family responsibilities for providing care & assistance and its potential impact on medicaid...
TRANSCRIPT
Family Responsibilities for Providing Care & Assistance and Its Potential Impact on Medicaid Planning
Christina Lesher, JD
5615 Kirby Drive, Suite 412
Houston, Texas 77005
www.LawLesher.com
Facebook: Law Office Of Christina Lesher
An Increased Need for Care
Increased Population of Baby Boomers.
Increased burden on the health care system.
Estimated 10 Million Baby Boomers Will
Develop Alzheimer's Disease.
http://www.newsmania.com/difficult-learning-processes-stimulates-the-elderly%E2%80%99s-brain-4241/group-of-older-peoples-get-together/
Filial Responsibility
Younger relatives with sufficient financial
means responsible for parents.
Usually require to provide sufficient food,
shelter, medical care and other basics.
Have been on the books since colonial times.
Most states do not enforce- but in our current
economic climate will this last?
Origins of Filial Responsibility Statutes Roman Law: The support of parents was the duty
of the offspring.
Based on a theory of reciprocity.
Parent took care of child, now child should take
care of parent.
Carried forward to English Poor Laws.
Relatives 1st source of aid and government
assistance 2nd
Ideals carried forward to the colonies.
Modern Applications of Filial Responsibility Statutes
Majority of the states include filial
responsibility laws.
Great depression and New Deal ended this
practice.
Workers who had paid into the system looked
to the government for assistance.
Advent of Medicare and Medicaid in 1960’s
further increased the aging populations
dependence on government funds for support.
http://northdallasgazette.com/2012/07/11/humana-active-outlook-walking-program-launches-to-improve-senior-health-through-physical-activity-and-socialization/
State Filial Responsibility Statutes Although a majority of the states have had filial
responsibility, only 30 state codes include such
laws.
Penalties for violating filial codes range from civil
monetary to criminal penalties.
http://blogs.prideangel.com/post/2012/02/Anonymous-sperm-donor-law-in-Canada-goes-to-appeal-court.aspx
State Filial Responsibility Statutes Continued
Most filial laws allow elderly parents or ad litem(s) to
seek financial assistance if the individual is
financially able to do so.
Other state codes also allow hospitals, nursing
homes and other health care facilities to seek
assistance.
Allowed third parties to bring suit against adult
children to recover against the debts of their parents.
Enforcing Filial Responsibility Statutes Four states have active filial responsibility statutes and
enforce them.
California, Pennsylvania, South Dakota, and Rhode
Island (RI only state to impose criminal sanctions.)
CA: only the indigent individual can try to obtain support.
PENN: Amount awarded for any 12 month period be the
lesser of 6 times the excess income of the responsible
party.
SD: Standing for any person or entity with an interest in
the elderly person’s financial interest.
Enforcing Filial Responsibility Statutes Continued Exemptions in most states for adult children who
were neglected or abandoned as minors.
Based on the theory of reciprocity, if the parent
did not provide for the child, then the child should
not later be required to provide for the parent.
Courts may consider several factors when
determining responsibility: Personal income Number of
dependents Living expenses Medical expenses Education costs
Tax Value/ Nature of
assets Need for savings Age of contributor
Filial Responsibility in Pennsylvania:
CASE: Health Care & Ret. Corp. of Am. vs. Pittas
The Statute at Issue: 23 Pa. Const. Stat. Ann. Sect. 4603
“Except as set forth in paragraph (2), all of the following individuals
have the responsibility to care for and maintain or financially assist
an indigent person, regardless of whether the indigent person is a
public charge:
Spouse of the indigent person.
Child of the indigent person.
Parent of the indigent person.
Paragraph (1) does not apply in any of the following cases:
If an individual does not have sufficient financial ability to
support the indigent person
A child shall not be liable for the support of a parent who
abandoned the child and persisted for a period of ten years
during the child’s minority.”
Statute was enacted and became effective in July of 2005.
Health Care & Ret. Corp. of Am. vs. Pittas
The Facts
September 24, 2007 mother entered skilled nursing facility
following car accident and rehabilitation.
About 6 months later in March of 2008, mother left the facility
relocating to Greece.
In May 2008 facility instituted filial support action against her
son.
Mother had a spouse and other children.
Facility and son went to arbitration and arbitrator found in
favor of the son. The District Court reversed, and awarded
facility $92,943.41 under the state’s filial responsibility statute.
Health Care & Ret. Corp. of Am. vs. PittasTake-a-ways:
(1) Nursing Facilities do not need to consider other sources of income
including spouse, other children or pending medical assistance claims.
(2) Facility must show that source of income chosen, here the son, has
the ability to pay.
Here Court found that net income of $85,000 and recent pay off
of a tax lien where son had previously paid $1,100/month was
sufficient.
