Comprehensive Planning. Lifelong Solutions.

Beware Hospital “Outpatient” Observation Status

By Jessica A. Hayes

Picture this: You’re 80 years old and you suffer a fall that lands you in the hospital for a week. At the end of your stay, you are discharged to a rehab facility for three weeks of rehabilitation and skilled nursing care. The time you spend in the hospital and at rehab is stressful, but you rest assured knowing that you have Medicare coverage. Weeks later, the bills start pouring in, and you learn that Medicare has covered almost nothing. You now owe both the hospital and the rehab facility several thousand dollars. How did this happen?

Three words: Outpatient observation status. Hospital patients and their families are often blindsided by the effect of these words. Outpatient observation status is a billing code hospitals use to protect themselves from penalty by Medicare for admitting patients for treatment which Medicare believes should have been provided on an outpatient basis. Use of this code is on the rise, having doubled between 2006 and 2014, according to The Center for Medicare Advocacy. Unfortunately, this can result in Medicare patients who do not have Medicare Part B paying entirely out of pocket for their the full cost of their hospital stay, hospital prescriptions, and/or nursing facility (rehab) care following a hospital stay. The financial effects can be devastating.

Use of the word “outpatient” in this context is misleading. You may spend the night (or several nights) in a hospital and technically still be classified as outpatient. It has nothing to do with where you receive the care or what kind of treatment you receive.

To address the issue, Congress passed the Notice of Observation Treatment and Implication for Care Eligibility Act in 2015. The NOTICE Act requires hospitals to notify individuals who receive observation services as an outpatient for more than 24 hours with written and oral notification of the classification within 36 hours after they begin receiving the services. The notice must explain the individual’s status as an outpatient and the reasons for the classification. It must explain the implication of that status on services furnished, particularly the implications for cost-sharing requirements and subsequent coverage eligibility for services furnished by a skilled nursing facility. It must be written in “plain English” and be provided in the individual’s own language, and the individual or a person acting on his behalf must sign to acknowledge receipt of the notification. If the individual or his representative refuses to sign, the hospital staff who presents it must sign.

If you or a loved one is classified as outpatient observation status during a hospital stay, fighting the classification can be extremely difficult. The Center for Medicare Advocacy recommends the following:

  • At the BEGINNING of a hospital stay, have a proactive discussion with the hospital about your classification. Don’t wait to receive a written notice; try to prevent the use of outpatient observation status from the start.
  • Ask the hospital doctor to admit (or reclassify) you as an “inpatient,” based on needed care, tests, and treatments; then have your primary care physician call to support this request.
  • File an appeal with Medicare if your nursing home (rehab) coverage is denied.

File a complaint with your state health department if you did not receive a notice about outpatient observation status.

Kit KatAsk Kit Kat – Frog’s Secret Weapon

Hook Law Center:  Kit Kat, what can you tell us about the frog and its powerful tongue?

Kit Kat:  Well, this is a very interesting story. I had never thought much about how a frog catches its prey, but a Ph.D. student at Georgia Institute of Technology named Alexis Noel has done some research on the matter. The frog tongue can move quite rapidly; we’re talking milliseconds from time of sticking its tongue out and retracting its tongue back into its mouth. As helpful as this is, it’s not the secret to its prowess in hunting. That is attributed to its saliva or spit which is composed of a unique substance which can change in viscosity instantly. For instance, when the prey (usually an insect) is first on its tongue, the spit is very viscous, similar to the consistency of honey, only more so. Later, the spit can change into a thinner fluid as it closes its mouth. The spit can change rapidly from one state of viscosity almost instantaneously. As a result, they can “capture meals in the amount of time it takes a human brain to think of and speak a word,” according to Noel and her colleagues.

Another thing Noel discovered about frogs’ tongues is that they are much softer than a human’s tongue. When compared to human tongues and human brains, a frog’s tongue is “slightly softer than (human) brains and 10 times softer than human tongues.” The softness contributes to elasticity, which in turn allows the frog to keep its prey inside its wide mouth and not fall out. Then to swallow the prey, the frog pushes down its eyeballs creating pressure to move the prey from the tongue to the throat. In addition, Noel and her colleagues teamed up with the Atlanta Botanical Garden to discover that 7 species of exotic frogs also had the same characteristics of extremely soft tongue tissue and the changeable viscosity of spit of the ordinary frog. These small amphibians are marvels of efficiency in securing prey to ensure their survival. What an interesting world we live in! (Ben Guarino, “Scientist cracks mystery of the frog’s powerful tongue. It’s called spit,” The Washington Post, February 1, 2017)

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Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Friday, February 24th, 2017. Filed under Newsletter.

