Beware of HMS

Medicaid estate recovery is now the law in Michigan, as previously discussed in “Medicaid Estate Recovery Mystification” in this blog. “.” The families of deceased Medicaid recipients should consult an attorney before opening a probate estate or responding to the demand for information from HMS, Michigan Medicaid’s estate recovery contractor.

When a government hires a for-profit company to handle tasks that would otherwise be handled by its own bureaucracy, protection of the rights of citizens and quality of performance are often ignored in the interest of profits for the government contractor. For example, this is seen with private operation of prisons and private security operators in public places such as courthouses and office buildings. Private companies hired by state Medicaid agencies to pursue estate recovery are typical of government contractors in this respect.

A client died about a year ago, survived by his wife, and with no probate estate. HMS sent their questionnaire and I responded with a letter informing HMS as follows:

I am informed that there are no probate assets and no probate estate will be opened. Under the estate recovery statute and the Estates and Protected Individuals Code, the personal representative is obligated to notify the Medicaid agency if an estate is opened. On opening an estate, the personal representative will provide the statutory notice to the Estate Recovery Program. You should be aware from the Medicaid file that the decedent is survived by his spouse. Therefore, the state is not entitled to pursue estate recovery.

HMS sent another letter demanding that I fill out their “voluntary” questionnaire and provide a copy of the death certificate, which I answered by telling to read my previous letter. Now they are calling and demanding the “voluntary” questionnaire and a copy of the death certificate.

I realize that the course of least resistance is to fill out the questionnaire and return it with the death certificate. However, they have no legal basis for their demand. I am concerned that HMS will harass the families of deceased Medicaid recipients and talk them into payments they are not legally required to make. If these pests are not ashamed to make ultra vires demands of attorneys, what will they tell family members?

Monday’s New York Times had a front-page article about hospitals, including nonprofits, that pursue uninsured patients in violation of their legal obligations not to do so. The hospitals receive millions from the state for indigent care, despite flagrant failure to allow uninsured patients to apply for compassionate exemptions. The hospitals and their attorneys routinely sue impoverished patients by the thousands. They take judgments on the chance that the patients might come into money or get jobs and the judgments will pay off. When there is money to be collected from vulnerable individuals and families, those in collection tend to take what they can get. That is disturbing when the collection agent is acting on behalf of a government or charitable entity required to play by its own rules.

HMS’s questionnaire is signed as an affidavit, so the person who fills it out is putting himself or herself on the line. If it is provided by an unwitting family member, there might be incorrect information, either including assets that are not liable for estate recovery or failing to identify assets that are liable. Both circumstances give rise to problems for individuals who are not obligated to sign any questionnaire. Michigan probate law directs the personal representative to notify the state when a probate estate is opened. It is the personal representative who has the duty to provide information, not miscellaneous family members.

HMS is a for-profit health-care management company that gets a percentage of whatever it pinches from the families of deceased Medicaid recipients. Its motivation is purely rapacious: The more it collects, the more it makes, just like any other collection agency. Lawyers should resist HMS’s illegal demands and direct clients not to “voluntarily” fill out and file the questionnaires unless they decide – after legal consultation – that it is in their best interest because they want to request the elusive and rare hardship exemption.

I filled out and filed two questionnaires indicating that the family was entitled to a hardship exemption. Instead of providing the form to substantiate the hardship, HMS turned the AG’s office loose to pursue the claim. I am litigating those at this time. It appears that HMS and the Michigan Attorney General will be no more respectful of individual rights than collectors working for payday lenders. Beware of Medicaid estate recovery and the private contractors engaged to bag the money.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com
 
©2012 John B. Payne, Attorney
 
 

The Guru’s Secret

As a lawyer with a post-graduate tax degree, I am known in some circles as a tax guru. I am also frequently consulted about Medicare, Medicaid and Social Security questions by other attorneys. One of the secrets to being a guru is knowing where to call to get information. Gurus cannot know everything so they have to know where to go for answers.

