DRA Regulations Postponed

Written By: Attorney Jeffrey A. Marshall, CELA*

On February 8, 2006, President Bush signed the Deficit Reduction Act of 2005 (the DRA) into law. The DRA made wide ranging and complex changes to the eligibility requirements for applicants and recipients of Medicaid-financed long term care.  Included were changes in the treatment of transfers of assets for less than fair consideration, annuities, and spousal protections.  Pennsylvania is required to operate our Medical Assistance program in conformity with these DRA rules. 

On March 3, 2007, the Pennsylvania Department of Public Welfare (DPW) published temporary “statements of policy” to comply with the DRA's changes. DPW also distributed "Operations Memoranda" that detail the related procedures to be followed by County Assistance Offices in making eligibility determinations. These Operations Memoranda cover the following subjects:

·          Transfers of Assets for Less Than Fair Market Value

·          Annuities

·          Changes to Policy Regarding Promissory Notes, Loans and Mortgages

·          Changes to Policy Regarding the Purchase of a Life Estate in another Individual's Home

·          Disqualification for Payment of Long Term Care Services for Individuals with Substantial Home Equity

·          Changes to Spousal Impoverishment Policy and Procedures Related to Medicaid/Long Term Care

·          Undue Hardship Waiver Provisions

The Operations Memoranda are available on the Marshall, Parker & Associates’ website at http://www.paelderlaw.com/Draft_memos.html.

Since March 5, 2007, County Assistance Offices have been relying on these informal Operations Memoranda.  In the meantime, DPW has been working on permanent regulations. Formal regulations are required under the Commonwealth Documents Law (45 P.S. 1102).  The regulation process provides an important opportunity for public comment and oversight by the Legislature.  Once issued, the regulations will replace the Operations Memoranda.

Until recently, elder law attorneys expected that proposed regulations would be published before the end of this summer.  However, it now appears that publication will be delayed perhaps until April 2009.  The reasons for the delay are unclear. 

In addition to proposed permanent DRA related regulations, DPW intends to update the regulations covering Medical Assistance Estate Recovery.  Estate Recovery is a federally mandated program which requires Pennsylvania to seek to recover Medical Assistance payments made after the death of some benefit recipients. The updated regulations will incorporate changes to the estate recovery program that have occurred over the past few years.  The changes should cover the Long Term Care Partnership program, the Department's priority of claim, undue hardship waivers, postponement of collection, and computation of the claim. Information on the estate recovery program is available at http://www.paelderlaw.com/medicaiddeathtax.html.

Attorney Marshall can be contacted at webmail@paelderlaw.com or at 1-800-401-4552

New Medicare Act Expands Benefits

 

Written By: Attorney Jeffrey A. Marshall, CELA*

On July 15, 2008, Congress overrode a veto by President Bush to pass the “Medicare Improvement for Patient and Providers Act” (Public Law No: 110-275, July 15, 2008).  The law blocked a scheduled 10.6% cut in Medicare payments to doctors.  Instead Medicare will reduce the over-payments the government has been making to private Medicare plans. The new law also adds benefits and lowers some co-payments for Medicare recipients.   

In his veto message, the President said he objected to the bill because cutting federal payments to Medicare Advantage plans would slow the growth of those plans which are offered by insurance companies as an alternative to traditional Medicare. According to the New York Times, many independent studies have found that the private plans, sold by insurers like Humana and UnitedHealth, cost the government much more per person than traditional Medicare.

In addition, starting in 2011, private fee-for-service plans will have to bring doctors who accept the plans into a network, similar to the way that health maintenance organizations (HMOs) and preferred provider organizations (PPOs) now operate. The bill also sets strict standards for the marketing of private plans to curtail high-pressure sales tactics that have prompted complaints from beneficiaries and state insurance regulators. 

The Medicare Improvement Act may represent a reversal of the ideologically motivated and costly move towards the privatization of Medicare. 

Under the new law, older and disabled Americans who participate in Medicare will eventually see their co-payment for mental health services reduced from 50% to 20%. Some widely used drugs that Medicare previously didn't pay for will also be covered. One class is benzodiazepines, a group of drugs including Xanax and Valium which are often prescribed for anxiety. The other drug class is barbiturates, which are used as sleep aids. In addition, the law makes it easier and cheaper for new Medicare participants to get a physical checkup. Most of these new benefits will be phased in over several years.

