Nursing-Home Residents Have Rights – Protect Them!

Ina Jaffe, in “As Nursing Homes Evict Patients, States Question Motives,” NPR, May 26, 2017, uncovers a dirty little secret of the long-term care industry. Many managers in that business are willing to abuse residents and break laws to maximize profits.

Maryland is suing Neiswanger Management Services, or NMS Healthcare, for flagrant and massive Medicare and Medicaid fraud. The suit alleges that the nursing home company charged the state for services it didn’t deliver, specifically for discharge planning. Nursing homes are legally required to ensure that a discharged resident is transferred to a safe placement where he or she will receive necessary care. But the Maryland Attorney General says that NMS absorbed patients’ lucrative Medicare rehabilitation days then sent residents with complex medical needs to homeless shelters or to shabby rooming houses that they knew would abuse the residents and fleece them for their Social Security. The room-and-board homes where the patients were dumped additionally charged Medicaid exorbitant per diem rates. Many skilled nursing facilities try to maximize profits by squeezing patients out when their Medicare benefits are exhausted, but NMS managers and their accomplices lowered the bar to the level of organized crime.

Medicare pays skilled-care facilities about three times as much per day for rehabilitation as Medicaid does for nursing care. A well-run nursing home can make money on Medicaid long-term care residents, but not nearly as much as they rake in for Medicare patients.

We have seen the result in the banking industry when management shreds the rule book and requires staff to pursue profit without regard to any ethical, or even legal, standard. Wells Fargo put such extreme pressure on staff to open new accounts that representatives steamrolled customers into opening unnecessary accounts and resorted to fraud when the customers resisted. They would hoodwink customers into executing blank signature cards, then use the cards to open unwanted accounts. The sole objective was to open as many accounts as possible. Many Wells Fargo customers had their credit ruined and their financial security compromised by having multiple bank and credit-card accounts opened without their knowledge or consent.

When that rapacious management style is adopted by a nursing-home operator, the results can be even more appalling. NMS, a five-facility rehabilitation and long-term care chain in Maryland, is being sued by the state’s attorney-general for flagrant disregard of Medicare and Medicaid regulations and resident safety in its involuntary discharge policies. When the rehabilitation bed occupancy was at or near capacity, the discharge coordinators would resort to kidnapping to get the patients out on the 101st day, the point at which skilled-care benefits are exhausted. They would traffick the unfortunate victim out of town to the sleazy owner of a shabby tenement lacking in care staff and medication. Worse yet, many patients were dumped at homeless shelters, hospital emergency rooms, relative’s addresses, or even on the street. The AG’s complaint is a Dickensian catalogue of horrors.

It is difficult to find a principle or proposition that most people agree on. Vaccination is even a source of controversy. The one thing that nearly everyone over 65 will vehemently oppose is being placed in a nursing home. Baby Boomers and older folks are 99 & 44/100% likely to prefer vegetating at home in their own filth over going to a <shudder> nursing home. Despite that, according to the federal government, the most common complaint against nursing home operators is not bad food, lack of staff, poor care or abuse by staff or other residents. It is eviction – involuntary discharge.

As much as they hate going to a nursing home, most residents – particularly those with dementia – become accustomed to the routine and begin to trust the staff after a month or two. Call it Stockholm Syndrome, but the prospect of being moved can be more stressful than the prospect of remaining in place. A change in location and caregivers can cause significant deterioration for a resident with dementia. Even those who are not mentally compromised suffer ill effects when moved without proper planning and social services. That is why an abrupt discharge on day 101, with no warning, is oppressive without regard to the placement. NMS did not just ignore the proper procedures for discharge, they carted the patients off to unfamiliar and unsafe surroundings and delivered them to scoundrels.

The legal restrictions and requirements of involuntary discharge are described in “Nursing Home Evictions.” A nursing-home resident has rights that can be enforced, with the assistance of an elder law attorney. Many rehabilitation, or skilled-care facilities that also have long-term care beds prefer to keep their beds filled with Medicare rehabilitation patients, not Medicaid long-term care residents. They will tell the patients’ families that they must move the patient at the end of rehabilitation because “they do not have an available Medicaid bed.” That is often a bluff to get the patient out so they can offer the bed to a more profitable Medicare rehabilitation patient. When the family has an attorney running interference on behalf of the patient the facility nearly always “finds” an available Medicaid bed at the last minute.

