Mon, 25 May 2009
Medical science has made great strides in the last 30 years. We are certainly living longer. Illnesses and injuries that in the past resulted in death, now do not. However, the recovery period can be a long one, especially for the elderly, whose recuperative abilities are not the same as younger patients. As a result, patients remain hospitalized longer and bounce back and forth between nursing home and hospital, in so many cases.
That’s where the long-term acute care hospital or LTACH, comes in. General hospitals are typically paid a standard fee for a diagnosis so they earn more for a quicker patient discharge. At the same time, the patient may not quite be ready for a subacute facility in a nursing home, which focuses primarily on rehabilitation but can’t provide the medical care of a hospital. The LTACH can bridge that gap. Patients receive the benefit of physicians on duty around the clock as well as nurses, respiratory therapists, case managers, physical and occupational therapists, dieticians and pharmacists, all on staff. LTACHs provide more nursing care than on a medical-surgical floor of a hospital but less than is provided in an intensive care unit.
Many LTACH patients use ventilators to breath and are recovering from multiple medical conditions such as heart failure, major surgery, etc. They may have developed complications such as bed sores. The specialty hospital can concentrate on weaning the patient off of the ventilator or providing wound care, for example, that can require weeks of care, that the general hospital won’t receive payment for. For those on Medicare, LTACHs are covered under Part A. The average stay in an LTACH is 25 days.
There are over 400 LTACHs nationwide and 8 in New Jersey. Most are housed in general hospitals, however, some are freestanding, such as Select Specialty Hospital in Rochelle Park, New Jersey which is owned by the same company that also owns Kessler Institute, the facility that specializes in the treatment of spinal cord injuries. The long term acute care hospital is definitely an option families should explore for their critically ill or catastrophically injured loved one. It may very well improve the recovery process and increase the chance that a loved one can ultimately return home, the end result that we all want to achieve.
Category:Long term care planning -- posted at: 6:00am EST
Mon, 18 May 2009
Last week I wrote about Dad who gifted a large sum to his children and within 6 months needed long term care. Because the money had been spent and could not be returned I had to explain to the daughter that Dad would not be eligible for Medicaid for 4 and ½ years. A complete disaster. But this week let’s take a look at a success story, one in which we were able to work to fix the mistakes that were made, long before long term care and Medicaid were needed.
Two years ago Mary contacted me concerning her mom who was living in an assisted living facility with an aide that she and her sisters were paying cash. Mom had transferred her assets to her 3 daughters. They had begun to spend some of the money on Mom’s care but had also opened and closed accounts, moving, combining and commingling assets. Over time it would have been very difficult to follow the paper trail and establish with Medicaid that Mom’s money had been spent for her care, and not gifted to the children. Unlike last week’s family, however, Mary reached out to me within a few months after the initial transfers and, as it turns out, almost 2 years before we applied for Medicaid.
We quickly counseled Mary that the assets had to be returned, and, thankfully, although some had been spent on Mom’s care, she and her sisters still had possession of the balance. We then guided Mary on the records that she needed to obtain in preparation for the anticipated Medicaid application. While she still employed the aides we were able to prepare invoices and documentation showing that the cash withdrawals were not gifts, but payment for services, including a statement from the facility. Mary had been paying the facility bill on her credit card and then taking money from Mom’s account (which was titled in Mary’s name). We had her go back through her records and copy the credit card bills with those charges and match up payments back to her from “Mom’s account”. We also counseled her on a better way to make those payments.
Finally, Mary and her sisters had moved money from one account to another, for convenience, a better interest rate or to keep FDIC insurance coverage. Without recognizing it, however, they were muddying the paper trail. You see, Medicaid requires as many as 5 years of financial records to show how money has been spent. Mary and her sisters didn’t realize the problems they were creating. We painstakingly had to document all the transfers from one account to another and transfers in and out of each account.
As I said, this was a success story. 2 months ago we applied for Medicaid. We provided Medicaid with details of each transaction, backed by supporting documentation. Last week the family received Medicaid approval without a hitch. Every dollar had been accounted for and we achieved a smooth transition to Medicaid with no ineligibility period. Financially, the family can rest easy that Mom’s care is paid for and the nursing facility, which receives those Medicaid benefits, is happy that their resident went from private pay to Medicaid without interruption of payment. An example of the way things can work if you have someone with knowledge guiding you through the process.
Mon, 11 May 2009
In February, 2006 Congress passed some significant changes to the Medicaid laws that created some very dangerous traps for unprepared families needing long term care. At the time I wrote about a case in which Granddad gifted his money to Granddaughter who moved in to care for him. When she could no longer provide the care and applied for Medicaid she was told, mistakenly, that he was not eligible because of the gifts. It turned out that the Medicaid ineligibility period had expired. We filed for Medicaid on her behalf and the application was approved. A happy ending, but one which I wrote at the time would not end so happily under the new law.