The Act encourages more doctors to write electronic prescriptions.  Currently, only about 40,000 U.S. doctors prepare their prescriptions digitally, according to the Wall Street Journal.  This is a tiny fraction of the over 600,000 physicians in the United States and its territories who report patient care as their major professional activity. The law initially boosts Medicare payments to physicians who make the change. Eventually payments will be lowered to doctors who fail to adopt the technology.

In addition, the new law delays a competitive bidding program for suppliers of medical equipment like oxygen tanks and power wheelchairs. The new law and related information is available online at http://www.govtrack.us/congress/bill.xpd?bill=h110-6331.

Attorney Marshall can be contacted at webmail@paelderlaw.com or at 1-800-401-4552

Professor Pearson to Co-Author Elder Law in Pennsylvania

Written By: Melissa Bottorf

Jeffrey Marshall and PBI Press have announced that Katherine Pearson, Professor of Law at Pennsylvania State University’s Dickinson School of Law, will co-author future editions of Elder Law in Pennsylvania.

Professor Pearson is the 2008-09 Chair-Elect for the Pennsylvania Bar Association's Elder Law Section. Recognized throughout the legal community for her expertise on legal issues facing older citizens, Professor Pearson has been selected to speak before the National Academy of Elder Law Attorneys, the National Council on Family Relations, at the National Aging and the Law Conference in Washington, D.C., and at conferences on elder law studies and gerontology hosted by the Canadian Centre for Elder Law at the University of British Columbia and Oregon State University. 

At Dickinson, Professor Pearson has created an elder law curriculum including an elder law seminar, a workshop in legal problems of the elderly, and an Elder Law and Consumer Protection Clinic.  She has written numerous articles on law and aging.  Links to some of her articles are available at http://www.dsl.psu.edu/faculty/pearsonarts.cfm.

Elder Law in Pennsylvania is a comprehensive guide to many of the significant legal issues affecting seniors. It simplifies complex programs like Medicaid, Medicare, Social Security, and Veterans’ benefits, guiding the reader through both federal law and the unique aspects of Pennsylvania elder law. 

The 1^st edition of Elder Law in Pennsylvania, authored by Attorney Marshall and published in 2005 by PBI Press, received the 2006 award for Outstanding Achievement in Publications from the Association for Continuing Legal Education, an international association of legal education professionals.  The 2^nd edition became available in 2007.  Professor Pearson has already provided a supplement on “Filial Support Obligations in Pennsylvania: Adult Children, Parents and Spouses” for that edition.

The third edition of the book, to be co-authored by Attorney Marshall and Professor Pearson is scheduled for publication in fall 2009.  As a result of Professor Pearson’s involvement, the book will be expanded to include new chapters on assessing housing options and Pennsylvania's filial and spousal support laws.

More information on Elder Law in Pennsylvania is available online at http://www.paelderlaw.com/pdf/book_flier.pdf or from PBI at www.pbi.org.  More information on Professor Pearson is available at http://www.dsl.psu.edu/faculty/pearson.cfm. 

Melissa can be contacted at webmail@paelderlaw.com or at 1-800-401-4552

 What to do If Your Power of Attorney Isn’t Accepted

Written By: Attorney Jeffrey A. Marshall, CELA*

Even a perfectly prepared and executed power of attorney can be rejected or called into question by a third party. Banks, brokerage firms, insurance companies, and other institutions often de­mand proof of validity for powers of attorney. One common complaint is that the power of attor­ney is ^“stale^” - it was executed too far in the past. The issue of “staleness^” is effectively refuted by Pennsylvania law - section 5604(b) of the Probate, Estates and Fiduciaries (PEF) Code which states that POAs do not become stale. Some third parties will not honor a power of attorney without a ^“Medallion guarantee^” through a participating bank. Others may demand that certain internal require­ments of the third party be met.

Where Government Benefits are NOT involved:

Various sections of Pennsylvania’s PEF Code provide the agent with effective tools to limit the potential for rejection of a power of attorney by non-governmental entities.  Section 5604 authorizes the agent to execute an affidavit that serves as conclusive proof of the non-revocation and non-termination of the power. A third party acting in good faith reliance on this affidavit is protected from liability under the terms of Section 5608. Section 5608(b) protects the third party even in the absence of an affidavit by the agent.