It is a pity that so many of NMS’s victims had no one to protect their rights. It is no less than criminal that the authorities ignored NMS’s abuse of vulnerable and elderly adults for years.

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

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Vital Information about Medicaid and Long-Term Care

Please read this crucial explanation of the importance of Medicaid to long-term care residents and their families from the Long Term Community Coalition:  ltccc-medicaid-middle-class

Repealing the Affordable Care Act

Without spin or editorializing on the issue, here are some facts from The Center for Medicare Advocacy, medicareadvocacy.org, about the program Congress plans to repeal:

• The uninsured percentage of Americans under 65 is the currently the lowest in decades. Beginning in 2014, the rate dropped from 16.6% to 10.5%.
• As of March 31, 2016, 11.1 million people have coverage through the ACA Marketplace.
• As of 2015, 11 million people in 31 states and the District of Columbia had coverage through Medicaid expansion under ACA, out of a total of 81 million on Medicaid.
• There are 19 states that did not expand Medicaid: Alabama, Florida, Georgia, Kansas, Idaho, Maine, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Texas, Tennessee, Utah, Virginia, Wisconsin and Wyoming.
• However, the ACA resulted in 16,748,000 people becoming eligible for Medicaid as of September 2016.

Congress says it will replace the ACA with something better. Dare we hope?

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

Quest for Quality Care

When it becomes necessary to look for nursing home placement for a loved one, the Nursing Home Compare tool on the medicare.gov website is an important starting point for screening facilities. However, it is only a starting point and it has serious shortcomings. It is necessary to do further investigating and review prospective placements.

Effective February 20, 2015, the Centers for Medicare & Medicaid Services (CMS) made some changes to Nursing Home Compare. The Quality Measures (QMs) were recalibrated, antipsychotic drug use was factored into the QM star rating, and staffing criteria were changed. These changes made the tool better, but far from excellent.

Three measures are rated: (1) health survey measure, based on unannounced annual surveys and complaint surveys conducted by state survey agencies; (2) staffing, based on self-reported nurse staffing, and (3) QMs, based on resident assessments. The weakness in the rating system is reflected in the high scores prior to the latest round of improvements. Approximately 80% of facilities received four or five stars on their QMs because high scores on the self-reported staffing measure and QMs will inflate a facility’s overall rating. According to The New York Times there was considerable gaming of the rating system. Katie Thomas, “Ratings Allow Nursing Homes To Game System; Medicare’s Five Stars; Data Taken at Face Value Often Fails to Reflect Real Conditions,” The New York Times, page 1 (Aug. 25, 2014),

The new changes include recalibration of the QMs to identify the number of points to achieve different star ratings. CMS claims that the change will raise the standard for skilled-care or long-term care facilities and differentiate the facilities to make the system more accurate. In 2009 only one in ten facilities received five stars and one- through four-star ratings were roughly equal. By 2013, one-star ratings had decreased by approximately 85% and five star ratings had increased from 10% to 35%. This is like a school that consistently awards A grades to 35% of the students. No matter how you slice it, no more than half of any student body can be above average and no more than half of LTCFs should be graded at three stars or better. After recalibration, half of all facilities will still be receiving four or five stars on QMs, which indicates a rigged system.

Four-star staffing ratings are awarded to facilities that score four stars on both the registered nurse component and the staffing category. A facility cannot receive a four-star staffing rating if either of the individual measures is three stars. Staffing had been self-graded by the facilities, which made it an unreliable measure of quality, but CMS has announced that it would require facilities to submit direct-care staffing information electronically.

All this suggests that medicare.gov ratings may not be relied on exclusively in choosing a nursing home. The ratings are very approximate and are based on sporadic inspections by an under-staffed federal agency.

It is necessary for the family to investigate beyond looking at the ratings. This involves visiting facilities, talking to residents’ families and employees, checking reviews on the Internet and consulting a geriatric care manager if the family can afford it.

It is not sufficient to rely on the hospital social work staff. Hospital discharge planners are generally overworked and may be under great pressure to empty hospital beds for new admissions. On Friday afternoons, discharge planners are expected to clear as many beds as possible for weekend admissions. At such times, discharge “planning” often consists of finding the first skilled nursing facility that will take the patient.

