Medicare Open Season – Important Deadlines


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 an Elder and Disability Law, Taxation, and Trusts and Estates attorney. 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


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.

Jane Fearn-Zimmer is an Elder and Disability Law, Taxation, and Trusts and Estates attorney. 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 an Elder and Disability Law, Taxation, and Trusts and Estates attorney. 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.

It’s Important to Choose Where Hospice Is Provided

Jane Feanr Zimmer on how it's important to choose where hospice is provided

It is understandable but unfortunate that family members frequently hesitate to broach the subject of end of life care. Instead of avoiding the subject, have a sensitive and frank discussion of hospice as a vehicle for comfort care, pain relief, and counseling for the patient and the family members.  A growing body of literature indicates that the setting for hospice services may be impactful.

Growth in hospice services is soaring, with 2016 Medicare spending for hospice related goods and services reflecting an estimated 53 percent increase since 2006. See U.S. Dep’t. Health and Human Services, Office of Inspector General, Vulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity: An OIG Portfolio, OEI-02-16-00570 (July, 2018). Medicare will pay for general supervisory services, an interdisciplinary plan of care services by hospice physicians, and four levels of hospice care, which range from routine in home care, general inpatient care for pain control or symptom management that cannot be controlled outside of a hospice inpatient unit, a hospital or a skilled nursing facility.

The hospice benefit is much more than pain relief and palliative care. A panoply of end of life services may be available. Such services may encompass care provided by specially trained doctors, nurses and home health aides, medical equipment including hospital beds, wheelchairs and walkers, catheters, bandages and other medical supplies, pain management medication, dietary counseling, grief counseling for the patient and family members, speech therapy (to facilitate swallowing) and short-term respite care. The trade-off for the Medicare hospice benefit is that by electing hospice, the patient waives the right to receive curative treatment funded through Medicare. This can be a very difficult decision.

In addition to Medicare, other sources of funding for hospice services include most states’ Medicaid plans, the Veteran’s Administration or private insurance. Click here for more information. Dual eligibles, who are enrolled in both the Medicare and the Medicaid programs, can have hospice covered by Medicare, with Medicaid paying for the patient’s room and board in an institutional setting.  A much smaller percentage of hospice enrollees have their hospice financed through Medicaid.

Hospice services are most typically provided in a private home setting, with those patients who are medically complex receiving more nursing services than those residing in an assisted living or skilled nursing setting. The 2018 OIG report cited concerns with the adequacy of services and the quality of care to hospice patients residing in skilled nursing facilities and with those receiving hospice care in an inpatient setting. According to the 2018 OIG report, an estimated 31 percent of hospice enrollees in a skilled nursing setting are not receiving all of the services outlined in their hospice care plans, and in an estimated 9 percent of inpatient hospice stays during 2012, hospices did not provide adequate nursing, physician or medical social services.

The OIG report also found that hospices failed to meet plan of care requirements in an estimated 85 percent of general inpatient care stays in 2012. Where the hospice enrollees symptoms or pain could not be effectively managed, the beneficiaries were potentially left in pain for days. The OIG report cites an example of a hospice billing Medicare on behalf of a 101-year old beneficiary diagnosed with dementia, with uncontrolled pain during the 16 days of general inpatient care. The OIG report alleges that the hospice did not change the patient’s pain medication until the last day and did not provide him with a special mattress for more than a week.

CMS’ HospiceCompare website, a relatively new online tool intended to facilitate decision-making regarding which of several local hospices to select, was criticized in the OIG report because it “…does not include critical information about the quality of care provided by individual hospices and offers no information about complaints filed against individual hospices. “ OEI-02-16-00570 (July, 2018), at page 7. Complaints against hospice companies may be filed with state licensing agencies and/or the Joint Commission on Accreditation of Health Care Organizations.

According to the OIG report cited above, the greatest increase between 2010 and 2016 was in hospice enrollees in assisted livings, which increased 64 percent in number. One take away is that in selecting an assisted living facility, your clients will need to know whether and by whom hospice services, if needed, can be delivered in the assisted living facility of their choice.

There is a growing body of medical literature supporting the proposition that the setting in which hospice services are delivered can potentially impact the quality of hospice care as well as the satisfaction of both the hospice beneficiary and the family. This impact was the focus of a recent medical study published in the Journal of the American Geriatrics Society. Kathleen T. Unroe, M.D., MH.A., Timothy E. Stump, M.A., Shannon Effler, M.S.W., Warizhu Tu Ph.D., Christopher M. Callahan, M.D., Qualify of Hospice Care at Home vs. in Assisted Living Facility  or Nursing Home, J. American Geriatrics Society (Feb. 10,. 2018). The article summarizes the results of a retrospective cohort study of 7,510 individuals receiving hospice services and notes a positive correlation between the receipt of hospice services in a private home or an assisted living setting and higher levels of patient care and patient and family satisfaction. By contrast, the study reported a lower correlation between hospice services in a nursing home setting and patient care and patient and family satisfaction levels. The study measured the incidence of important patient concerns in several areas including emotional support to the patient and the family, delivery of services to the patient, and communicating issues. For instance, 67.8 percent of patients receiving hospice services in the home reported excellent overall service quality, as did 64.3 percent of hospice patients receiving the services in an assisted living setting, contrasted with only 55.1 percent of hospice patients in a skilled nursing facility. Overall, 5.7 percent of the study’s answering participants reported a problem with hospice personnel not knowing the patient’s medical history, with 5.5 percent reporting having experienced this in a home setting, 5.3 in an assisted living setting but rising to 6.3 percent of individuals receiving hospice services in a nursing home.  Approximately 27.7 percent of the study’s respondents reported that the family was not always kept informed about the patient’s condition. This was reported by 21.2 per cent of respondents receiving in home hospice services, 32.8 percent of responders who received hospice in an assisted living setting and 35.2 percent of responders experiencing hospice services in a skilled nursing environment. Likewise, 4.7 percent of responders overall reported less than optimal pain management, with 4.5 percent of responders receiving hospice services in the home, and 3.9 percent receiving hospice services in an assisted living facility reporting this, as contrasted with 5.5 per cent of responders receiving hospice services in a nursing home.

Questions? Let Jane know.

Jane Fearn-Zimmer is an Elder and Disability Law, Taxation, and Trusts and Estates attorney. 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.