Section 5605 provides that the death of the principal does not revoke or terminate the agency as to the agent or third parties who act in good faith without actual notice of the death.

To further facilitate the acceptance of powers of attorney, Section 5608(a) places an affirmative duty on third parties to comply with the instructions of the agent. Third parties who fail to com­ply with the instructions of the agent without reasonable cause are subject to civil liability for any damages resulting from the noncompliance. Thus the third party is at a much greater risk for failing to accept the agent^’s authority than for accepting it. The law reads as follows:

5608. Liability.

(a)  Third party liability. Any person who is given instructions by an agent in accor­dance with the terms of a power of attorney shall comply with the instructions. Any person who without reasonable cause fails to comply with those instructions shall be subject to civil liability for any damages resulting from noncompliance. Reasonable cause under this subsection shall include, but not be limited to, a good faith report having been made by the third party to the local protective services agency regarding abuse, neglect, exploi­tation or abandonment pursuant to section 302 of the act of November 6, 1987 (P.L. 381, No. 79), known as the Older Adults Protective Services Act.

(b)  Third party immunity. Any person who acts in good faith reliance on a power of at­torney shall incur no liability as a result of acting in accordance with the instructions of the agent.

As a result of these statutory provisions, third parties are effectively exonerated from liability for following the instructions of the agent, but are at risk if they disregard them. A letter from a lawyer pointing out these statutory requirements, especially when combined with an affidavit, is usually sufficient to convince third parties to follow the directions of the agent.

Occasionally an institution will demand a Medallion guarantee. The Securities and Exchange Commission describes a Medallion guarantee as a type of signature guarantee that most trans­fer agents will require before they process the transfer or sale of any securities you hold in your own name (i.e., in certificate form as opposed to your broker holding them for you in street name). You can get a Medallion guarantee from any commercial bank, savings bank, credit union, or broker-dealer that participates in one of the Medallion signature guarantee pro­grams. While it can be argued that requiring a Medallion is inconsistent with Pennsylvania law, the easiest solution when this situation is encountered is to obtain the Medallion guarantee.

Where Government Benefits ARE involved:

Most people who receive federal benefits are able to manage their own financial affairs. However, some beneficiaries are unable to manage their benefits because of physical and mental problems. When this happens, the federal agency issuing the benefit check may appoint a repre­sentative payee to manage the benefit amount. The following government agencies administer these programs:

A.        Social Security Administration (SSA);

B.        Office of Personnel Management (OPM); and

C.        Railroad Retirement Board (RRB).

These agencies may refuse to recognize the authority of an agent acting pursuant to a power of attorney. Instead, each agency has its own rules for determining whether a payee is needed and who the appropri­ate person or program will be. One way some people use to circumvent these requirements is to have the government check direct deposited into a bank account that can be controlled by the agent.

Attorney Marshall can be contacted at webmail@paelderlaw.com or at 1-800-401-4552

Attorney Marshall Presents at NEPA End-of-Life Coalition Conference in Williamsport

Written By: Melissa Bottorf

The NEPA End of Life Coalition is hosting its 2008 Educational Conference on Friday, October 3^rd at the Holiday Inn in Williamsport. This full-day conference entitled, “Improving End-of-Life Experiences for Pennsylvanians,” will provide continuing education credits for Nursing Home and Personal Care Home Administrators, Social Workers, Nurses and Attorneys.

Attorney Marshall’s discussion will focus on the new advance care legislation that took effect in Pennsylvania after Act 169 became law in 2006.  He will discuss how those changes impact providers and what individuals can do to improve end of life care in their own families, facilities and communities.

Other speakers for the day include Ivonne Gutierrez Bucher, Chief of Staff, PA Department of Aging, Dr. Margie Eckroth-Bucher who will discuss Caregivers & Stress and Dr. Charles Zola who will discuss an Ethics Perspective of End of Life Care.

To register or for more information, please contact the Alzheimer’s Association at 570-822-9915. Brochures for the event are also available by contacting Marshall, Parker & Associates at 321-9008.

Melissa can be contacted at webmail@paelderlaw.com or at 1-800-401-4552