May 29

State Can Recover Non-Medical Expenses From Medicaid Recipient’s Estate

Herman Vollmann received Medicaid benefits while he resided at two different nursing homes. After he died, the state filed a claim against his estate for $22,978.35 to recoup Medicaid benefits paid on his behalf. The amount was based on the per diem rate calculated under the state’s Medicaid plan.

Mr. Vollmann’s estate disallowed the claim, and the state petitioned the court. Both parties asked for summary judgment. The estate argued that the state was entitled to recover only medical expenses, which totaled $360.45. The trial court granted summary judgment to the state, and the estate appealed.

The Nebraska Supreme Court affirms, holding that the state can recover nursing home services that include non-medical expenses. According to the court, “‘medical assistance’ provided to a Medicaid recipient includes costs for his room and board and other ‘nonmedical’ expenses at nursing facilities.”

To read an article from the Omaha World Herald about the case, click here

For the full text of this decision, click here.

May 26

U.S. Supreme Court Rules That an Agent Under a POA Does Not Need Specific Authorization to Sign Arbitration Agreement

Beverly Wellner was an agent under a power of attorney for her husband, and Janis Clark held a power of attorney for her mother. The Wellner power of attorney gave Ms. Wellner the authority to institute legal proceedings and enter into contracts in relation to real and personal property. The Clark power of attorney authorized Ms. Clark to sign contracts on her mother’s behalf. Ms. Wellner’s husband and Ms. Clark’s mother entered the same nursing home, and Ms. Wellner and Ms. Clark signed arbitration agreements on their behalves.

After Ms. Wellner’s husband and Ms. Clark’s mother died in the nursing home, both estates brought suits against the nursing home for negligence. The nursing home moved to dismiss the cases, arguing that the arbitration agreements prohibited the estates from suing in court. A Kentucky trial court and court of appeals allowed the suits to continue. The Kentucky Supreme Court consolidated the cases and ruled that a power of attorney could not authorize a representative to enter into an arbitration agreement without specificallysaying so in the document. The nursing home appealed to the U.S. Supreme Court.

In a 7-1 ruling, the U.S. Supreme Court reverses, holding that the rule the Kentucky Supreme Court enunciated requiring a power of attorney to include a clear statement allowing the authorization of arbitration agreements violates the Federal Arbitration Act because it does not “put arbitration agreements on an equal plane with other contracts.” Delivering the opinion for the majority, Justice Kagan wrote, “by requiring an explicit statement before an agent can relinquish her principal’s right to go to court and receive a jury trial, the court did exactly what this Court has barred: adopt a legal rule hinging on the primary characteristic of an arbitration agreement.”

For the full text of this decision, go to:

May 24

Maryland Repeals Filial Responsibility Law

Maryland’s filial responsibility law provided that adult children are obligated to financially support a destitute parent with food, care, shelter, and clothing. The law was not used much in nursing home cases because Maryland law prohibits a nursing home from holding adult children responsible for a parent’s nursing home bill unless the child consents in writing to be financially responsible. However, the law could have been used when a parent under age 65 was under the care of a psychiatric hospital.

The repeal was a bipartisan effort. The arguments for repealing the law were that filial responsibility laws were a holdover from Elizabethan times, and that a parent’s failure to exercise sound financial discretion should not burden the parent’s adult children. To read the full repeal, go here:

May 22

Reservation of Power of Appointment in Deed Does Not Conflict With Conveyance of Property to Children

Margaret Hession sought legal assistance to protect her house in the event she might need Medicaid benefits. As part of the Medicaid planning, she executed a deed transferring her house to her children. The deed reserved a life estate for her and granted her a special power of appointment that allowed her to appoint the property to any person except herself, her creditors, her estate, or her estate’s creditors. Ms. Hession decided her daughter Deaven Skye should inherit less than her other children. She wrote a will that exercised her power of appointment and reduced Ms. Skye’s interest in the property from one-third to 5 percent.

After Ms. Hession died, Ms. Skye objected to the will and argued that the power of appointment was void. The trial court dismissed Ms. Skye’s objection and admitted the will to probate. Ms. Skye appealed, arguing that the provisions in the deed granting the remainder interests and reserving a power of appointment are irreconcilably repugnant to each other.

The Massachusetts Court of Appeals, rules that the reservation of the power of appointment is consistent with the other provisions of the deed. According to the court, “because of the reservation of the life estate, the deed conveyed not present possessory estates but rather remainder interests; and, because of the reservation of the power, the remainder interests were defined, in part, by this limitation.” The court specifically does not express a “view on the effect of the reserved power of appointment on [Ms. Hession’s] strategy of avoiding MassHealth look-back period regulations.”

For the full text of this decision, click here.

May 19

Medicaid Recipient Who Transferred Assets to Wife During Period of Ineligibility Is Subject to Penalty Period

Martin Fagan was injured in a motorcycle crash and entered a nursing home. In 2012, he began receiving Medicaid benefits. In 2015, he received a $2 million personal injury settlement, and the state discontinued his Medicaid benefits. Mr. Fagan transferred $879,453.32 of the settlement proceeds to his wife in two chunks. When Mr. Fagan reapplied for Medicaid, the state determined that he transferred assets for less than market value and imposed a transfer penalty.

Mr. Fagan appealed, arguing that because the transfers to his wife were pre-eligibility transfers, he could transfer an unlimited amount to her without incurring a penalty. The state upheld the penalty period, and Mr. Fagan sued for injunctive relief in federal court. The state and Mr. Fagan filed motions for summary judgment.

The U.S. District Court, District of Connecticut, grants summary judgment to the state, holding that the penalty period is appropriate. The court rules that any transfer to a community spouse made after the institutionalized spouse is Medicaid eligible is prohibited if it happens during the same period of institutionalization. According to the court, there is no reason why statutory language “should be interpreted to give an institutionalized individual, found ineligible for benefits upon redetermination, a second opportunity to make transfers to his spouse prohibited at the time of his initial eligibility determination when the coverage relates to the same period of institutionalization.” 

For the full text of this opinion, click here.