Jan Neal Law Firm LLC

Alabama Estate, Elder and Special Needs Law


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Publication on Long-Term Care Planning

Making a long-term care placement is often surprisingly complicated for those who have not previously made a placement. Finding an affordable facility to meet the needs of the person in need of care can be a challenge. Planning is critical to know what to look for and to understand cost of care and payment options for various levels of long-term care.

This e-book will provide information for those persons who will be eventually making a placement, and provide specific information for care in Alabama. It will remain available in Publications at this web site.


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Publication on Advance Directives Available for Download

Power of attorney

At the top of this page you will see a link to our Publications. There you will find an e-book recently published, Guide to Alabama Advance Directives. It can be downloaded and printed or read online. It explains the different ways a person can become an agent for another in Alabama and how to evaluate which document you may need. This e-book will remain available at Publications but is being posted here.


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New VA Pension Benefit Rules To Be Implemented 10/18/18

The Department of Veterans Affairs (VA) has finalized rules that were originally proposed in 2015 that will make it more difficult to qualify for VA pension benefits known as Aid and Attendance and Housebound Benefits. These new rules will change how much an applicant can own and how much an applicant can give away and qualify for benefits by establishing an asset limit, a look-back period, and asset transfer penalties for claimants applying for VA pension benefits that require a showing of financial need.

The VA offers Aid and Attendance as cash payments to low-income veterans (or their spouses) who are in nursing homes or who need help at home with everyday tasks like dressing or bathing.

Currently, to be eligible for Aid and Attendance, a veteran (or the veteran’s surviving spouse) must meet certain income and asset limits. The asset limits aren’t specified, but $80,000 is the amount an applicant is usually allowed to keep. However, unlike with the Medicaid program, there historically have been no penalties if an applicant gives away assets at any time before applying. That is, before now you could transfer assets over $80,000 before applying for benefits, and the transfers would not affect eligibility.

Not so anymore. The new regulations will resemble, to some extent, the existing Medicaid regulations in that the new VA rules set a net worth limit of $123,600, and applicants will be penalized for giving away property within three years of application. This net worth limit of $123,600 will include both the applicant’s countable (non-excluded) assets and his or her income, and net worth will be indexed to inflation in the same way that Social Security increases.

The net worth limit is calculated after first deducting property that will be excluded.  Excluded property includes an applicant’s house (up to a two-acre lot and additional acreage if it is not marketable), and it will not count as an asset even if the applicant is currently living in a nursing home.  Other exclusions from net worth include payment for medical care from their income, including the payments to assisted living facilities.

The regulations also establish a three-year look-back provision. Applicants will have to disclose all financial transactions they were involved in for three years before the application (similar to the Medicaid five year look-back). Applicants who transferred assets to put themselves below the net worth limit within three years of applying for benefits will be subject to a penalty period that can last as long as five years. This penalty is a period of time during which the person who transferred assets will not be eligible for VA benefits. There are exceptions to the penalty period for fraudulent transfers and for transfers to a trust for a child who is unable to provide “self-support.”

Under the new rules, the VA will determine a penalty period in months by dividing the amount transferred that would have put the applicant over the net worth limit by the maximum annual pension rate (MAPR) for a veteran with one dependent in need of aid and attendance. In 2018 that amount is $2169.67.

For example, assume the net worth limit is $123,600 and an applicant has a net worth of $115,000. The applicant transferred $30,000 to a friend during the look-back period. If the applicant had not transferred the $30,000, his net worth would have been $145,000, which exceeds the net worth limit by $21,400. The penalty period will be calculated based on $21,400, the amount the applicant transferred that put his assets over the net worth limit (145,000-123,600).  The transfer subject to penalty would be divided by the 2018 MAPR of $2169.67, resulting in a 9.86 month penalty ($21,400 divided by $2169.67 = 9.86).  The penalty begins to run on the first day of the month following the month of transfer.

The new rules go into effect on October 18, 2018. The VA will disregard asset transfers made before that date.

