Beneficiaries in Orange

On a “listserv” we both read, a colleague, Nathan Piwowarski, posted a helpful explanation about litigating SCRA cases. He also provides tips on how a trust should be drawn up to avoid claim of the Michigan Department of Corrections for reimbursement for the costs of imprisonment. His remarks build on my post, “Chains of Blood; Bars of Steel.”  He has kindly allowed me to quote him here:

I recently litigated a matter concerning the State Correctional Facility Reimbursement Act (SCFRA), MCL 800.401 et seq. These matters are prosecuted by a small group of Assistant AGs in the Detroit office.

Procedurally, here is how these cases work: the inmate is supposed to disclose the asset in a questionnaire that is put before them while incarcerated. Oftentimes, however, the state discovers an asset when a trustee sends an accounting or notice of trust administration to an inmate. Upon receiving the disclosure, the State Treasurer will sue the trustee and inmate/beneficiary to freeze the assets. The SCFRA proceeding will be in the circuit court that sentenced the inmate. If you know that this is inevitable, I strongly suggest that you proactively petition the probate court for instructions regarding the trust estate’s vulnerability to the SCFRA claim. This may afford you the ability to shop your forum a bit, too. If you do not file the petition for instructions first, you will have to respond to the SCFRA complaint and deal with the coordination of the probate and circuit court proceedings, or simply raise your defenses in circuit court (unless I know that the circuit judge is familiar with these types of issues, I tend to prefer having a probate judge hear these arguments).

Substantively, the case law you’ll want to start with is: Miller v Dep’t of Mental Health, 432 Mich 426; 442 NW2d 617 (1989); Treasury Dep’t v Turner, 110 Mich App 228 (1981); and, In re Wright Trust, an unpublished opinion of the Michigan Court of Appeals, 2015 Mich App LEXIS 543, at 12 (Ct App, Mar. 17, 2015). My quick take is that these assets are vulnerable to a SCFRA claim because the trust instrument just provides for delayed distribution of assets. To have an ironclad SCFRA defense, the assets would have to be held in a pure discretionary trust, and there would have to be at least a possibility that neither the income beneficiary nor his estate would ever receive distributions.

Nathan Piwowarski
McCurdy Wotila & Porteous, PC
120 West Harris Street
Cadillac, Michigan 49601
direct phone line: (231) 577-5246
general office line: (231) 775-1391
fax: (231) 577-1488
email: nathan@mwplegal.com
http://www.mwplegal.com

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The BCBSM Stone Wall

A law firm that assists clients with public benefits applications frequently runs into boneheaded bureaucrats who consider it their mission to make it as difficult as possible for anyone outside the organization to receive the services they are due. Usually, a supervisor or a representative at a different office or branch can be found who will be more cooperative. Seldom does the law firm find itself trying to transact business with an entire organization of obstinate, discourteous boneheads. Blue Cross Blue Shield of Michigan (BCBSM) is such an organization.

Trying to procure a paper premium statement can take weeks if the insured person is not able to call BCBSM, hang on the line for 30 minutes or more, and explain what is wanted. When the insured is represented by an agent under a durable power of attorney, a retained attorney, or the spouse who pays the premiums, getting a paper premium statement usually involves a lengthy telephone campaign to get permission to mail or fax the power of attorney. Then it is necessary to wait for days for some sort of response.

Bear in mind that the information sought is not confidential medical records covered by HIPAA. It is just a paper premium statement that could be sent to the insured in the normal course of business.

Recently, a client told us that she had been trying for weeks to get a premium statement from BCBSM. She was told that a company release of information would be sent to her. It never came.

Because of past experience, I directed my request for a premium statement to Jeffrey Rumley, General Counsel of BCBSM. I attached the power of attorney signed by the insured appointing his agent. I also attached the release of information and appointment of representative giving me the right to request information and represent the insured. That document was signed by the agent. Nearly every bank, insurance company, real estate agent, brokerage firm, and government agency with which my office deals would honor a request backed up with a power of attorney and release of information. Not BCBSM!

Two days after emailing Mr. Rumley, my office received a call from a BCBSM representative. She stated that BCBSM does not recognize any power of attorney drawn up by an attorney — which is asinine. She stated that to get any information, the insured, who is in a nursing home and incapacitated, must sign a request on BCBSM’s form.

Furthermore, she stated that BCBSM would not fax the form, it would have to be mailed. There was no explanation of why they could not fax the form to my office, despite the fact that it would have no personal information of the insured – or anyone else – on it.

After a second emailed letter to Mr. Rumley, an assistant general counsel finally provided a link to procure the form for an agent under a power of attorney and a dizzying array of similar forms. The forms are, and have been, available to anyone with online access. Why the BCBSM representative was so coy is a mystery.

For BCBSM, which recently inflicted double-digit premium increases on its customers, to make it so difficult for people in nursing homes to get information needed to apply for Medicaid is appalling. There are thousands of BCBSM insureds receiving long-term care. There is no excuse for making it an excruciating ordeal to get premium verification for Department of Health and Human Services. Instead of erecting a bureaucratic brick wall, it should be possible to request that verification be sent to the Medicaid agency with a telephone call:

BCBSM: How may I help you?

Caller: I am applying for Medicaid for my mother, Suzanne Sugerbaker, and I would like insurance coverage and premium verification to give the worker.

BCBSM: We can send that directly to the Medicaid agency if you give me Suzanne’s Blue Cross member number and the case number assigned by Medicaid or her Social Security Number.

Caller: Suzanne’s Blue Cross member number is IDK313250075. Her Medicaid number is 8182850205.

BCBSM: Thanks, I’m sending the information right now.

This should not be difficult. If Google knows that I went to Wendy’s at noon and ate a Double-Double Baconater, then went to Walgreen’s at 2:24 p.m. and bought Nexium, how hard could it be for an IT juggernaut like BCBSM to verify a member’s premium and coverage to a government agency through a data link? I’ll bet that BCBSM already keeps track of how many Baconaters I eat.

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

©2017 John B. Payne, Attorney