Exceptions to Medicaid Estate Recovery

By Shannon Laymon-Pecoraro, CELA

A large number of clients worry about the consequences of utilizing Medicaid to pay for long-term care. Most importantly, they have received information from non-legal professionals that Medicaid will take their home or that the spouse will be impoverished. The good news is that with proper planning your entire estate may be free from estate recovery.

When an individual age 55 or older dies, states are required to seek recovery of payments from the individual’s estate. Since the assets of an individual must have countable assets valued below $2,000, collectability is often an issue. Good planning and inherent exceptions to estate recovery further complicate recovery.

Some estate will be exempt from Medicaid estate recovery. The most common exemption is the existence of dependents. The state is prohibited from initiating estate recovery if a spouse, a child under age 21, or a disabled child survives the beneficiary.

Another exception to Medicaid estate recovery exists when recovery would case an undue hardship on the heirs. Undue hardships include cases where the survivors make a living from the asset, such as a family farm or other family business, when assets are illiquid, when a home is of modest value, or when recovery would not be cost effective.

Additional exemptions may also apply depending on what type of planning was done. For example, savings bonds, which are governed by the regulations imposed by the U.S. Treasury, may be exempt from estate recovery under certain circumstances. Additionally, real property for which the recipient held a life estate, or real property that was transferred out of the recipient’s name, would not be included in the estate, and therefore would not be subject to estate recovery.

While not all estates will be completely exempt from Medicaid estate recovery,, knowing what will happen to your estate during the planning so that you can minimize potential consequences both during lifetime and after death is imperative. The staff of the Hook Law Center not only help address a family’s concerns related to the potential risk of losing assets, but also help families assess other consequences, such as the tax implications of transferring a home or low-basis investment.

Kit KatAsk Kit Kat – Misnamed Rat

Hook Law Center:  Kit Kat, what can you tell us about the origin of the Norway rat?

Kit Kat:  Well, this ubiquitous rat of the United States is incorrectly named. It is known as the Norway rat or brown rat, but oddly enough, it did not come from Norway. The mix-up occurred around 1769 (18th century) when the British naturalist, John Berkenhout, wrote of its arrival in England from Norwegian ships. However, this was incorrect. Other records show that the brown rat arrived in Europe at the start of the 17th century attracted to cities with its brick and stone construction. But, somehow, the name persisted. The Norway/brown rat then made its way to North America on boats with the legions of immigrants who would settle the new lands. Today, rats can be found on every continent except Antarctica. Its cousin, the black rat, is generally smaller and is sometimes known as the ‘roof rat.’

Other myths about rats are now being re-examined. The Norway rat seems to be in the clear as to its role in the bubonic plague. The black rat may have had a part to play in the plague, but not so much as previously thought. Current research into the matter leads us to the possibility that the plague was transmitted via gerbils and/or through the air. As merchants traveled to the East along the ancient Silk Road, they may have picked up the deadly disease through a combination of factors.

So let’s refer to this resourceful creature as the brown rat. It can reproduce quite easily. Females are fully mature at three months, and the gestation period is only three weeks long! So, they are quite numerous. They are very content to feast on garbage and other leftovers they find in their environment. They’re not out to hurt their fellow humans. Isn’t it interesting to know more about the creatures in our midst? (Dave Taft, “A Rat with a Bum Rap. And It Isn’t Even Norwegian,” The New York Times, NY Region, Jan, 31, 2017)

Upcoming Seminars

Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Monday, February 20th, 2017. Filed under Newsletter.