The new regulations may be read at https://www.federalregister.gov/documents/2018/09/18/2018-19895/net-worth-asset-transfers-and-income-exclusions-for-needs-based-benefits


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New Federal Direction on Home and Community Based Waiver Eligibility

When a person applies for Medicaid to pay for long-term care, either in a nursing home or through the Home and Community Based Waiver (HCBW), Medicaid examines the applicant’s financial transactions for five years preceding the application to determine if any funds were given away or property sold for less than the value assigned by Medicaid.  If so, a penalty is calculated by dividing the value of the amount transferred by $6100 (as of 2018) to determine the number of months of ineligibility.

In nursing home Medicaid cases it was always clear that the penalty started to run when the person resided in a nursing facility and would meet all requirements for Medicaid eligibility but for the existence of the penalty for transferring assets.  In that situation a person is approved for Medicaid subject to the applicable penalty.  He or she is billed privately during the penalty period, often at the peril of relatives who need to come up with funds to pay the bill.  When the number of months of penalty assigned runs out, Medicaid will then pay for the resident’s care.

It has not been so clear about how to get the penalty running in HCBW cases.  If the penalty cannot run until the person receives HCBW services, but the person cannot receive HCBW because of the transfer of assets, then you can never get past the penalty period.  When the application is not taken upon identifying asset transfers, the penalty becomes permanent ineligibility for HCBW services.

On April 17, 2018, the Center for Medicare and Medicaid Services provided revised guidance on how to establish the start date for transfer penalties for HCBW applicants. In that directive CMS indicates that the penalty would begin to run at the point at which a state has: determined that the applicant meets the financial and non-financial requirements for Medicaid eligibility and the level-of-care criteria for the waiver; developed for the individual a person-centered service plan; and identified an available waiver slot for the individual’s placement. The penalty period for that applicant begins no later than the date on which a state has confirmed that all of these requirements are met, and transfers that would be subject to a penalty would be those that were made on or after the 60 months preceding this same date.

It would appear that persons who have transferred assets need to request that the application for HCBW still be taken, a care plan developed and proof provided that a waiver slot is available to establish the date all of these requirements have been met.  Hopefully Medicaid will develop procedures to document eligibility for HCBW subject to the penalty so that services can begin when the penalty has run.

The CMS revised guidance can be read here.


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Planning for the Rising Cost of Long-Term Care

Physiotherapist Holding Senior Patient's Hand On WheelchairPlanning for long-term care is an important issue to tackle, and the latest forecast shows that the associated costs of care are reaching well beyond the average person’s means.  This makes planning to save an estate an important proposition, and the earlier the planning, the greater the options.

The median cost of a private nursing home room in the United States has increased to $97,455 a year, up 5.5 percent from 2016, according to Genworth’s 2017 Cost of Care Survey.  Genworth, an insurer, surveys and publishes long-term care prices across the country annually and provides a benchmark for what caregivers will need to finance long-term care.  The company reports that the median cost of a semi-private room in a nursing home is $85,775, up 4.44 percent from 2016.

The price rise was slightly less for assisted living facilities, where the median rate rose 3.36 percent, to $3,750 a month. The national median rate for the services of a home health aide was $22 an hour, up from $20 in 2016, and the cost of adult day care, which provides support services in a protective setting during part of the day, rose from $68 to $70 a day.

For Alabama, the Genworth survey reports that the average semi-private nursing home room in 2017 was $72,996 per year/$6,083 per month (up from $71,172 per year/$5931 per month from 2016), and the average private nursing home room was $77,568 per year /$6,464 per month (up from $75,192 per year/$6,266 per month in 2016).  The average assisted living facility was $36,684 per year/$3,057 per month (up from $34,800 per year/$2,900 per month in 2016).

Alaska continues to be the costliest state for nursing home care, with the median annual cost of a private nursing home room totaling $292,000. Oklahoma again was found to be the most affordable state, with a median annual cost of a private room of $63,510.