Presumably, the Joint Commission http://www.jointcommission.org provides a standard for discharge planning, but there is almost no way for someone who is not in hospital administration to review the standard and demand that the service be properly delivered. This places the responsibility for finding a good rehabilitation facility or nursing home squarely on the shoulders of the patient’s family and friends.

While visiting skilled care and nursing facilities, try to observe resident-staff interactions, as well as the cleanliness of the facility. Take time to talk to residents and see whether those who appear distressed receive prompt care.

The 1987 Nursing Home Reform Law includes many guaranteed rights for nursing home residents:

A) The right to be fully informed of available services and the charges for them, facility rules and regulations, including a written copy of resident rights, contact information for the state ombudsman and state survey agency, state survey reports and the nursing home’s plan of correction, advance notice of a change in rooms or roommates, assistance if a sensory impairment exists, and the right to receive information in a language they understand.

B) The right to present grievances without fear of reprisal and with prompt resolution by the facility, to complain to the ombudsman program, to file a complaint with the state survey and certification agency, and to participate in the resident’s own care.

C) The right to receive adequate and appropriate care, to be informed of changes in medical condition, to participate in assessment, care-planning, treatment, and discharge, to refuse medication, chemical and physical restraints, and treatment.

D) The right to private and unrestricted communication with anyone regarding medical, personal, or financial affairs, and to refuse visits.

E) The right to remain in the nursing facility unless a transfer or discharge is for good cause and is preceded by adequate notice and due process.

F) The right to be treated with consideration, respect, and dignity, free of mental and physical abuse, corporal punishment, involuntary seclusion, and physical and chemical restraints, to self-determination and security of possessions, and to visits by the resident’s personal physician, representatives from the state survey agency and ombudsman programs, and by relatives, friends, and others of the residents’ choosing.

When visiting facilities, enquire of the admissions and administration representatives, other visitors, and staff about the facilities’ attention to resident rights. Most facilities allow free access to lobbies and common areas in the facility. It should be possible to talk to a variety of staff, contractors providing services, and other visitors. If the facility restricts access, that may be a sign that the care they provide is substandard.

Almost no one wants to go to a nursing home, but there is a high probability that the patient in skilled care will go to an LTCF at the end of rehabilitation, not home. One of the most important criteria in choosing a rehabilitation or skilled-care facility (SNF) is whether all beds are certified for both Medicare and Medicaid. Many SNFs use up the patient’s highly-profitable Medicare days, then tell the family to search elsewhere for a Medicaid bed. This makes it very difficult to find a preferred placement. Facilities are eager to accept patients who are eligible for the 20 to 100 days of skilled care that Medicare covers, but will turn away persons who rely on Medicaid.

Finding good care is a complex process. Engaging a fee-paid geriatric care manager is worth many times the cost. They can be located through the National Association of Geriatric Care Managers.  An experienced elder law attorney can also be very helpful.

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

©2016 John B. Payne, Attorney

Medicare Open Enrollment until December 7, 2015

I could have sworn the receptionist asked for my Medicare CAKE!

For older adults with limited income, Medicare Advantage plans, sometimes called “Medicare C” or Medicare Choice seem like an obvious choice because the premiums are lower. However, traditional Medicare and a Medigap supplemental insurance policy may be less expensive in the long run because more deductible and coinsurance costs are covered that way. Since open enrollment runs until December 7, 2015, now is the time to consider a change.

If you are returning to traditional Medicare after a period on Medicare Advantage you may not be eligible for the Medigap policy you had before you switched. Although you would have the right to purchase the same Medigap policy, the insurance company may no longer sell it. If that happens, unless you were under Medicare Advantage for more than a year, you have a guaranteed right to buy a Medigap policy designated A, B, C, F, K or L that is sold in your state. If you had Medicaid Advantage for a year or more or fail to apply within 63 days of the end of your Medicare advantage coverage, you aren’t guaranteed of acceptance to a particular plan. Of course, there would be other plans to choose. Pre-existing conditions would not be a basis to deny you coverage.

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

©2015 John B. Payne, Attorney

Vital Legislation for Persons with Disabilities

The Special Needs Trust Fairness Act has been re-introduced in this Congress as Senate Bill 349.  Please urge your federal legislators to vote for this bill.  Read about it here.

