Save your Selfies for the Medicaid 5-Year LookBack

Readers of this blog know that when he time comes to apply for New Jersey’s Medicaid/MLTSS program for either home care, assisted living care of nursing home care, a daunting array of proofs is required. The burden to prove eligibility is placed on the applicant.  Every single expenditure made by the applicant and their spouse during the previous 5 years is open for scrutiny, to see if it was really an expenditure or if it was actually a gift to somebody else. Every check written, every auto-debit, every wire transaction, every cash withdrawal is questioned. Many kinds of transactions are presumed to be gifts unless the applicant can prove otherwise. People who share their residence with other family members may find this process particularly hard to unravel because of the intertwined sharing of expenses. People who never managed the applicant’s affairs but are now stepping in may find it impossible to answer the hundreds of questions that are posed to them by the agency.

So save your selfies, save your receipts, save your letters and invoices and proofs that you took trips and excursions. Take pictures of your big purchases, and pictures of your caregivers. Keep detailed records of everything, as well as copies of all financial records and cancelled checks. Find your insurance policies, deeds, mortgage payment receipts,  and keep them with these records. Make sure your “trusted someone”  knows where they can find all these proofs when necessary. Banks are charging exorbitant fees to produce copies of statements and checks, so elect to receive statements & cancelled checks or make sure you receive them electronically. It seems you can never have too much proof. Collect and save the medical records. Save all of this for at least a five year period on an ongoing basis.

Forewarned is forearmed. The grueling MLTSS application process can be just a bit easier if you retain your records.

Call us for help with Medicaid applications for long term care ……. 732-382-6070

Medicaid annuity planning is alive and well in NJ

When a person applies for Medicaid under the NJ MLTSS program after having made gift transfers during the most recent 5 years, there will likely be a penalty period in which Medicaid will not pay for the care that this person needs (unless the transfers were exempt, such as transfers to a spouse or disabled child). This transfer penalty is mandated by federal law, and the greater the amount that was transferred, the longer the transfer penalty will be. If an applicant addresses this issue before the end of his spend-down period, there may be opportunities to protect the applicant by using some of the spend-down funds to purchase an annuity contract that can provide the income needed to pay for care during the penalty period.

The type of annuities that fit the bill are highly restricted and are not designed to maximize the rate of return the way conventional annuities might be. The reason that the technique works is because under federal and state Medicaid law, a distinction is made between “income” and “resources.” Resources must be reduced to a certain level before the person can even apply for benefits. Income, on the other hand, is usually received on a monthly basis and is turned over to the facility as a contribution towards the cost of care (with certain deductions). For the annuity plan to work, the contract cannot be countable as a “resource” as defined by Medicaid law. We had successfully litigated an IRA annuity case with the NJ Division of Medical Assistance and Health Services (DMAHS) in 2009-10 (the P.K. case) PK FAD  A few years later, after several cases were decided in out of state venues,Lopes 2nd Cir ; Carlini we successfully litigated a non-IRA annuity case against DMAHS in 2013 (the M.W. case; M.W. FAD 1-28-140001 M.W. Initial ALJ decision ) leading to confirmation that if properly structured, an annuity effectively transforms countable resources into an irrevocable stream of income. If properly done, this technique can provide protection for the Medicaid applicant as well as his/her community spouse, and can also help to assure that there is a way to pay for care during an anticipated Medicaid penalty period.

Seniors who are planning for their care have many tools in their toolbox; the question is always which tools to use and how to get the results that the senior needs.

Call us to discuss a Medicaid spend-down plan that suits your circumstances … 732-382-6070

Save your receipts and bills for five years, for the look-back

If medical catastrophe strikes and someone in your family needs nursing home care, they may want to apply for Medicaid to pick up those costs.  The regulations are complex, but there are lots of legal strategies that we use to help a person become eligible and to protect the rest of the family at the same time. The process doesn’t stop there, though. The applicant has to prepare and file an application for Medicaid, which we do for people through their local board of social services. And to support this application, we need five complete years of documentation. We can be most effective for you and seniors in your situation if the application is complete.

To best protect your ability to pursue a Medicaid application should it be necessary, save every bit of documentation. Bank statements, cancelled checks, credit card statements, receipts, withdrawal and deposit slips, and tax returns. Photographs of things you bought for cash. Proof that a person who you’ve hired is actually working for you. Are you worried about Mom or Dad? help them create a system to save all this paperwork on a rolling five year basis. The burden of proof is on the applicant within the framework of the published laws, but time and again we see that applications are being denied for failure to produce proofs. It is easier to save these things as you go along than to try to track them down later in the midst of applying for Medicaid.

The 5-year lookback requires the agency to scrutinize all transactions that occurred during the 5 years preceding your application. We have to prove that money which was spent was used to purchase goods and services, and wasn’t used to make gifts. This means a lot of paper verification. So save those bits and scraps, keep things organized, and call when you are ready to apply.

