June 9

Dangers Lurk Within Health Savings Accounts for Retirees

Health Savings Accounts are surging in popularity — and that can lead to some complications for older workers who enroll in Medicare. Health Savings Accounts (HSAs) are offered to workers enrolled in high-deductible health insurance plans. The accounts are used primarily to meet deductible costs; employers often contribute and workers can make pretax contributions up to $3,350 for individuals, and $6,750 for families; the dollars can be invested and later spent tax-free to meet healthcare expenses. But as more employees work past traditional retirement age, some sticky issues arise for HSA account holders tied to enrollment in Medicare. The key issue: HSAs can only be used alongside qualified high-deductible health insurance plans. The minimum deductible allowed for HSA-qualified accounts this year is $1,300 for individual coverage ($2,600 for family coverage). Medicare is not considered a high-deductible plan, although the Part A deductible this year is $1,288 (for Part B, it is $166). That means that if a worker – or a spouse covered on the employer’s plan – signs up for Medicare coverage, the worker must stop contributing to the HSA, although withdrawals can continue. Failing to do that can lead to a tax penalty.

For the article from the Reuters, click here.

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June 6

Hospice fraud becoming a costly problem for Medicare

No one knows how big the problem of hospice fraud is — all types of improper Medicare payments are estimated at $65 billion for 2010 — but federal investigators prosecuted more than 60 cases in the last year alone, involving hundred of millions of dollars nationwide. The system that was built to help dying patients live out their remaining days with dignity and comfort has few quality metrics to meet, no minimum requirements for how often care is provided, and low barriers to getting into the business. Critics say that can make end-of-life care seem ripe for abuse. “There’s a built-in incentive to get patients in the door,” said Claire Sylvia, a lawyer representing whistleblowers in health care fraud cases at the San Francisco offices of Phillips & Cohen LLP. For example, former Horizons Hospice chief operating officer Mary Ann Stewart, is under indictment in federal court in Pittsburgh on charges of inflating enrollment at her company’s Monroeville facility by recruiting patients who often weren’t really dying. A long-awaited reform in how Medicare pays hospice providers that went into effect in January will do little to curb such abuse, experts say. Medicare began staggering payments to better reflect the cost of care — the first reimbursement change since the benefit began in 1983.

For the article from the Pittsburgh Post-Gazette, click here.

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May 12

Court Must Open Medicaid Recipient’s Estate Before Ruling on Validity of Estate Recovery Claim

A Missouri appeals court reverses a lower court’s decision to deny the state’s Medicaid recovery claim against a Medicaid recipient’s estate because the court was prohibited from ruling on the validity of the claim at the initial hearing to open the estate. Estate of Tiefenbrunn (Mo. Ct. App., No. SD34045, April 6, 2016).

Shirley Tiefenbrunn executed a beneficiary deed that left her house to her daughter and son-in-law. Ms. Tiefenbrunn began receiving Medicaid benefits, and the state filed a lien on the property. After Ms. Tiefenbrunn died, the state filed a release of the lien, stating that Ms. Tiefenbrunn no longer owned the property.

A year after Ms. Tiefenbrunn died, the state filed a petition to open Ms. Tiefenbrunn’s estate and to recover Medicaid benefits paid on her behalf. Ms. Tiefenbrunn’s daughter opposed the petition, arguing that the release of the lien waived the state’s claim. The trial court entered judgment denying the state’s claim. The state appealed.

The Missouri Court of Appeals reverses, holding that the trial court did not have discretion to deny the state’s petition. According to the court, when an interested party timely files a petition to open the estate, the trial court is required to grant the petition and is prohibited from determining the validity of the claim at the initial hearing.

For the full text of this decision, go to: https://www.courts.mo.gov/file.jsp?id=99473

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May 9

State Not Required to Deduct Pre-Eligibility Nursing Home Expenses From Patient Amount

A Florida appeals court rules that the state is not required to deduct all of a Medicaid applicant’s pre-eligibility nursing home expenses from the applicant’s income when calculating the applicant’s monthly contribution to nursing home costs. Goodwin v. Florida Agency for Health Care Administration (Fla. Ct. App., 1st Dist., No. 1D12-4430, April 4, 2016).

After Gabrielle Goodwin injured her spinal cord, she entered a nursing home. She applied for Medicaid through a program that required her to contribute to her cost of care by paying a monthly co-pay that was based on her income. To calculate Ms. Goodwin’s patient responsibility amount (PRA), the state is required to deduct unpaid medical expenses from Ms. Goodwin’s income. The state calculated Ms. Goodwin’s PRA at $1,000.

Ms. Goodwin appealed, arguing that the state should have deducted all of her unpaid, pre-eligibility nursing home expenses — about $70,000 — from her income. The state denied her appeal, ruling that federal regulations require the state to deduct medical care not covered under the state’s Medicaid plan and that Ms. Goodwin’s care was covered. Ms. Goodwin appealed to court, arguing that covered care only included care the state actually paid for.

The Florida District Court of Appeal, First District, affirms, holding that the state is not required to deduct all of Ms. Goodwin’s pre-eligibility nursing home expenses. According to the court, because the state’s “Medicaid program routinely includes and covers the nursing home care that Ms. Goodwin received” before becoming eligible for Medicaid, the state considers them Medicaid-covered expenses.

For the full text of this decision, go to: https://edca.1dca.org/DCADocs/2012/4430/124430_DC05_04042016_094233_i.pdf

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May 5

Lawsuit to Prevent State from Recovering Medicaid Benefits from Spousal Annuity May Proceed

A U.S. district court rules that a case by the family of a Kentucky Medicaid recipient challenging the state’s adherence to federal law regarding spousal annuities rather than to a less restrictive state regulation may proceed against the secretary of Kentucky’s Medicaid agency because the secretary does not have qualified immunity. Singleton v. Commonwealth of Kentucky (U.S. Dist. Ct., E. D. Ky., No. 15-15-GFVT, March 31, 2016).

Claude Singleton entered a nursing home and applied for Medicaid. His wife, Mary, purchased an annuity with herself as annuitant. Ms. Singleton wished to name the state as remainder beneficiary up to the amount of Medicaid paid on her behalf. State regulations provide that the state must be named remainder beneficiary for the amount of Medicaid benefits paid on behalf of the annuitant, and this did not change even after federal Medicaid law was amended in 2006 to require that states be named as a remainder beneficiary for Medicaid benefits paid on behalf of the institutionalized individual.  However, Ms. Singleton’s attorneys – the ElderLawAnswers member firm of McClelland & Associates, PLLC —  informed her that the state Medicaid agency’s branch manager would view structuring the annuity pursuant to the state’s regulation as a transfer for less than market value, so Ms. Singleton changed the state’s remainder beneficiary amount to Medicaid paid on behalf of Mr. Singleton.  

After Ms. Singleton died, her children, the annuity’s secondary beneficiaries, sued the secretary of the state Medicaid agency, along with other parties, arguing that state regulations may be less restrictive than federal law and that the branch manager’s alleged policy of rejecting annuities drafted pursuant to Kentucky’s own statute was improper. The state filed a motion to dismiss, arguing, among other things, that the secretary has immunity.

The United States District Court for the Eastern District of Kentucky denies the motion to dismiss the claim against the secretary in her official capacity. The court holds that because the Ms. Singleton’s children are seeking prospective injunctive relief by seeking to prevent the state from collecting any more than the amount paid by the state on behalf of Ms. Singleton, the secretary is not entitled to immunity.

For the full text of this decision, go to: http://cases.justia.com/federal/district-courts/kentucky/kyedce/3:2015cv00015/77278/39/0.pdf?ts=1459523955

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