Please! Set up that QIT before filing the Medicaid application!

“What on earth is a QIT?” Under the New Jersey Medicaid program, there are some extra hoops to jump through when the applicant’s gross monthly income from all sources exceeds $2,205.00. This number is colloquially referred to as the “income cap,” and up until late 2014, it created a hard barrier to eligibility for home and community-based Medicaid services for higher-income applicants, and it placed recipients into the “Medically Needy” nursing home Medicaid program. The general rule with Medicaid is that the applicant must turn over all of their income to the nursing home except for specific authorized deductions, such as a Personal Needs Allowance (recently raised to $50/month), health insurance premiums and support of the community spouse. Simple enough. For the higher-income individuals, however, they must funnel the income through a Qualified Income Trust or QIT.

I’ve written about this process before. The QIT is an irrevocable income trust for sole benefit of the Medicaid applicant, and the State is the first remainder beneficiary at death of the Medicaid recipient. The State published a template as well as an instruction sheet for the helpful family member and the bank, to help everyone understand how to set it up. So what’s the problem? The problem is that when a Medicaid application is filed at the County Board of Social Services, the applicant’s family member/ representative  might be told “don’t forget, you have to set up a QIT.” They may be given the State’s forms. They may not be told that it must be done immediately. What they aren’t given is step-by-step instructions on just what this “thing” is, how it has to be administered, and what the Trustee’s responsibilities are from month to month. It can be very difficult for the family member to reach the caseworker for follow-up. Despite the fact that state Medicaid regulations specifically require the local agencies to assist the applicants to secure eligibility, little help is provided on the QIT process. If that weren’t enough, some banks just don’t understand the process. In one of my recent cases, the branch manager of a major bank insisted that this trust could only be established through the corporate office — totally wrong advice. Sometimes, the family member just throws up their hands and walks away from it.

The big problem is that even if the individual is financially eligible to receive Medicaid benefits for his or her nursing home care, failure to set up the QIT will result in denial of Medicaid eligibility. This will have disastrous results for their spouse, who may be on the hook for tens of thousands of dollars in nursing home bills.

The QIT must be established no later than the month prior to the first day of the first month in which you want Medicaid eligibility for nursing home services. Then as soon as the income arrives, it can be funneled through the Trust and allocated as required.

Call for advice on establishing QITs and all other nursing home Medicaid issues … 732-382-6070

Unsure about VA Burial? Now You Can Inquire in Advance.

Setting up meaningful funeral and burial arrangements is an important component of estate planning and end of life planning.  Many veterans are unsure about whether they or their family members are entitled to burial in a VA Cemetery.  Family members may not realize that  VA burial is a possibility and may miss an opportunity despite the fact that service in the military was very important to the identity of the decedent.  Now, the VA is taking steps to let everyone figure out what burial services are available to veterans and their families well before death.

Eligible individuals are entitled to all of the following: burial in any open VA national cemetery, opening/closing of the grave, a grave liner, perpetual care of the gravesite, and a government-furnished headstone or marker or niche cover, all at no cost to the family. Veterans are also eligible for a burial flag and may be eligible for a Presidential Memorial Certificate.  It’s important to know if your loved one is eligible for this before making alternate arrangements for a private funeral that may otherwise not be needed.

It certainly can be emotionally difficult to tackle the task of making pre-arrangements. However,  pre-planning and pre-funding a funeral will be helpful to the surviving family members who will be struggling with their grief.  In fact, if a person requires nursing home care and will be applying for Medicaid, they can fully pre-fund an irrevocable funeral trust, and the value of that trust will be an exempt asset that won’t preclude eligibility. So whether one seeks to have a VA burial, or one privately paid, these arrangements should be fully explored and planned in advance whenever possible.

Call us about estate planning for veterans and non-veterans alike … 732-382-6070

More reasons to consult with a lawyer when filing for Medicaid

The Medicaid program pays for nursing home care for financially eligible people. The program is administered by the State Division of Medical Assistance and Health Care Services (DMAHS), which delegates the application processing to the employees of the county Boards of Social Services (sometimes called county welfare boards). All of these people are government employees. They receive and process applications by relying on the NJ State Medicaid Manual — which is the state’s regulations, that are in turn based on federal law — and innumerable directives received informally through the policy process behind the scenes. Then there are the administrative procedures which are locally created. There are 23 counties in New Jersey and the procedures that are used in Middlesex County, for instance, may be quite different than those used in Passaic or Burlington.

What this means for an applicant is that if they call a friend who applied in a different county, they could be getting an incorrect picture of what to expect in their own county.

Another big issue is that  there is a general legal principle by which New Jersey government employees may not// do not provide “advisory opinions” to applicants as to how the law applies to their given case. I represented state agencies back in the 80’s and early 90’s and we would get calls from people asking questions like “I want to do such-and-such. Do your regulations allow that?” and we’d have to politely demur and suggest that they call their own lawyer to interpret the law for them.

