Mark R. Friedman, Friedman Law

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Why Everyone should have a Healthcare Directive

Posted on: September 15th, 2014 by Mark R. Friedman

On a warm Florida night in February 1990, Terri Schiavo collapsed in her hallway. The 26-year-old had suffered a cardiac arrest and fallen into a permanent coma. When it became clear she would never recover, her husband sought to terminate life support, while her parents sought to keep her alive artificially. This disagreement sparked a furious legal battle and a national debate on religion, morality, mortality, autonomy and the right to die.

It also showed why everyone should have an advance directive for healthcare (ADH) that makes their own wishes clear.

An ADH is a document that takes effect if you are no longer able to communicate your healthcare wishes. For example, if you were unconscious in a coma, unable to understand decisions due to dementia, or unable to speak or write after a stroke.

An ADH contains an instruction directive and proxy directive. Your instruction directive (a.k.a. living will) sets forth your medical wishes. It should make clear your wishes regarding artificial life support if you were unconscious in a permanent vegetative state, or the final stages of a terminal illness. It should also set forth your wishes on experimental treatments, addictive pain therapies, any religious objections to treatment, etc.

In a proxy directive, you can appoint someone to be your healthcare representative, who can make medical decisions for you when you are unable. You should also grant your healthcare representative access to your protected patient information in the ADH. Otherwise, doctors may refuse to provide any information to your representative, citing HIPAA. If you have any family tension, you may also want to designate someone to manage who can visit you in the hospital.

Medical care is one of the most important and personal issues most people will ever face. With an advance directive, you can ensure your wishes regarding your medical care will be heeded. At FriedmanLaw, we will work with you to craft an advance directive that thoroughly implements your wishes. Call us today at (908) 704-1900 to make an appointment.

Miller Trusts to come to New Jersey Medicaid in November

Posted on: September 9th, 2014 by Mark R. Friedman

New details have emerged about New Jersey Medicaid’s shift to Miller trusts.

The state has indicated the Miller trust program will begin on November 1, 2014. People who use Miller trusts will reportedly be eligible for Medicaid in the month after the trust formation. So folks who qualify for Medicaid through a Miller trust created in October would be eligible in November.

The state will reportedly launch a website in October with more information on Miller trusts.

Although New Jersey is expected to end its Medically Needy program for institutional-level applicants, the state indicated it has received approval from the federal government to grandfather in all current Medically Needy beneficiaries. In other words, if you currently receive Medically Needy assistance in a nursing home, you would not need to do anything.

As we covered in previous blog posts, a Miller trust is a legal instrument that allows people with income higher than Medicaid limits (currently $2,163) to qualify for assistance. Currently, these folks can only qualify for the Medically Needy program, which pays for long term care only in a nursing home.

Previously, folks with higher incomes could only receive medical assistance in a nursing home, even if they were capable of living in a less restrictive environment. With Miller trusts, for the first time, New Jersey Medicaid beneficiaries with higher incomes are expected to be able to receive long term care at home or in an assisted living facility.

This is good news for seniors, people with disabilities and other folks who may need long term care. Come November, we expect that FriedmanLaw will have a powerful new tool to help each of our clients receive care in the most appropriate setting.

For more information on Medicaid and long term care, please see our Practice Areas and Q&A pages, or call us at (908) 704-1900.

New Jersey Guardianship for a Vulnerable Adult

Posted on: September 8th, 2014 by Mark R. Friedman

When seniors suffer from Alzheimer’s, dementia or other mental ailments, they can become vulnerable to exploitation.

We have seen folks have their accounts drained by new “friends” and lovers, become the victim of obvious scams, make terrible financial decisions on the advice of self-serving salesmen, and plow through their savings buying needless items from home shopping outlets.

The thing is, usually these are folks who have always been responsible in the past. They don’t recognize that their judgment is now being clouded by illness. They worked hard to make their money, and they won’t have anyone else tell them what to do with it.

If any of this sounds familiar with your parent or spouse, then you may wish to apply for guardianship.