Social Security Administration, Medicare and the Internal Revenue Service have surprising good telephone hotlines that are available to answer citizen questions. I find that professionals can also get answers easily by calling the agency directly. Here are the numbers to call:

Social Security Administration 800-772-1213 (24/7)

IRS Individuals 800-829-1040 (M-F 7:00 a.m.-7:00 p.m.)

IRS for Businesses 800-829-4933 (M-F 7:00 a.m.-7:00 p.m.)

IRS for Nonprofits and Trustees 877-829-5500 (M-F 8:00 a.m.-5:00 p.m.)

The hotline for Medicare questions is 800 MEDICAR(e), numerically 800 633 4227. Although it is difficult to speak to someone on the Medicare hotline if you are not already enrolled in Medicare, enrollment questions are generally handled through the Social Security hotline.

There is no national Medicaid hotline and it is difficult to get answers about Medicaid that go beyond basic eligibility criteria. Many Medicaid agencies will only provide answers through local office staff and there is no access to staff for persons who are not applying or already enrolled in Medicaid. Nongovernmental organizations have contracts with Medicaid to answer citizen enquiries in most states, but the quality of the information varies from state to state and from person to person. Elder law attorneys may be able to provide the most helpful answers, but finding a knowledgeable Medicaid attorney can be difficult. Start with the attorney directory on the National Academy of Elder Law Attorneys website.

There are good times and bad times to call. In general, call early in the day and not on Monday or Friday. I usually call in, put the phone on speaker and wait for someone to pick up. You might have to penetrate several levels of advisors to get an answer to a difficult question, but it is cost-effective and the answer you finally get should be authoritative, if not conclusive. If you have called one of the above hotlines, please take our survey. If you have called more than once, please fill out multiple surveys.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com
 
©2012 John B. Payne, Attorney
 
 

Leave My PIP Alone!

Michigan’s automobile insurance companies would like to crimp motorist personal injury protection (PIP) benefits. The Republican majority claims that the expense of providing this coverage is crippling the Michigan economy, driving employers out the state, poisoning the air and water, increasing obesity, cancer and heart disease, allowing children to drop out of school earlier and earlier, causing telemarketers to call right at dinner time, and raising the television volume during commercials. In short, all of Michigan’s problems are caused by requiring unlimited PIP benefits.

Although Michigan voters have endorsed unlimited PIP benefits by referendum, the Michigan Chamber of Commerce and the insurance lobby have bought enough legislators to endanger the law. Michigan Rep. Harvey Santana offers a concise explanation of why such a change would be wrongheaded in “Rep. Santana on HB4936 and SB649.”

Gov. Rick Snyder and the legislature want to avoid the embarrassment of citizen review. The legislature attached an “appropriations” measure so that the law will not be subject to challenge by the people. This loophole allows the legislature and governor to pass laws that are not subject to referendum. The PIP-elimination bill includes an appropriation of chump change to print some brochures — a cheap trick to stymie the democratic process. If you read to the bottom of the bill, you find that $50,000 is appropriated to the Office of Insurance and Financial Servises “to implement this section.” That is like putting a thumb bell on the steering wheel of a 450 hp. Peterbilt flat-top sleeper and calling it a tricycle.

Proponents of this measure claim that it will reduce auto insurance premiums. Have you ever seen insurance companies reduce rates in response to favorable changes in the law? That is about as likely as the AFLAC goose showing up in your leaky rowboat. Consumers will not see any benefit from this bill, but it will drastically reduce the coverage for those who are seriously injured in auto accidents.

As a case in point, a Pennsylvania colleague was contacted by the wife of a seriously injured 50-year-old man. The accident was caused by an impaired driver. The husband received very severe head injuries and will be permanently disabled. The driver who caused the accident had minimal insurance and only $15,000 can be obtained. The husband owned three vehicles at the time of the accident, but his uninsured-motorist coverage was limited to $100,000 per vehicle. The cost of treatment for injuries has greatly exceeded the $315,000 available, so there is nothing for long-term care. This family, which includes two middle-school aged children will be financially ruined.