Call us about elder care planning for seniors and for Medicaid eligibility planning and applications … 732-382-6070

New Jersey Supreme Court Committee Issues Opinion on Unlicensed Practice of Law in Medicaid

The Committee on the Unauthorized Practice of Law (UPL) of the New Jersey Supreme Court has issued UPL Opinion 53 Medicaid Advisors 5 16 16.  It concluded that non-attorney Medicaid application preparers, Medicaid advisors and assistors would be engaging in impermissible UPL when they give advice on “strategies to become eligible for Medicaid benefits, including advice on spending down resources, tax implications, guardianships, sale or transfer of assets, creation of trusts or service contracts, or the like.”

UPL can be very serious; under N.J.S.A. 2C:21-22, it is a crime of the third or fourth degree depending on the circumstances, and under N.J.S.A. 2C:21-22a, it can be the basis of a civil suit resulting in three times the value of all costs incurred by the victim as a result of the defendant’s criminal activity, including any fees paid to the defendant for services, costs incurred for attorneys’ fees, court costs and any out-of-pocket losses.  Criminal prosecution is not required for civil action under N.J.S.A. 2C:21-22a.

Why is this an issue? Allowing somebody to just assemble and file your application without providing you with the important legal analysis could deprive you of necessary asset and family protection. And as a consumer/applicant, you may not even know just what favorable legal options you’re missing out on.

As you can tell if you’ve been following this blog the last few years, applying for Medicaid to pay for nursing home care for your mother with Alzheimers is hardly a walk in the park. It’s not just a matter of compiling a 5-year  stack of account records and sending them in. There can be legal problems such as timing; lack of authority to access information; ownership of assets; providing the sufficient proof to meet the applicant’s legal burden; legal authority to transfer assets; impact of transfers on other creditors; or interpretation of a law as it applies to the specific situation. And there are opportunities to protect the other family members, but those require legal interpretation and strategy. Over the last few years, I  encountered several really sad cases where assets could have been transferred to a child under 21 or a disabled child or a spouse. Instead, by relying on the advice of a non-attorney, the spouse of the applicant paid the nursing home hundreds of thousands of dollars before they learned –from me, as an elder law attorney — that they could have become eligible for Medicaid a few years prior.

Elder care is a team effort.   Allowing somebody to just assemble and file your application without providing you with the important legal analysis could deprive you of necessary asset and family protection. And as a consumer/applicant, you may not even know just what advice you’re missing out on. Attorneys, accountants, social workers and other professionals should work together for their elderly clients, know the boundaries of the advice they give, and always put the client first.

Call us for advice and representations on Medicaid applications, appeals, guardianship and protective arrangements … 732-382-6070

The system puts a heavy burden on applicant to prove Medicaid eligibility

In A.T. v. Division of Medical Assistance and Health Services (unpublished non-precedential decision, Appellate Division of Superior Court, 2015, WL 7421647), a Medicaid application was denied for failure to provide requested verifications of assets. The applicant’s grandson (DT) was her Agent under Power of Attorney (“POA”), and his father ST was the alternate Agent. The application was initiated by one of them. Both ST and DT received a Verification Form from the County Board of Social Services on three separate occasions that asked fort a litany of additional information. The court sustained the denial, holding that failure to provide the documentation impeded the Board’s ability to determine whether certain assets were available to A.T. or not.

An application for Medicaid requires 5 years’ of financial records, including deeds, copies of cancelled checks, and sometimes even old receipts or credit card statements. Generally, an Agent under a Durable General Power of Attorney should have the authority to request and obtain all of the needed records from third parties even if those records are considered confidential under other laws. It’s a huge job and its a real pity when a qualified applicant gets turned down because some of the papers haven’t been produced. Although it can take 6 months or more before a complete application is actually reviewed in some counties, the minute the applicant or their agent receives the letter asking for better proofs, they need to jump on it because the agency typically provides a very short window of opportunity, like 10 days.  Then what happens is that the applications get denied if this deadline passes.

What if the applicant is incapacitated and has no agent under power of attorney and no legal guardian? Sometimes the party presenting the application is the nursing home, or is the next of kin who is authorized to file a Medicaid application under Medicaid law, but lacks legal authority under other law to actually demand copies of confidential records from banks etc. Not only are the assets inaccessible, but there may be no authority to get access to the historical records for purposes of the 5-year look-back. In a situation like that, the applicant’s representative needs to remind the agency that there is nothing accessible so the person is eligible for conditional benefits because the law requires that benefits be provided. The representative can then ask an attorney to file an appropriate type of legal suit to get authority for production of necessary records.

Call us for advice on Medicaid applications, appeals, guardianship and protective arrangements … 732-382-6070