Last week I received a call with an all too common story. Mom had recently died. Dad moved in with Daughter, Jane and the plan was for him to live there the rest of his life. At the same time, Dad gifted $150,000 to Jane and her brother, Joe. "It's Dad's money. He can do what he wants with it", she told me.
Well, I think you can guess what happened. Jane was unprepared for the reality of long term care. I could hear the stress in her voice as she described the deterioration of Dad's mental and physical state, from the mood swings and erratic behavior to the declining personal hygiene and the inability to walk without assistance. His care needs were increasing and Jane was unable to handle the increased demands on her time while caring for her own young children.
"I just never expected this", she exclaimed." I can't do this anymore. I need to get Dad into a nursing home and he has $50,000 left. What do I do?", she pleaded. I explained to her that once his money was spent down he could qualify for Medicaid, but she and Joe would need to return the $150,000. But here was the problem. Jane and Joe had already spent the money and, therefore, couldn't return it. "Well”, I told her, "when Dad's remaining $50,000 is spent down he still won't be Medicaid eligible for another 4 years. That’s because the Medicaid penalty doesn’t start until he has less than $2000 to his name and he needs nursing home care.
"It's so unfair," she cried. "The government is forcing me into poverty to pay for Dad's care." I had to patiently explain to her that she and her brother did receive a substantial sum from Dad, money that should be spent for his own care before public funds could be tapped. The sad truth, however, is that had the family consulted with an elder law attorney before the gifts were made, Dad could have transferred some assets but enough would have been preserved to cover the possibility that he would need long term care before Medicaid eligiblity. Unfortunately, in Jane’s case I didn’t have any solution to her problem. She would have to figure out how to care for her Dad or pay out of her own pocket until the Medicaid ineligibility period expired. It didn’t have to turn out this way. A cautionary tale for all.
Wed, 6 May 2009
The law allows every person to distribute property according to their wishes by a written instrument known as a Last Will. However, many people never execute one and miss that opportunity, the consequences of which can be devastating to loved ones.
In Show 17 of his monthly elder law podcast, Yale Hauptman, a practicing elder law attorney, discusses what can go wrong without a will. Each state has a set of laws that predetermines how assets will pass where there is no will, known as intestacy. That may not, however, be what you want. For example, assets may be left outright to heirs who shouldn’t or can’t handle the money or may end up in the wrong people’s hands.
Yale also discusses the difficult issues involved in second marriages where each spouse has different heirs who they wish to leave their estate. Without proper planning that won’t happen. Ownership of real estate in another state can also present a problem without planning. The bottom line is that without a carefully drawn plan your intentions and desire may not be carried out.
Tune in to learn what you need to do to safeguard yourself and your loved ones.
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Mon, 4 May 2009
Jane’s husband, John, was recently hospitalized and nursing home care was looking more than likely. At that time, their assets totaled approximately $150,000 (not including their home and one car, both of which are “exempt” for Medicaid purposes). Jane went to the Board of Social Services to see what benefits would be available to help her pay for her husband’s nursing home costs. The caseworker explained to Jane that, upon application for Medicaid benefits, the state will total all of the assets she and John own on the day he entered the nursing home (the “snapshot date”). The state will then divide their assets in half (“division of assets”) and Jane is entitled to keep one-half of the couple’s assets, but only up to a maximum of $109,540. John will qualify for Medicaid once his “half” of the assets are spent down below $2000.
Jane and John needed to spend their assets down to $77,000 before qualifying John for benefits. Jane was distraught at the idea of having to spend her life savings … what about her own health care costs? A social worker at the hospital recommended that Jane contact an elder law attorney to see if there were ways they could preserve more of their assets. When we met Jane we explained that there was a way she would be able to increase the amount of assets she is entitled to keep. Here is how.
Jane and John owned their home free and clear, with no mortgage. It was no problem for them to take a home equity line of credit in the amount of $100,000, since their home was worth approximately $400,000. Jane immediately borrowed $70,000 against the line, before John entered the nursing home. By doing so, she increased the amount of assets at the snapshot date from $170,000 to $220,000. This meant that Jane could keep $109,540 and the couple would need to spend the remaining assets down to $2000. In other words, the couple would have to spend $110,460 before John could qualify for nursing home benefits.
After John entered the nursing home we instructed Jane to repay the line of credit leaving another $40,440 to spend down. Paying the nursing home and other bills quickly accomplished that and we were able to get John Medicaid. The end result was that Jane kept nearly $110,000 of their combined $150,000, much needed money considering she was also going to lose some of John’s income and could very well outlive John by 5 years or more.
A word of caution. This scenario is fact specific to Jane and John and should not be considered without proper counseling. The bottom line, however, is that before you start spending down, you should seek advice from someone who knows the Medicaid laws.