If this case were in Michigan, the husband would have unlimited PIP benefits to cover his lost wages and care needs of about $10,000 per month. Our legislature wants to eliminate this protection. The insurance lobby claims that the new law would still cover 99% of injured motorists, but 1% of motor-vehicle injury claims make up a lot of seriously-injured Michigan citizens. Tell your governor and legislators to leave our no-fault auto insurance coverage intact.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com
 
©2012 John B. Payne, Attorney
 
 

Bank Piggies

According to the New York Times, bank stocks and profits took a beating in 2011; but not their chief executives. Susanne Craig, “Bad Year for Wall St. Not Reflected in Chiefs’ Pay, New York Times, B-7 (January 20, 2012). Three big banks disclosed on Friday, January 20, 2012, that their top executives will receive massive awards of deferred stock for occupying their offices in 2011. You can talk about “Occupy” movements, but these pigs are not moving anywhere as long as they can wallow in their trough of money.

Banks are ramping up deferred stock awards to the top porkers while those further down th snorting order – those who really do the work – are finding their pickings are slimmer than a year ago. That does not mean that those excluded from the more succulent feeding bins are getting along on stems and seeds, but the banks’ boards could spread the loot more fairly.

Top executives’ pay packages are largely unrelated to stock performance. Corporate boards seem to think that the CEO should get the credit for a bank’s high profitability in good times, but “It’s the economy, Stupid” when a bank has a bad year. Boards of directors, unlike opposition politicians, are willing to assume that the bank would have been worse off if the CEO hadn’t done such a good job. Here are three hogs who can neither spell nor define “enough.”

Citigroup’s CEO, Vikram S. Pandit, sucked up $3.7 million in deferred stock in addition to his base salary of $1.75 million. As if $5.45 million is not enough for a piggie banker to live on, Mr. Pandit received a $16.7 million retention bonus, plus another $6.5 million in stock options. It is hard to justify such monstrous generosity to Mr. Pandit. Citigroup’s stock fell 44 percent in 2011, and bonuses for real employees amounted to chump change, if they received anything.

JPMorgan Chase, also had a rough year, with a 22% decline in share price. That did not restrain Chase’s board from slopping the chief executive, Jamie Dimon. He received $17 million in equity-linked stock for his work in 2010 and a similar amount for 2011.

Poor James P. Gorman of Morgan Stanley will take a 25% cut in his pay. Still, he will receive $9.7 in deferred compensation on top of his $800,000 base salary. He probably earned $8,000 of it.

Why are we ignoring the 1,200 lb. Yorksire boar in the room? It is bigger than the couch! The Yorkie being ignored is the fact that the upper echelons of corporate governance are not achieved through merit. Corporate CEOs and directors are appointed based on family and personal connections. It is nepotism and cronyism. See “Not All Pirates are in Somalia.”

We let these bank piggies loot their corporations and then give them favored tax treatment. While their paychecks are taxed as ordinary income, their immense awards of deferred stock end up as appreciation, not compensation and are taxed at the low, low capital gains tax rate.

It is an unfortunate fact that shareholders are sheep. As long as share prices stay reasonable and there are some dividends being paid, shareholders approve whatever corporate management puts on the proxy form. However, our economy would be healthier and those who do the work to keep the wheels of commerce turning would be better compensated if we no longer tolerated the current system of corporate governance based on banditry.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com
 
©2012 John B. Payne, Attorney
 
 

Kevin the Closet Coward

(Chorus)
He’s Kevin the closet coward.
He thinks men should never be afraid.
He’s brazen and bold and ensures growing old
By carrying his gun and his blade.

He quotes John Wayne, chapter and verse.
He walks like he’s riding a horse.
And problems, he’s assured, can always be cured
By direct application of force.

(Chorus)

He’s seen all the Clint Eastwood films.
He thinks Clint’s a man among men.
And crime would be ended, as the good lord intended,
If they’d just bring back hanging, again.

(Chorus)

He thinks that a good woman can
Be almost as smart as a man.
But if a woman’s superior, he can’t get too near her,
Or his ego goes limp in his hand.

(Chorus)

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com
 
©2012 John B. Payne, Attorney