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

Medicare is Fiscally Healthy

Once again, Medicare is under attack.  The gaggle of anti-government ideologues who want to privatize Social Security, raise the retirement age and pack heat in church have backed off on repeal of Medicare, but are still determined to curtail it.  They want to “reform” Medicare by shifting more costs onto program members.  Retirees and the disabled need increased health-care costs the way Pres. Obama needs more critics.

The recurrent refrain of the Medicare doomflacks is that Medicare will go bankrupt in a few years due to the increase in members as Baby Boomers retire.  In reality, Medicare cannot go bankrupt because the Medicare Trust Fund is continually replenished by the Medicare employment tax.  Furthermore, the Medicare Trust Fund, which is a part of the Old-Age, Survivors and Disability Insurance Trust Fund, ebbs and flows in response to the U.S. economy.

Those who are covered by Medicare know what a wonderful program it is.  But for Medicare, most retirees in the United States would be forced to choose between medical care and food.  Having paid taxes for their entire working lives, retirees deserve the opportunity to see a doctor when necessary and to have hospitalization coverage.

Now that 28 states have adopted health care under the Affordable Care Act for their citizens, it would be a cruel joke on our senior population to jack up the cost of Medicare.  Drop a dime on your U.S. senator and representative.  Let her or him know that you do not support cutbacks in Medicare.

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

©2015 John B. Payne, Attorney

Immigrants Help Medicare

The border-security, keep-the-foreigners-out crowd argue that immigrants are an undue burden on our public services.  This blog has pointed out that both documented and undocumented immigrants are fiscally beneficial.  Documented immigrants are generally younger, healthier, and harder-working than the general population of the United States.  They pay more in taxes than they receive in benefits, at least until they age out of the workforce.  The undocumented also pay substantial taxes without being eligible for any benefits.

An article about Medicare in “Health Affairs” supports this argument.  Immigrant workers contribute substantially to Medicare and support its financial strength, according to the research reported.  Health Affairs, Immigrants Contributed an Estimated $115.2 Billion More to the Medicare Trust Fund Than They Took Out in 2002-2009, June 2013.

Between 2002 and 2009, immigrants generated $115 billion of the Medicare Trust Fund to pay for Part A inpatient, skilled nursing, home health, and hospice care for the aged and disabled.  However, Medicare expenditures for immigrants were lower than for U.S. born employees.  This is due to the high ratio of working-age immigrants to retirees.  This ration will continue to increase over the next 18 years, according to the Census Bureau.  In short, immigrants are good for Medicare.  More information is available at the Center for Medicare Advocacy.

 

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

 

©2013 John B. Payne, Attorney

 

 

An End to the Dreaded Plateau

On July 24, 2010, an article entitled “The Dreaded Plateau” appeared in this blog. It explained why some Medicare patients have trouble getting their full 100 days of skilled care or rehabilitation. The recent settlement of a federal class lawsuit addressed the “progress” requirement often incorrectly applied to patients in skilled care. The progress requirement is also referred to as the “improvement standard.”

Medicare covers up to 100 days of skilled care or rehabilitation. Rehabilitation or skilled nursing facilities will issue a Notice of Medicare Skilled Care Termination as soon as there is any doubt that the patient needs skilled care. Often the reason given is that the patient has reached a “plateau” in his or her progress. That requirement is not supported by Medicare law, but it was used by facilities and permitted to be used by the Centers for Medicare and Medicaid Services (CMS), the federal oversight agency for federally-supported health care programs.

The attorneys at the Center for Medicare Advocacy (CMA) are are true heroes in the battle to maintain a reliable, healthy Medicare program and in the struggle to help Medicare members get the best possible care. In conjunction with Vermont Legal Aid and other advocates, CMA achieved a landmark settlement with CMS. In Jimmo v. Sebelius, No. 11-cv-17 (D.Vt.), filed January 18, 2011, a proposed settlement was reached October 16, 2012. When the agreement is signed by the judge, CMS will revise the Medicare Benefit Policy Manual and other Medicare Manuals to correct suggestions that Medicare coverage is dependent on a beneficiary “improving.” New policy provisions will state that skilled nursing and therapy services necessary to maintain a person’s condition can be covered by Medicare. This settlement is described in detail on the CMA website.

 

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

 

 

Congratulations, You Are an Entrepreneur!

