Linda Ershow-Levenberg, Esq.

About Linda Ershow-Levenberg, Esq.

Linda is the managing partner at Fink Rosner Ershow-Levenberg, LLC. She takes care of legal problems involving people who are aged or who have disabilities, by protecting access to government benefits and helping them make the necessary arrangements for life-long assistance or care. Linda has been certified in Elder Law (C.E.L.A.) by the National Elder Law Foundation since 1999. She strives to provide her clients with responsive representation delivered with personal attention, compassion, and commitment. Find out more about Linda Ershow-Levenberg

Elder penalized for wages paid to family caregiver, due to insufficient evidence

When a person applies for Medicaid to pay for home care or nursing home care, a penalty will be imposed if assets were given away during the preceding five year “look-back” period. There are numerous regulations in federal and state law  concerning “uncompensated transfers,” which are gifts.  A “gift” is distinguished by law from a “payment for goods and services at fair market value.” In general, any transfer of money from a Medicaid applicant to their family members during the look-back period will be suspected to be a gift unless there is credible proof that it was payment for something. For example, the child may be employed by the parent, or the child may have sold something to the parent. The applicant must show that the payment was not a gift.

In situations where the elder is paying their family member on an ongoing basis to provide home care services, the proofs become very important, so as to prove that this is wages and not a “gift.”  Greater scrutiny is given to those situations than to the situation where a non-family member is the paid Aide. Extensive evidence is needed to satisfy the agency that the work was actually done, that there was specified terms of employment, and that the wage was consistent with prevailing wages (i.e. not a wage of $70 an hour for work which is normally paid for at $15 an hour). A written contract isn’t explicitly required, but a recent case strongly suggests that it is needed.

Suppose, though, that the child is being paid now for caregiving services that were allegedly provided in the past? A payment made after the fact to a family member for alleged caregiving services is presumed to be a gift, if services were performed for free before the payment was made and there was no pre-existing written contract spelling it all out.  For such situations, the burden of proof is on the applicant to produce “credible documentary evidence preexisting the delivery of the care or services indicating the type and terms of compensation,” as well as proof that the wage was at “prevailing rates for similar care or services in the community.”  N.J.A.C. 10:71-4.10(b)6.ii.

The recent decision in E.B. vs. DMAHS  illustrates the common problem all too well. The decision is not approved for publication, which means it is non-precedential and is limited to its facts and the parties in the case.

E.B. moved into her daughter’s home, and the daughter began providing some  caregiving services when she was not at her job. After two years,  the daughter quit her job and became the full-time aide. The absence of income began to create a hardship for her. She was the Agent under Power of Attorney for her mother. She did some research about prevailing wage for this kind of work, and then using her mother’s funds,  she began to pay herself $10 per hour for 40 hours a week of home care companionship services plus $25 per week for the two-and-a-half hours she claimed she spent each week to shop for petitioner’s food, medication, and toiletries, “for a total of  $425 per week from April 2011 to May 2013, when petitioner entered the nursing home. J.W. did not keep a ledger of the services she provided and the days and hours she performed them. J.W. claimed that, when lucid, her mother understood and agreed to J.W. paying herself from petitioner’s funds to compensate J.W. for her services.”

When E.B.  applied for Medicaid to pay for her care, she was penalized for the $69,211.90 she had paid her daughter. (note that this amount divided by $425 is just over 36 months, so part of the payment must have reflected post-facto payment for work previously done). After a hearing with testimony and other evidence at the Office of Administrative Law, the penalty was upheld by the Division (DMAHS), and this appeal followed. The Appellate Court upheld the penalty.

The Administrative Law Judge found that (1) there was insufficient proof of the actual tasks performed, (2) there was insufficient proof that  rate selected was prevailing wage, and (3) there was no pre-existing written contract. The Judge held it against her that she began receiving wages when it was “foreseeable that [petitioner’s] advanced age and deteriorating condition would require intensive care and the possibility of entering a nursing care facility.”  This is a completely irrelevant consideration, as a person receiving care in the home would otherwise have to BE in the nursing home!!  The Director of Medicaid affirmed those conclusions.