Why is this problematic for Medicaid applicants? The State Medicaid Manual at N.J.A.C. 10:71-2.2(c) gives the local agency the responsibility to “1. inform the applicants about the purpose and eligibility requirements for Medicaid” and  “…3. Assist the applicant in exploring their eligibility for assistance.”  So a person files an application, has no idea whether they are eligible, receives vague information and no specific guidance other than “bring in five years of financial records and all these other verifications,” and then sits and waits months and months without receiving any “assistance” from the agency. Sometimes, a denial notice is issued a year or more after the initial application was filed, and that’s when the applicant discovers that they still have “excess resources,” are not eligible, and have a giant debt to the facility.

This is particularly problematic for married couples, because the community spouse is entitled to retain a protected share of assets (called the CSRA), and there is thus a specific “target” for the spend-down in every single case, which can be easily calculated by adding together the value of all the non-excluded assets as of the date the ill spouse entered the facility, dividing by 2, and comparing that number to the maximum limit of the program. So  if the caseworker doesn’t do the “resource assessment” and calculate the protected community spouse resource allowance for the applicant early in the process, the applicant will never know just what the “target end point” is for the spend-down. Nursing homes cost more than $10,000 every month. If that couple doesn’t “spend down” to below the target, the hapless community spouse will be personally liable for the nursing home bill for every month until they hit the target.

I encountered an egregious example of this problem recently. Believe me, this is not the first time I’ve seen this happen. Wife entered facility in the fall of 2013. Husband went to the Medicaid office in early 2014. Husband needed to “spend-down” to $119,000 and wife could keep $2,000, but he didn’t know that at the time. Caseworker gave him a list of required documents to provide to her. Shortly after the initial intake, caseworker sent an appropriate letter asking for the documents needed to do the “resource assessment” which is what I’m talking about here — to determine his spend-down target. Applicant provided those records and never received any information after that. No calls, no calculations, no letters, no replies to phone calls; nothing. He eventually calls the agency and is told “just spend down” “Well how much do I have to spend?” he asks and the answer is “you have to spend down. Have a nice day. Goodbye.” Long story short, he spent over $100,000 on the nursing home in the first year, went back to Medicaid a year later and filed the application, got no assistance from the agency and only got requests for documents on repeated occasions, and never knew that he still had a little too much left in the resources because no one gave him any “assistance.” He received a Denial notice recently, saying that he had $24,000 of “excess resources” and therefore wasn’t eligible!! He is now in arrears to the facility for a full year of his wife’s care.

There are many federal rules that are designed to PROTECT the assets of an applicant and their spouse, and it’s just not true that you have to “just keep spending down.” But applicants won’t get that advice from the agency charged with “assisting” them, and non-attorneys aren’t necessarily familiar with the intricacies of federal and state law that can be used to protect Medicaid applicants and their families. Call an elder law attorney – you don’t have to do this on your own.

Call us for an appointment to discuss Medicaid eligibility, filing an application, or pursuing an appeal … 732-382-6070

US District Court orders Ohio to begin paying retroactive Medicaid payments for Assisted Living

Just out — summary judgment was granted to the plaintiffs in an Ohio Medicaid case in Federal District Court for the Southern District of Ohio called Kathryn A. Price et al. vs Medicaid Director et al.. The plaintiffs were represented by counsel through the nonprofit organization Justice in Aging  Inc. Here’s the decision.

At issue was the rewuirements of 42 USC 1396a(a)(34).

Through a detailed analysis of the governing federal statute, the Court found that the federal law requires the retroactive payment of unpaid assisted living bills for three months preceding the date of eligibility. The court held that the Ohio’s regulation therefore violated the controlling federal statute, and that Ohio needed to bring its practices into compliance with deferral law: ” Ohio’s rules setting the effective date of assisted living waiver eligibility as beginning only after an application is filed and after the State approves a service plan, assesses financial qualifications (as in Mrs. Hilleger’s case), or determines the level of care qualifications thwart Congress’s intent as expressed in § 1396a(a)(34). These rules permit the State to evade the retroactivity requirement by simply selecting a definition of “eligibility” that relies on a post-application event. Defendants’ interpretation effectively eviscerates the “(or upon application would have been)” provision of § 1396a(a)(34), which contemplates a retrospective view of an individual’s circumstances had that person actually applied for Medicaid when he or she received the care or services.”

The Court further said, ” As explained above, the clear language of the statute requires States to provide retroactive Medicaid benefits to eligible individuals applying for assisted living waiver benefits.Congress did not waive § 1396a(a)(34) retroactivity for home and community-based services waivers under § 1396n(c).” The decision paves the way to review other state’s practices to see if they are out of compliance as well.


Call us to prepare and file your Medicaid applications for Assisted Living, nursing homes and home care, and for asset protection plans, and appeals of Medicaid denials … 732-382-6070