The 2017 survey was based on responses from more than 15,000 nursing homes, assisted living facilities, adult day health facilities and home care providers. The survey was conducted by phone during May and June of 2017.


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Medicare Improvement Standard

Have you or a loved one been denied Medicare-covered services because you’re “not improving”? Many health care providers are still not aware that Medicare is required to cover skilled nursing and home care even if a patient is not showing improvement. If you are denied coverage based on this outdated standard, you have the right to appeal.

For decades Medicare, skilled nursing facilities, and visiting nurse associations applied the so-called “improvement” standard to determine whether residents were entitled to Medicare coverage of the care. The standard, which is not in Medicare law, only permitted coverage if the skilled treatment was deemed to contribute to improving the patient’s condition, which can be difficult to achieve for many ill seniors.

Three years ago in the case of Jimmo v. Sebelius the Centers for Medicare & Medicaid Services (CMS) agreed to a settlement in which it acknowledged that there’s no legal basis to the “improvement” standard and that both inpatient skilled nursing care and outpatient home care and therapy may be covered under Medicare as long as the treatment helps the patient maintain her current status or simply delays or slows her decline. In other words, as long as the patient benefits from the skilled care, which can include nursing care or physical, occupational, or speech therapy, then the patient is entitled to Medicare coverage.

Medicare will cover up to 100 days of care in a skilled nursing facility following an inpatient hospital stay of at least three days and will cover home-based care indefinitely if the patient is homebound.

Unfortunately, despite the Jimmo settlement, the word hasn’t gotten out entirely to the hospitals, visiting nursing associations, skilled nursing facilities, and insurance intermediaries that actually apply the rules. As a result, the Jimmo plaintiffs and CMS have now agreed to a court-ordered corrective action plan, which includes the following statement:

“The Centers for Medicare & Medicaid Services (CMS) reminds the Medicare community of the Jimmo Settlement Agreement (January 2014), which clarified that the Medicare program covers skilled nursing care and skilled therapy services under Medicare’s skilled nursing facility, home health, and outpatient therapy benefits when a beneficiary needs skilled care in order to maintain function or to prevent or slow decline or deterioration (provided all other coverage criteria are met). Specifically, the JimmoSettlement required manual revisions to restate a “maintenance coverage standard” for both skilled nursing and therapy services under these benefits:

Skilled nursing services would be covered where such skilled nursing services are necessary to maintain the patient’s current condition or prevent or slow further deterioration so long as the beneficiary requires skilled care for the services to be safely and effectively provided.

Skilled therapy services are covered when an individualized assessment of the patient’s clinical condition demonstrates that the specialized judgment, knowledge, and skills of a qualified therapist (“skilled care”) are necessary for the performance of a safe and effective maintenance program. Such a maintenance program to maintain the patient’s current condition or to prevent or slow further deterioration is covered so long as the beneficiary requires skilled care for the safe and effective performance of the program.

The Jimmo Settlement may reflect a change in practice for those providers, adjudicators, and contractors who may have erroneously believed that the Medicare program covers nursing and therapy services under these benefits only when a beneficiary is expected to improve. The Settlement is consistent with the Medicare program’s regulations governing maintenance nursing and therapy in skilled nursing facilities, home health services, and outpatient therapy (physical, occupational, and speech) and nursing and therapy in inpatient rehabilitation hospitals for beneficiaries who need the level of care that such hospitals provide.”

While this doesn’t change the rights Medicare patients have always had, it should make it somewhat easier to enforce them. If you or a loved one gets denied coverage because the patient is not “improving,” then appeal.

To read the court order implementing the new corrective action plan click here.


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Dementia Resource Publication

We have been working on a publishing project with Middle Alabama Area Agency on Aging (M4A) to produce dementia friendly resources for professionals and caregivers.  This booklet was published in June 2017 and can be read here.  To download you will need to go to the publishing platform, Issue, to create a free account or download the pdf here.  Printed copies may be obtained by contacting M4A at (205) 670-5770 or toll free (866) 570-2998.