Warning!! Watch out for Medicaid Traps when setting up an Irrevocable Prepaid Funeral Contract

When “spending down” excess resources in connection with an application for Medicaid benefits under the MLTSS program, the individual frequently purchases an irrevocable, prepaid funeral contract, because such a contract is treated as an “excluded resource” under the rules of the program. These contracts are set up by the funeral home, and the individual looks through a menu of items and selects their choices for the pre-arrangements. Once the contract is paid for, the individual cannot revoke it and cannot get back the money. Typically, a funeral arrangement will include a casket, preparation and transportation of the body, hearse, limousine, pallbearers, use of funeral home’s chapel space for visitation or service, and whatever is needed for a memorial service such as clergy, music, flowers, guest sign-in book, prayer cards, and sometimes a religious icon that is placed on the casket.

Medicaid applications are filed after the individual’s non-excluded resources (assets) are below the limits set by the MLTSS program. The application is processed by the County Board of Social Services. This summer, our clients have received notices from certain County Boards that various prepaid items in the irrevocable contract are still being counted as resources because they are “for the living” and not “for the funeral for the deceased.” Needless to say, this has come as a shock and in some cases results in the County Board rejecting the application due to “excess resources”  in spite of the fact that the applicant has no access to the money paid for those items.

Believe it or not, we have seen cases in which the County is trying to disallow an exclusion for the payment made for pallbearers ($50 each), clergy ($500), cost of the room for the viewing ($800), and the memorial package that includes guestbook ($30), prayer cards ($45). The Counties are relying on the instruction written in the New Jersey  State Med-Com No. 18-08, since the State’s regulation [N.J.A.C. 10:71-4.4.(b) 9 ] is not explicit as to what would be disallowed. Med-Com 18-08 Funeral Trusts

If the available resources of the applicant (and spouse, if any) are very close to the resource limit, counting the few bucks that are no longer accessible because they are part of the irrevocable funeral contract can be disastrous — the county would deny the application due to “excess resources,” leaving the applicant (and spouse) potentially liable for nursing home bills that run over $10,000 per month until the resources are below the limits and a new application can be filed. In my opinion, though, what should happen, at most, is the imposition of a transfer-of-assets penalty (see N.J.A.C. 10:71-4.10) because money has been placed into an irrevocable trust that cannot pay out benefits during the lifetime of the applicant (see N.J.A.C. 10:71-4.11).That penalty period would run from the time of the application, assuming all other criteria have been met.

I say this because the State’s definition of a “resource” is that it is an asset that “could be converted to cash” and is “available” to the individual. See N.J.A.C. 10:71-4.1(b) and (c). Clearly, the assets held in the irrevocable funeral trust are not “available” at all during the lifetime of the individual. Therefore, they cannot and should not be counted as “resources.”

Review these issues carefully when setting up the prepaid funeral trust. Certain expenses might have to be paid separately by a third party such as a family  member, and not included as part of what the irrevocable contract covers, or should be expressly delineated as having been paid for separately by someone else.

 

Call us for legal advice and representation on  Medicaid spend-downs, applications and appeals ……….. 732-382-6070

 

The Governor has a Medicaid system improvement bill on his desk

If you or any of your colleagues, friends, or family members are in support of improving the system for Medicaid eligibility determinations, you should call the Governor’s Office  of new jersey’s Governor Murphy at 609.292.6000 and request that the Governor sign A4569/S499 into law. pass on this information to people you know who are interested in this issue.

According to BillTrack50, in its Bill Summary, This bill “requires the Commissioner of Human Services to develop an information technology platform for the intake, processing, and tracking of applications for benefits under the Medicaid and NJ FamilyCare programs.” Among other things, “The goals of the system will be: to simplify the applications and eligibility determination processes for both applicants and eligibility determination staff; to standardize application of eligibility policy across the various agencies responsible for eligibility determination; to allow for real-time tracking of the status of applications.”

At our Firm, we prepare and file Medicaid applications for the MLTSS long-term care Medicaid programs in nursing homes, assisted living and community care settings. It’s an incredibly complex process, since five years of transaction records are required, substantial evidence can be required for certain things, it can be challenging to explain transactions that occurred several years prior, and there seem to be many unwritten procedures and policies which vary a bit county by county. There are many legal pitfalls that can occur for an individual client that need particularized attention. Applications are regularly turned down due to insufficient evidence or failure to submit everything that is required. Applicants with alzheimers and other cognitive deterioration may not be able to recall or retrieve the necessary information.

Simplifying the application process would be great. This bill is a step ahead for monitoring and uniformity.

  • Implementation of the bill would bring accountability and uniformity to the Medicaid application system, in-line with the Governor’s goal to create a Fairer NJ. You can’t drive improvement to this process, if you can’t monitor.
  • Federal Government will pay 90% of IT development work and 75% for operations.
  • Bill has unanimous support in both houses
  • Bill is based on the report by the NJHCQI (Health Care Quality Institute), “Medicaid 2.0: Blueprint for the Future” with additional input/amendments/improvements by NJ NAELA (the New Jersey chapter of the National Academy of Elder Law Attorneys)
  • If you have personal or professional experience which reinforces the need for the implementation of this bill, you should feel free to share it with the Governor’s office.

