is good for you. Exposure to sunlight contributes to good sleep hygiene in setting your circadian rhythms and is linked in studies to decreased blood pressure. This is especially important for individuals ages forty-five to sixty-one, in light of a recent medical study associating mid-life hypertension with an increased risk of dementia, compared to those with no or low hypertension. Abell JG, Dugravot A, et al., European Heart Journal 2018; June 12.

For further information regarding dementia, additional dementia resources can be found online by visiting:

Questions? Let Jane know.

Jane Fearn-Zimmer is a shareholder in the Elder and Disability LawTaxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.