A guardianship is a protective arrangement ordered by a court, in which a guardian is appointed to make decisions for a ward. The guardian can take control of the ward’s finances or prohibit certain people from visiting.

To appoint a guardian, the court must find that the ward lacks capacity. “Capacity” means having the mental wherewithal to make serious decisions and understand their consequences. Not having capacity due to an illness is called being “incapacitated.”

If you are seeking guardianship over someone, you will have to prove he is incapacitated. You must submit affidavits from two doctors who have recently examined the person (the court can order an examination if the person refuses). The court will assign the person his own lawyer, who will interview him and advocate for what he wants.

Appointing a guardian is a radical measure that takes away a person’s autonomy, so courts do so only where necessary, and in the least restrictive manner possible. The court can create a limited guardianship – for example, where the guardian only has power over certain financial accounts, or limited amounts. In an emergency situation, the court can also freeze bank accounts and appoint a temporary guardian.

If you are interested in applying for guardianship for a vulnerable adult, we are here to help. Call us today at (908) 704-1900 for more information.

Medicare to Assign Star Ratings to Hospitals

Posted on: September 4th, 2014 by Mark R. Friedman

Medicare will soon begin assigning hospitals star ratings, similar to nursing homes.

Medicare maintains a database with data for most hospitals in the United States, similar to its nursing home compare database. But unlike nursing homes, Medicare does not assign a star rating to hospitals. That is set to change later this year.

Last week, the New York Times published several pieces highly critical of Medicare’s star rating system for nursing homes. The Times criticized the ratings for being too reliant on data submitted by the nursing homes themselves, and for ignoring important information collected by the states, and concluded that the star ratings could mislead consumers. The Times proffers the example of a nursing home in California that was given the highest rating despite numerous problems.

One has to wonder whether the hospital ratings will be plagued by similar problems. Medicare’s hospital database provides more robust information than its nursing home database, probably because hospitals are more closely monitored than nursing homes.

Now, the hospital database provides raw data from which consumers can draw their own conclusions. With star ratings, a conclusion is drawn for consumers. I’m concerned that given the problems with the nursing home ratings, hospital ratings might make things less clear for consumers, not more clear.

New Jersey Guardianships for Children with Developmental Disabilities

Posted on: September 2nd, 2014 by Mark R. Friedman

If you have a child with developmental disabilities, you should consider applying to be his guardian when he reaches age 18. At age 18, a child becomes a legal adult and a parent can no longer make decisions for him, regardless of the child’s disabilities or whether he lives with parents. Without a guardianship, banks, hospitals, schools, government agencies and other institutions will have to follow your adult child’s instructions and not yours.

A guardianship is a protective arrangement ordered by a court, in which a guardian is appointed to make decisions for a ward. The guardian’s judgment is substituted for the ward’s, similar to a parent’s power over a child.

To appoint a guardian, the court must find that the ward lacks capacity. “Capacity” means having the mental ability to make serious decisions and understand their consequences. If a person lacks capacity due to a disability or illness, then the person is “incapacitated.”

Since guardianship involves taking away a person’s fundamental autonomy to make decisions for himself, courts are reluctant to appoint a guardian, and there are safeguards in place. The person who wants to be guardian has to prove that the ward is actually incapacitated. You will have to submit affidavits from two doctors who have recently examined your child. Your child will also be assigned a lawyer, who will interview your child and advocate for what he wants.

If your child is able to make some decisions but not others, the court can create a limited guardianship. For example, the guardian might make serious decisions such as on medical and financial issues, but the ward retains autonomy over everyday decisions. Some guardianships also leave specific powers to the ward, such as the right to vote, marry or make a will. In an emergency situation, the court can appoint an immediate temporary guardian or order a specific transaction or other protective arrangement.

If you are interested in applying for guardianship over your child with developmental disabilities, we are here to help. Call us today at (908) 704-1900 for an appointment.