The primary problem for E.B. was that the Medicaid Agency was not satisfied with the proofs provided.  The Appellate Court emphasized that there was no written agreement specifying terms of employment, and there were no records showing exactly what work was done, when and how. However, the Court was harsh, criticizing the daughter for choosing to be the caregiver rather than hiring somebody outside the family. I find this criticism deeply disturbing and unfair. National and state policy encourages people to take care of their family members, and in fact, the Medicaid home care program is only part time because it is presumed that there is someone available to fill in the gaps. Further, the Court did not distinguish between the payments for ongoing work and the payment for work previously done.  The Court found that “Petitioner did not rebut this presumption. She did not provide the requisite “convincing evidence” the asset was transferred exclusively for some purpose other than to establish eligibility. First, J.W. did not show why she could not have paid a competent professional ten dollars per hour to take care of her mother, which would have freed her up to return to work. As a former claims adjuster, presumably J.W. was capable of earning more than ten dollars per hour and, thus, would have been in a better position to address her budget needs. Further, while a third party may not have been a relative, that does not mean a competent professional caretaker could not have been located to meet petitioner’s needs.amount of proof that this was payment of wages for work that was actually done.”

The lesson here is that it is still perfectly legal for children to be employed by their parents to provide senior care in the home. However, the demands of the Medicaid program for elaborate proofs to disprove the notion that a payment was a gift require the applicant to prepare a strong paper trail coupled with  enough corroborating formal evidence to satisfy a state auditor. Informal verbal arrangements will not be sufficient. Assembling proof beyond a reasonable doubt is the safest approach to take.

Call for advice about home care plans, employment contracts, Medicaid applications and appeals …. 732-382-6070

Don’t be the Executor if you can’t do the Job

When you create an estate plan, you are selecting people whom you trust to perform various jobs for you and your beneficiaries. You may be selecting an agent to act as your Power of Attorney. You may select a medical decision-maker in case you become mentally incapacitated. You may have a Trust and select the Trustee who will manage the money for the beneficiaries. And you may be selecting an Executor who will handle your estate after you pass away

People often feel that being named as Executor is a big honor. Disputes have erupted within families when one child rather than another was named as Executor. Sometimes the person who was named as Executor wants the power and control that come along with the title of Executor, but ignores the responsibilities that come with it. Other times, the Executor has financial troubles of their own, starts “borrowing” funds from the estate, and just lets the estate lie around for years without paying the bills, paying the inheritance taxes or selling the property.

The Executor is a fiduciary — entrusted by law to handle “other people’s money” — and has duties to the funeral home, the tax authorities, the estate’s creditors, and ultimately, to the beneficiaries. Although an Executor is not obligated to reveal every step and every action to the beneficiaries, at some point, the beneficiaries will want to see an accounting so that they know that the amount of their distribution is correct. Reconstructing an accounting after several haphazard years of erratic management of estate assets can be a nightmare that leads to lawsuits brought by beneficiaries.

Managing an estate can be very time consuming. Dealing with third parties to obtain date-of-death values and payoff amounts for debts, tracking down missing assets, and selling real estate can turn into big chores. But the Executor has those duties and obligations.

Ideally, every Will has a list of successors written into it in case the Executor refuses to accept the appointment or decides to resign. But turning over an estate to a successor can create problems of its own, and a process must be initiated through the Surrogate or Court to be discharged as Executor.. Better to think carefully before stepping up to the plate and taking on the responsibility in the first place if you have any doubt of your ability to complete the task.

Call us for advice and assistance with estate administration, and ask about the fiduciary services we provide .. 732-382-6070

 

Will Medicare ever pay for nursing home care?

Consumers of health care in old age likely consider nursing home care to be part of the continuum of health care that a patient may require. Yet health insurance plans do not pay for nursing home care because it isn’t defined as “treatment.”  Instead, it is classified as long-term care rather than “health care,” because the care is maintaining the individual and not really treating-to-improve a chronic or permanent health condition.

The 2017 Long-Term Care trends poll of the Associated Press-NORC Center for Public Affairs Research Survey revealed that more than half of those polled believe that Medicare and health insurance companies should cover some or all of these costs and that the federal government should be doing more to provide financial support to those who are providing the care in the home setting. This was the survey’s finding among those who identified as Republican as well as those who identified as Democrat.

A bill to start addressing an aspect of this issue was introduced in Congress by Sen. Orrin G. Hatch, R-UT, and is S-870.— “Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017.” So far, the bill has been approved/passed by the full Senate. The Act  is designed to give some Medicare providers additional flexibility in the way they care for people with chronic conditions. This could be a first step toward including chronic, non-improving conditions in the category of “health conditions” for which Medicare dollars could be applied.  Co-sponsors include Ron Wyden (D-OR), Johnny Isakson (R-GA) and John Warner (D-VA). Read the legislation.

If this issue is of interest to you, contact your Representatives.