Rutt Gonad, a client, came to the office with a question about his employment as a ditch digger. His employer, Legree Construction, offered him a pay increase from minimum wage at $7.25 per hour to $8.00, if Rutt would agree to be an independent contractor, instead of an employee. If he agreed, Rutt would not have taxes taken out of his pay and he would receive a Form 1099 at the end of the year, instead of a Form W-2. Rutt wanted to know what the difference would be and whether it would be in his best interests to become an independent contractor.

An employee, even if the employee is “under contract” and receives no benefits, receives a paycheck from which taxes are withheld and at the end of the year he receives a W-2 reflecting wages and withheld amounts. An employer pays 5.2% Social Security tax and 1.45% Medicare tax on the employee’s wages. The employee pays the same amount. A self-employed person, however, has to pay both the employer’s share and the employee’s share of these taxes. Legally, the self-employed person, or independent contractor, is obligated to pay 13.3% on his or her wages, up to $106,800 per year. The self-employed person also must make quarterly payments on federal and state income tax obligations.

Rutt’s hourly wage of $7.25 is currently reduced by $0.48 for Social Security and Medicare and $0.60 for state and local income tax withholding. By taking the “deal,” Rutt would get $8.00 per hour in hand, but would have to pay $1.06 Social Security and Medicare taxes and make quarterly payment to the IRS for income tax. The employer saves the 6.65% employer portion of the payroll taxes on Rutt’s $7.25 per hour, $0.48, and avoids some of the payroll headaches of tax withholding. Being an independent contractor would only put more money in Rutt’s pocket if he does not pay his taxes. This makes him liable for prosecution for tax evasion, if caught. It also means that he is not contributing to Social Security, so his benefits would be reduced when he reaches retirement age.

Legree Construction is clearly a scofflaw company. Rutt goes to work at a specified time and uses company equipment to dig ditches. He is under the direction of a Legree Construction foreperson and is required to follow defined work rules to perform tasks as assigned. Rutt is now an employee and his circumstances would be unlikely to change if he became an “independent contractor.” For Legree Construction to call Rutt an independent contractor is contrary to tax law and regulation.

To be an independent contractor, Rutt would have to be paid by the job and be given considerable freedom in deciding how the job would be done. If Legree Construction assigned Rutt the task of digging a trench six feet deep and three feet wide from mile marker 100 to mile marker 101 on a certain highway, and gave him a deadline to complete the trench using his own equipment, Rutt could be an independent contractor.

At Rutt’s pay grade, there would be no advantage to being an independent contractor as opposed to an employee unless the pay for an independent contractor is much higher than the pay for an employee. However, there are some situations where it would make sense, particularly if the independent contractor formed a corporation or taxable limited liability company to perform the services.

If Lucretia Smith is a nursing assistant in a long-term care facility earning minimum wage, a 15 or 20% increase would not make it economically beneficial to form a corporation and have the corporation act as the independent contractor. However, if Pandora Mora is a nursing home administrator making $150,000 per year, it might be advantageous for her to form a C corporation, Pandora, Inc., or a taxable limited liability company, to contract with the facility for her services.

By acting as her own employer through a corporation, Pandora can reduce her employment taxes. If Pandora, Inc. receives $150,000 per year for Pandora’s services, but only pays her $50,000 per year, this would reduce the employment taxes by over 50%. If the other $100,000 is received by Pandora as corporate profits, she would not pay employment taxes on those receipts. This is not all peaches and cream because there would be corporate income tax on the profits, although there are a lot of deductions for such employee benefits as medical expenses, health and long-term care insurance, and pension funding. It becomes a very complicated trade-off.

If Pandora set up an S corporation or a limited liability company taxed as a sole proprietorship or partnership, there might be some savings on self-employment taxes. The profits after paying salary would not be subject to self-employment tax, but the medical expenses and various insurance premiums would not be deductible.

A low-wage worker is always better off as an employee than as an “independent contractor,” unless the worker is willing to duck income taxes and risk severe penalties, up to and including prosecution. If a low-wage worker is called an independent contractor, he or she probably is really an employee and is being taken advantage of by the employer. There may be tax benefits or other benefits to working as an independent contractor or under a corporate shell for higher-wage workers, but it is a complex set of factors that must be weighed and balanced.

 

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