Critics say Medicare’s Nursing Home Ratings are Deeply Flawed

Posted on: August 26th, 2014 by Mark R. Friedman

The New York Times released a report and editorial this week criticizing Medicare’s nursing home ratings system, saying Medicare’s nursing home ratings were deeply flawed and could mislead consumers.

Medicare maintains a database called Nursing Home Compare, that assigns star ratings similar to hotel reviews, with one star being lowest quality and five stars being highest.

The ratings take into account metrics like staffing and quality statistics. However, the Times says that these statistics are reported by the nursing homes themselves, who obviously have an incentive to report more favorable statistics, and are taken more or less at face value by Medicare.

The Times also criticizes Medicare’s ratings for failing to take into account negative information collected by the states. For example, the ratings consider fines imposed by federal regulators, but not state regulators. The Times cites as an illustration a nursing home in California, which has had no federal fines, but was fined $100,000 by state regulators for causing the death of a resident, and for which the state has received more than 100 complaints. Medicare awarded the nursing home a five-star rating.

My advice to consumers looking for an appropriate nursing home for a loved one, is that Medicare’s database may be a good starting point, but take it with a grain of salt. The database includes detailed information on inspection reports and federal violations, but it is missing quite a bit of important information. You should always tour a nursing home, speak with staff, and observe how residents are treated. You may also find it helpful to work with a geriatric care manager.

(Consumers may also wish to look at ProPublica’s nursing home violations database, including ProPublica’s New Jersey nursing home violations chart. ProPublica’s database is based on Medicare’s data, so the same caveats apply.)

If you or a loved one may soon need long term care in a nursing home or other facility, we are happy to work with you to find and fund appropriate placement. See our Practice Areas and Q&A pages for more info, or call us today at (908) 704-1900 to make an appointment.

New Jersey Estate Tax vs. Inheritance Tax

Posted on: August 25th, 2014 by Mark R. Friedman

Since the only certainties in life are death and taxes, today I’ll cover New Jersey’s death taxes. If you die in New Jersey, you face two potential taxes – estate tax, and inheritance tax. Most states only have one or the other, but New Jersey residents are subject to both. What is the difference between the two?

Estate tax is a tax on your estate – on what property you own when you die. It is determined by looking at how much you own on the date of death. If your total assets exceed $675,000 (after deducting expenses like funeral costs and legal fees), then you owe New Jersey estate tax.

(Note that New Jersey estate tax is different from federal estate tax, which is imposed on estates above $5.34 million and has a much higher tax rate.)

Inheritance tax is a tax on your heirs. It is determined by looking at to whom you leave your property. Whether by will or intestacy, if any of your property passes to anyone other than your spouse, child, grandchild, parent or step-child, then you owe inheritance tax. You should be aware of inheritance tax if you are considering leaving property to a sibling, cousin, nephew, niece, unmarried romantic partner or friend.

A simple way to distinguish these taxes is that estate tax is on property (your estate), while inheritance tax is on people (your heirs). Estate tax applies to your whole estate, while inheritance tax is imposed only on specific transfers to certain people.

At FriedmanLaw we can help your craft an estate plan that minimizes both estate and inheritance tax. Please see our Practice Areas and Q&A sections for more info, or call us today at (908) 704-1900 to make an appointment.

NJ Bill would require Hospitals to Instruct Family-Caregivers on Patient Care

Posted on: August 18th, 2014 by Mark R. Friedman

New Jersey may soon require hospitals discharging patients to educate their caregivers. When a patient is sent home, medical professionals would have to provide instructions on how to care for the patient to a loved one whom the patient designates.

So says a caregiver education bill before the New Jersey legislature. The bill has been approved by the Assembly, but is reportedly being held up in Senate, with hospitals requesting time to negotiate certain provisions. (Many hospitals already provide instruction to caregivers, but the bill would make it mandatory for all New Jersey hospitals.)

The bill is intended to ensure that family-caregivers (such as the patient’s spouse or children) are equipped with the knowledge required to care for their loved ones at home. In doing so, the bill seeks to reduce costly hospital admissions that could be prevented by competent care, and save money for patients and the Medicare and Medicaid programs.