For advice and representation on nursing home care planning and challenges, contact us at …… 732-382-6070

Great Reasons to Update your Will Once in a While

The years really fly by. I can’t tell you how many times some one has come in to meet with me who signed a Will 25 years before and never updated it. When major changes occur in your life, it’s important to see your lawyer for a “check up” to make sure that your old Plan is still a good Plan for you. Here are samples of situations I have encountered, which required an updated Last Will and Testament and updated beneficiary designations on assets such as life insurance or tax-deferred accounts:

  1. Grandchild has severe disabilities, will be unable to support himself, and depends on programs that require Medicaid eligibility. An outright inheritance could be disastrous.
  2. Child has acquired substantial debt or is in the midst of a divorce.
  3. Beneficiary turns out to be a major spendthrift  and should have somebody controlling and managing his inheritance.
  4. You no longer have a relationship with the people you listed as your Executors.
  5. Your designated Executor or Trustee has passed away.
  6. You want to guarantee that certain charitable bequests will be made.
  7. You want to leave money to your grandchildren as “something special,” even though the rest of your estate will go to your children (their parents).
  8. You have a Will from the 1990’s that left the “credit shelter amount” locked up in a trust for your surviving spouse to minimize estate tax in the estate of the 2nd spouse to die, yet now, there is no NJ estate tax and no federal estate tax for almost everyone
  9. You left a beneficiary’s share in a Trust under your Will, but now she is older and fully capable of managing her own assets.
  10. Your spouse is going into a nursing home and you want to limit the amount s/he inherits if you pass away first.
  11. You got married, gave birth or adopted a child, or you want to leave some assets to your step-children.

Whatever has changed, family estate planning should be an ongoing process throughout your life, starting at age 18 and moving on from there.

Call us to set up a plan that works for you …… 732-382-6070

 

Medicaid Applicant is Entitled to Actual Notice of Deficiencies of Application

As my readers know by now, a Medicaid application is comprised of five years’ of financial records for every single asset and transaction that occurred during the 5-year “look-back” period preceding the application, along with a host of “personal identifiers” and proofs pertaining to income, marital status, legal residency, birthdate and more. If an application is incomplete, the risk of rejection/denial is high. If the county board of social services asks for yet additional detailed proofs that are hard to come by, the risk of rejection/denial is also high. The person who takes responsibility for the application has a big job to do. Although a person can always reapply for benefits if they are still eligible, there is only a three month retroactive period, so the risk of denial can carry tremendous financial consequences.

As a matter of due process, an applicant for government benefits is entitled to actual notice of deficiencies in the application before the agency takes the severe step of denying the application. New Jersey’s regulations provide that the county welfare agency has the “responsibility” to “inform the applicants about the purpose and eligibility requirements under its provisions,” and the applicant must “assist the CWA in securing evidence that corroborates his or her statements. ” Normally, an application should be processed within 45 days, but the agency can take longer if it can be shown that the delay resulted from “a determination to afford the applicant, whose proof of eligibility has been inconclusive, a further opportunity to develop additional evidence of eligibility before final action on his or her application.” N.J.A.C. 10:71-2.3.  Also, :the eligibility worker is initially responsible for the recommendation for approval or denial.” N.J.A.C. 10:71-2.12. Taken as a whole, it can be seen that first, an application is submitted with supporting verifications, then the eligibility worker goes through it and determines what else is needed, and then the worker must communicate those needs to the applicant, because otherwise, the applicant cannot “assist” the caseworker to determine eligibility.

A recent decision illustrates that an application cannot be denied for failure to provide verifications without proof that Notice was actually provided. In R.P. v. Div. of Med. Assistance and Health Servs., [non-published, non-precedential; holding is limited to its facts].  the application was being handled by the applicant’s step-daughter. After the application was filed, the eligibility worker made oral request for certain additional documents. At a certain point, a letter was allegedly sent stating that the application was pending and would be denied for Failure to provide Necessary verifications if the documents weren’t submitted by a certain deadline. After that, the Denial was issued.  The appeal was filed within the 20-day time limit. At the hearing before an Administrative Judge (ALJ) of the Office of Administrative Law, the applicant argued that they had never received any written notice of the documents that were still needed. The ALJ found that a notice had been mailed, albeit to the wrong zipcode, and upheld the denial. The Director of Medicaid adopted that initial decision, and this appeal followed. 

The Court remanded the case for further proceedings because the record had no proof that the applicant had actually been served with Notice that the application was at risk of denial due to missing verifications.  The applicant also argued that the agency had a duty to gather up missing documents; this contention was rejected by the Court, as was done in other recent cases,  finding that the burden to produce proof of eligibility is on the applicant, not the agency.

 

Call us for representation on Medicaid Applications, eligibility plans, fair hearings and appeals ……. 732-382-6070