But, there is no bright line rule derived from the case. Decision is
made on case-by-case basis.
http://www.budget101.com/family-finances/fees-fees-fees-3783.html
Health Care & Ret. Corp. of Am. vs. PittasTake-a-ways continued:
(3) Facility has burden to show that resident owing money to it is
“indigent.”
Court found burden was met by showing that mother’s
monthly sources of income totaled around $1000.00.
(4) Must show specific evidence of your inability to pay or specific
evidence that your spouse, child, parent, etc. is not indigent.
Court found that son failed to produce specific evidence of
either.
Health Care & Ret. Corp. of Am. vs. Pittas What else could have been argued by the son?
The amount awarded of $92,943.41.
Second part of the filial responsibility statute limits
the amount to the lesser of 6 times the excess of
the liable individual’s average monthly income over
the amount required for the reasonable support of the
liable individual and other persons dependent upon
the liable individual OR the cost of the medical
assistance for the aged.
Son did try to argue this on his latest appeal.
Health Care & Ret. Corp. of America vs. Pittas--Afterwards
Currently, highest court in the state denied to hear
the case on appeal.
Current legislation has been introduced to limit
impact of the Pittas case. One bill introduced
attempts to repeal the statute.
Case could impact other state’s decision to enforce
or toughen own Filial Responsibility Statutes.
Is This A Good Precedent to Set?
Additional Facts about John Pitta:
47 year old restaurant owner who is married with two
children.
Other siblings and spouse were located in Greece where
mother went when she left the facility. Thus he was the only
child remaining in the United States.
Is it right to place the burden on a family member to collect
payment from other family members to assist with payment?
Did the Pennsylvania Court comply with Federal law regarding
Medicaid accepting facilities?
Nursing Home Reform Law Congress passed Nursing Home Reform Law in 1987.
42 U.S.C. Sect. 1395i-3(c)(5)(A)(ii).
It mandates that a nursing home may not required a
third party guarantee (including family members) of
payment to the facility as a condition of admission or
continued stay in the facility.
It applies to all nursing facilities that accept Medicaid.
http://www.lpntrainingprograms.org/lpn-job-description
Nursing Home Reform Law continued
How have nursing facility responded?
By continuing to get a third party guarantee masked in the
contractual agreement for admission.
Some facilities label it “responsible party” while others still call
it a “voluntary” third party guarantee.
Expedited need and sensitive situations in admissions
create conditions where a party does not know it is
volunteering to assume liability. Nor do the nursing
facilities make clear by telling the families that it is not
required for admission.
These practices arguably violate the federal law.
Very few cases interpret the law. No cases currently
interpreting it in Texas.
Filial Responsibility in Texas
Passed in 1955.
Repealed in 1993.
Included, and only applied to, Guardianship Matters.
Section 423 provided that [when] “an incompetent has
no estate of his own, he shall be maintained: ….by the
children and grandchildren of such persons”.
“Expenses attending the confinement of an
incompetent shall be paid …of the estate…and if he has
none…by the person bound to provide for and support
of such incompetent.”
http://www.health.com/health/gallery/0,,20518814_3,00.html
Texas Filial Case Law State v. Stone 271 S.W.2d 741 (Tex. Civ.
App. 1954)
Claim against the estate of a former patient at Austin State Hospital (ASH).
ASH sought reimbursement for expenditures made in treatment of defendant’s son (son was in his 20s).
Father argued that he was not liable for debts incurred under a contract that he held no privity.
Court relied on 1955 filial responsibility act to determine that the father was responsible for his son’s care.
In determining if father had adequate assets, court held could only look to the assets father had at the time of his son’s treatment.
https://shortsweetandlovely.wordpress.com/2012/03/16/a-little-bit-of-texas-is-coming-soon/
Texas Filial Case Law Continued
California v. Copus, 158 Tex. 196, 309 S.W. 2d 227 (Tex. 1958).
State of California tried to recover funds expended on the treatment of an elderly women.
Son moved to Texas. Argued that no remedy available because he lived in TX and CA did no have jurisdiction.
Court rule that CA could recover for money spent when son did live in CA.
Son argue that CA rule ran against TX policy. Court disagreed. 1955 TX filial responsibility law never revised. 1993 TX repealed without comment.
Constitutional Challenges
Most filial responsibility law have withstood constitutional
challenges.
Swoap v. Superior Court of Sacramento County, 516 P.2d 840 (Cal.
1973).
Plaintiffs raised EPA argument. Claimed filial responsibility laws
apply unfairly to suspect classes (wealth & ancestry).
Court rejected this argument saying that no suspect classed were
targeted.
Court held that that the state had a legitimate interest in ensuring
that the needs of the elderly & indigent were provided for.
Similar court holding in South Dakota.
Son sued for costs of his mother’s medical care before her
death.
Justifications of Filial Responsibility
Utilization of filial responsibility will result in stronger
family bonds.
Governmental burden for funding and providing basic
necessities should be on the family.
Improve quality of life for elderly Americans.