Call us for legal advice on how to achieve Medicaid eligibility for someone who needs long-term care ……….. 732-382-6070

Medical Aid-in-Dying Act signed by Governor Murphy

On April 12th, New Jersey joined seven other States which have enacted laws authorizing a terminally patient to self-ingest a drug that would end their life. Oregon was the first State to allow this, in 1997. The New Jersey bill was A1504/S1072. It will go into effect on August 1, 2018. Over two dozen other States are actively considering such legislation.

The Act specifies criteria for who is eligible to take advantage of its protections: The individual must be an adult over 18 and able to self-ingest the medication. They must have a terminal diagnosis with a prognosis of six months of less, and they must be determined to have full mental capacity. The Act allows such an individual to make and carry out an “informed decision” to ingest a fatal drug. Informed decision is defined as:

   “a decision by a qualified terminally ill patient to request and obtain a prescription for medication that the patient may choose to self-administer to end the patient’s life in a humane and dignified manner, which is based on an appreciation of the relevant facts and after being fully informed by the attending physician of:

(1)   the patient’s medical diagnosis;

(2)   the patient’s prognosis;

(3)   the potential risks associated with taking the medication to be prescribed;

(4)   the probable result of taking the medication to be prescribed; and

(5)   the feasible alternatives to taking the medication, including, but not limited to, concurrent or additional treatment opportunities, palliative care, comfort care, hospice care, and pain control.

 

There are many steps in the procedure protocol. First, the individual must originate the request by making two spoken (oral) requests to the physician, with a 15 day waiting period in between; the doctor must bring in a consulting specialist to confirm capacity; the doctors may refer the individual for psychological or psychiatrist for further capacity evaluation if capacity is not clear; the doctor must offer the patient the option to rescind his or her request. The individual also must complete a specific form and submit it to their doctor; the form will be titled “REQUEST FOR MEDICATION TO END MY LIFE IN A HUMANE AND DIGNIFIED MANNER.”

The written request must be witnessed in a manner similar to other legal documents, in which two witnesses attest to the individual’s capacity (competence) and willful voluntary act. One of the witnesses must be “disinterested” — not standing to benefit in any way from this death. The physician must also refer the individual to an appropriate health care professional for a discussion about other treatments or palliative care at the end of life. Ultimately, the doctor can then prescribe the medication.

The law contains requirements related to patient record-keeping so that every step of the process is well documented. Persons who participate in good faith with the process, or to decline to participate, are given immunity against criminal and civil liability, and are protected against professional disciplinary action related to their licenses. There are also protections that prevent life insurance and other contracts from restricting an individual’s rights under the Act, and each step of the way must be carried out by the individual and not by a proxy.  For example, neither a legal guardian, agent under power of attorney, or health care representative could act in the place of the individual.

For individuals facing harrowing end of life decisions, the new Act will provide important and welcome relief from suffering. A plan can be put in place to assure that the transition for the individuals, and the safety and security of those left behind, can be as peaceful as possible.

Talk to us about life care planning and elder care planning… 732-382-6070

Hearing Monday in Trenton on Social Isolation and Age-Friendly communities

New Jersey is working on efforts to encourage municipalities to become “age-friendly communities.” Age Friendly is spreading across the country, with interesting initiatives in many places. Take a look at South Orange-Maplewood, Chatham, and Elizabeth for starters. Looking for volunteer opportunities? Contact your Mayor — you may be able to get involved with those initiatives or help to jump-start a new process. Age-friendly is an approach to community development that looks at the impact on seniors of a community’s physical space, transportation, recreation opportunities, public building access, access to municipal government and services, housing, etc. etc. and what might be done to improve those systems to make it more feasible for people to “age in place.”

Two new bills will be introduced to the NJ legislature which addressing key issues concerning older adults.  Click here to read the text

https://www.njleg.state.nj.us/2018/Bills/AR/246_I1.PDF

 https://www.njleg.state.nj.us/2018/Bills/A9999/5314_I1.PDF

 A-246 is a Resolution co-sponsored by Assemblyman Herb Conway and Assemblyman Wayne DeAngelo that urges New Jersey counties and municipalities to take the steps necessary to be accepted into the AARP network of age-friendly communities as defined by the World health organization.

A-5314 requires the Commissioner of the Human Senior Services “within 180 days and biennially thereafter” to assess and report to the Legislature on the state of social isolation in New Jersey as if affects individuals who are over 65, have disabilities, are suffering with mental illness, or are otherwise vulnerable. The bill marks a recognition that extreme social isolation is a problem in the State which adversely affects many citizens and might be alleviated if better understood and tackled. The report must also include recommendations for strategies to counter this problem. 

The Committee hearing will take place Monday morning May 19th at 10 am in the Committee Room 11, 4th Floor, State House Annex, Trenton.

If these issues are of interest to you, contact your Legislators, and read more here.

 

Planning for a good old age involves looking at a wide array of issues, and each person’s situation is unique. Call us for individualized elder care legal planning …. 732-382-6070