We think this is an excellent idea, where possible. However, many patients’ needs will be beyond the capabilities of family-caregivers. For people who require twenty-four hour supervision, have complex medical needs, or do not have family members capable of caring for them, then care at home is probably infeasible. Long term care in a nursing home or assisted living facility may be necessary. If that is the case, Medicaid can pay for your long term care, and FriedmanLaw can help you obtain Medicaid in the most favorable manner.

Medicare will Coordinate Care for Chroncially-ill Patients

Posted on: August 18th, 2014 by Mark R. Friedman

Next year, Medicare will start paying doctors to coordinate care for patients with chronic illnesses. The decision will benefit patients with two or more chronic illnesses, who account for 93 percent of Medicare spending, according to the New York Times.

Coordinated care is meant to prevent inefficiency. For example, a patient who is very sick might receive care from ten different doctors over the course of a year. With so many providers in play, important information about the patient might be lost between offices. Follow-up with the patient may also be lacking – if he has surgery to make him healthy, then goes home and neglects to take his medicine or resumes unhealthy habits like bad eating, it defeats much of the purpose of the surgery.

With coordinated care, patients can sign up to have a doctor create a comprehensive plan of care. The care coordinator might assess the patient’s social needs that are affecting health outside the hospital; check whether the patient is taking medicine as prescribed; monitor care provided by other doctors; and help the patient transition home after hospital visits.

Coordinated care will cost roughly $500 per year, with patients footing 20% of the bill. This holistic approach to care is meant to keep patients healthier while saving money for the Medicare program, by reducing patients’ need for expensive surgeries and other procedures.

It seems likely that this approach will keep patients healthier, but whether it will reduce costs for Medicare remains to be seen. In a Medicare pilot program, coordinated care was successful at keeping patients out of the hospital, reducing patient hospital visits by as much as one-third. However, in the best cases the initiative was cost-neutral and failed to save Medicare money. Nonetheless, the government will try its hand at an approach that has already been embraced by the private sector (many private Medicare Advantage plans already offer care coordination).

It is worth noting that the concept of coordinating care for the sickest patients was pioneered in Camden, New Jersey. Dr. Jeff Brenner and the Camden Coalition of Healthcare Providers have shown that care coordination can be successful in bettering patient outcomes and reducing costs. Hopefully, Medicare will find similar success in its care coordination program.

Third Circuit Rules on Medicare Repayment in New Jersey

Posted on: July 31st, 2014 by Mark R. Friedman

In Taransky v. U.S., the Third Circuit ruled that Medicare can recover conditional payments despite New Jersey’s collateral source rule.

Medicare has a right to repayment when it pays for healthcare for a Medicare beneficiary, who then recovers those healthcare costs from a tortfeasor. For example, if Jane, a senior who receives Medicare, is hit by a drunk driver, Medicare will pay her medical costs arising from the incident. But if Jane later recovers for those medical costs in a lawsuit against the drunk driver, then she has to reimburse Medicare for the expenses it paid for which the drunk driver is responsible. These are called Medicare conditional payments.

However, under New Jersey’s Collateral Source Rule (N.J.S.A. 2A:15-97), a plaintiff cannot recover medical costs from a tortfeasor when those costs have been paid by another source (i.e., a collateral source). So if Jane’s medical care from the car accident were paid by her health insurance, then her damages against the drunk driver would be reduced by the amount her health insurance paid, to prevent a windfall double recovery to Jane.

The Third Circuit found that the Collateral Source Rule doesn’t apply to Medicare conditional payments since they have to be repaid. To illustrate the principle, if Jane has to repay the money she received from another source anyway, then she is not getting a double recovery, and she can recover full damages against the drunk driver.

Since federal law (the Medicare Secondary Payer Act) gives Medicare a right to repayment, Medicare conditional payments are not a collateral source and Medicare must be reimbursed from a plaintiff’s recovery despite New Jersey’s collateral source rule.