If family resources were taken into consideration then
a large amount of people could be taken off Medicaid.
http://www.thelearningcommunity.us/about-us/what-we-do.aspx
Criticisms of Filial Responsibility Increased family tension.
Potential decline in “in kind” support of parents.
Those who are dependent of family assistance have a lower standard
of living.
Unlike child support, which ends, in most cases, at age 18, filial
responsibility may last a significantly longer time.
Requires suing his or her own child.
Cost of enforcement.
Unlike when filial responsibility first started, current American society
encourages separation of parent and child.
Criminal charges unlikely to help, older adults may expose child
caregivers to criminal liability.
Jurisdictional issues (eg. Copus case).
Impact of Medicaid Regulations on Filial Responsibility Laws Medicaid is administrated by the states, but
federally funded and with federal control standards.
Medicaid guidelines do not allow states to look at
family resources in determining eligibility.
These guidelines stopped courts from enforcing
filial responsibility laws in the 1970s.
States repealed there filial responsibility laws at the
threat of losing federal funding.
http://kccportland.blogspot.com/2012/07/talking-about-money.html
Impact of Medicaid Regulations on Filial Responsibility Laws Continued 1980s saw a change on Health and Human Services
(HHS) position on filial responsibility.
HHS encouraged use of filial responsibility laws.
1983 Transmittal letter stated “the law cannot limit
provisions requiring contributions from relatives…
the State may determine who is a relative…how
much relatives must contribute under the statute of
general applicability…and the methods of
enforcement.”
Impact of Medicaid Regulations on Filial Responsibility Laws Continued States legislatures and attorney general interpreted the
Transmittal letter and as ineffective given Congress’ previous
intent.
Controversy exists over the Transmittal letter.
Legal scholars believe it is invalid b/c:
Reversal of Congressional intent
Lack of proper administrative procedures
No cases have been filed challenging the Transmittal letter
Filial responsibility gained renewed attention.
Practitioners must be prepared for the possibilities that the
provisions will be used where filial responsibility laws still exist.
Impact on Medicaid Planning Recent changes to Medicaid eligibility rules
may be viewed as filial responsibility on a
federal level.
Passage of the Deficit Reduction Act.
Certain state Medicaid regulations force
individuals to look for family assistance.
http://livingstingy.blogspot.com/2011/02/problem-with-pills.html
Deficit Reduction Act
Signed on February 8, 2006 by President
Bush.
Implemented in Texas on October 1, 2006.
Major changes to the transfers to
family/friend, the start of the penalty period
and annuities.
http://alongtheblossomtrail.blogspot.com/2012/09/uscis-approval_16.html
Deficit Reduction Act: Changes in the Penalty Period
Medicaid assesses a penalty period or loss of eligibility of
benefits if an individual gives away money or assets.
DRA transfer rules apply to transactions after February 8,
2006.
For every $156.43 the individual gives away, he/she loses 1
day of benefit.
The start date of the penalty period begins when the
individual meets the income cap, asset cap, medical
necessity requirement, is in a Medicaid nursing facility,
Medicaid bed, and has submitted a Medicaid application.
Look back period changed from 3 to 5 years.
Deficit Reduction Act: Medicaid Estate Recovery State of Texas passed legislation requiring the
potential recoupment of Medicaid beneficiaries estate
after death.
Usually the house, which is exempt during the
beneficiary’s lifetime.
Applies to all applications after March 1, 2005.
Applies to the “estate” as defined by the Texas
Probate Code.
Families, under current strategies, exceptions and
exemptions, may be able to avoid recovery.
Texas Medicaid Rules: “Covert” Filial Responsibility
Texas Medicaid rules do not allow family member to
perform certain tasks.
Family members cannot be compensated for
House painting/ repairs
Mowing lawns
Grocery shopping
Cleaning
Laundry
Transportation to medical care
However third parties may be compensated for these
tasks.http://gorgeousingrey.com/single-girl-problems/
Texas Medicaid Rules: “Covert” Filial Responsibility Continued
The DRA drastically reduced the ability to
make gifts.
Clients can be in a difficult position if gifts
have been made and now the client needs
care.
Client has the burden of proof in showing that
in now way was the transfer made for Medicaid
purposes.
http://mashable.com/2012/11/28/facebook-wants-your-credit-card/
The Sandwich Generation Individuals caring for both their parents (financial or
in-kind assistance) and children.
Adult children will find their own resources stretched
as they care for their own children, plan for retirement,
and pay for their parents’ care.
Adult children may be forced to hire third parties to
provide for care they can do themselves, but Medicaid
will not allow for compensation.
Adult children will struggle to find quality care for
parents and funding of the care.
Ultimate Impact
Families without proper legal advice
may make transfers that impact
Medicaid eligibility.
Current economic conditions may bring
back an interest in filial responsibility
laws and enforcement.
Best balance is combination of payment
sources of the individual, the
government and familial assistance.