The opinion also sheds light on how courts will examine settlement arrangements to determine liability to Medicare. Plaintiff’s claim in this case sought medical damages, and when the claim settled, plaintiff released defendant from liability for all claims, including medical damages. Plaintiff then persuaded the New Jersey Superior Court to issue an allocation order finding that no portion of the settlement was for medical damages, and claimed she had no obligation to repay Medicare.

The Third Circuit held that because the settlement releases the defendant from liability for medical damages, plaintiff is liable to repay Medicare. The Third Circuit gave little weight to the allocation order, finding that because the order was unopposed and the “product of a pre-arranged agreement” between the plaintiff and defendant, the order was not on the merits and not binding.

In sum, Taransky provides significant guidance on how Medicare conditional payments should be handled in New Jersey.

For more info on Medicare in the context of a lawsuit, please see our Practice Areas and Q&A pages, and this article from Larry Friedman on conditional payments and Medicare set-asides.

New Jersey Medicaid to Allow Miller Trusts

Posted on: June 26th, 2014 by Mark R. Friedman

New Jersey residents with higher incomes may soon have new options for long term care.

New Jersey Medicaid announced it intends to clear the way for Miller trusts. NJ Medicaid will request approval from the federal government to discontinue its Medically Needy program for long term care. This would allow Medicaid applicants who seek long term care to begin using Qualified Income Trusts, or “Miller” Trusts (named after Miller v. Ibarra, 746 F. Supp. 19 (D. Colo. 1990)).

A Miller Trust is a legal arrangement in which the Medicaid applicant directs income in excess of the Medicaid limit to an irrevocable trust, which uses trust assets to pay the applicant’s long term care costs.

Practically, this decision affects people with incomes above the Medicaid limit, which in 2014 is $2,163. Currently for these folks, Medicaid only pays for long term care in a nursing home, limiting options. Healthier people who could have received care in an assisted living facility or at home, instead must enter a nursing home or forego long term care. But we expect that with Miller Trusts, people with higher incomes (such as from Social Security or a pension) will be able to receive Medicaid in these settings.

Federal law (42 USC 1396p(d)(4)(B)) prohibits the use of Miller Trusts in states that have a Medically Needy program, which is why New Jersey is seeking to discontinue Medically Needy institutional Medicaid. Notably, Medicaid has not proposed discontinuing Medically Needy Medicaid for people receiving non-institutional or “community” Medicaid – i.e., people in the community who use Medicaid for acute care, such as doctor and hospital visits. The proposal only affects Medicaid applicants who need long term care.

We expect that when Miller Trusts are implemented in New Jersey, FriedmanLaw will have a powerful new tool to help our clients obtain long term care in the most comfortable and appropriate setting.

For more information on Medicaid, long term care planning, protecting assets or other elder law issues, please see our Practice Areas and Q&A pages, call us at (908) 704-1900, or email at LAF@SpecialNeedsNJ.com.

IRS Resolves the “Key West Dilemma” by Recognizing Same Sex Marriages Throughout the U.S.

Posted on: August 29th, 2013 by Mark R. Friedman

The IRS announced today that they would treat same-sex couples as legally married based upon the couple’s state of ceremony, not their state of residence.

In June, the Supreme Court struck down Section 3 of the Defense of Marriage Act, meaning married same-sex couples could now enjoy the same privileges under federal law as heterosexual couples. However, same-sex marriage is permitted in only a small patchwork of states. Uncertainty remained over whether the government would define marriage based on where the couple was married, or where they lived.

For example, if a same-sex couple got married in New York, but lived in Florida where the marriage is not recognized (the “Key West Dilemma”), would the feds recognize the marriage?

The IRS today said yes, legal marriages will be recognized regardless of where the couples lives. This means that all same-sex couples can now benefit from filing joint tax returns, using the estate tax marital deduction, and more.

A plethora of other important government agencies have yet to chime in over whether marriage will be recognized based on state of residence or ceremony.