Issues to Consider when Your Child Goes off to College

By Elizabeth Boehmcke

It’s February, folks. That means that college acceptance letters will soon be arriving via email, snail mail or however they get around these days. Once the initial euphoria has worn off and you know that your child is definitely going to college and you have made peace of a sorts with how you are going to pay for that, take a moment to consider some other items for your to-do list before your child packs up and leaves this summer. If your child is eighteen (18), he/she is now a legal adult. Believe me, I know it is hard to grasp sometimes when you look at your newly minted adult and try to comprehend how it is possible that he/she could be an adult while you are listening to the same implausible explanation that you have heard too many times to count for why they are late, why their homework is undone, or why they can’t manage to clean their room. While you may find it laughable that your child is considered an adult under the law, it is not so laughable when you think through the consequences. Legally speaking, you no longer have the right to control your child’s finances or make healthcare decisions for him/her. You have no right to speak with your child’s doctor to get information about his/her health conditions. This is downright frightening for most parents, especially when you consider that your child may be on his/her own hundreds of miles away and you know for a fact that he/she can’t remember the time of day, much less be able to recite his medical history for a doctor.

There is an answer to this problem. We recommend that young adults execute general durable powers of attorney, advanced medical directives and HIPAA releases, so that their parents have the power to act as surrogate decision makers while their children are off at college.

The power of attorney would allow a parent, acting as an agent, to assist his/her child with bill-paying to make sure that tuition is paid or that scholarship forms are appropriately filled out. It would allow the parent, as agent, to access the child’s bank and credit card accounts to help him/ her better manage money. Being an adult does not automatically confer wisdom about handling money and maintaining a budget. Being an involved parent, on the other hand, does allow you to guide and instruct your child and, if necessary, to jump in before a little problem becomes a huge problem. If you do not have access to your child’s accounts and financial information, you may not be able to assist your child when they hit that first, inevitable, bump in the financial road. Imagine your frustration at calling the bursar’s office to check on their receipt of an important check only to be told that they cannot tell you anything and you have to round-up your child to get the information or worse, get the child to appear at the bursar’s office to ask the question himself. Even the most responsible ones will be hard to find as they experience the freedom of college living.

An advance medical directive and accompanying HIPAA release is an important part of the equation as well. While many think of an advance directive as being limited to end-of-life decisions, this is only one part of a well-drafted advance directive. In the case of young adults, it serves a vital function of appointing an agent to make health care decisions for them if they cannot do so themselves. The HIPAA release authorizes a doctor to communicate with a parent about the child’s medical condition so that, even if the child is not wholly unable to make a decision, it allows a faraway parent the ability to participate with the doctor and the child in making important decisions. If the child cannot make his/her own decisions, either because the child has been seriously injured in an accident or has psychiatric or dependency issues, most parents and children would want the parents to be informed of the situation and to be involved in the decision-making process. Nothing could be scarier than calling a hospital only to be told that privacy laws prevent the doctor from speaking to you about your child.

By executing these documents on attaining the age of eighteen, young adults and their parents can feel secure in the knowledge that the safety net on which they have all relied since birth will remain in place until such time as the children are really ready to be totally on their own. The vast majority of children will likely leave these documents in place until they are ready to do some estate planning on their own. And that is not a bad thing. Come see the attorneys at the Hook Law Center – we can help you with all life’s transitions from the birth of a new baby to the baby leaving the nest, from marriage to divorce, from planning for retirement and long-term care to the death of a loved one. We’ve got you covered.

Kit KatAsk Kit Kat – Westminster Dog Show

Hook Law Center:  Kit Kat, what was new at the Westminster Dog Kennel Club Show that was held on February 13-14, 2017?

Kit Kat:  Well, a couple of things were new this year. In my opinion, the biggest news was that cats were included for the first time this year. The cats weren’t actually in the show, but they were part of a ‘Meet the Breeds’ event which took place on February 11, 2017 before the actual dog show. At this event, dogs and cats were featured in booths in which the owner could have them displayed with information about the animal—where they originated from, etc. Booths could be decorated any way the owner chose. It made for an interesting event with both cats and dogs dressed up in all their finery!

Also, new to the Westminster Dog Show were 3 new breeds. This helped expand the number of participants to nearly 3,000 dogs. Wow! Can you imagine that many dogs in one place? Anyway, the 3 new breeds were: the American Hairless Rerrier, the Pumi, and the Sloughi. Can’t tell you much about 2 of the breeds, but the Pumi looks to me like a miniature poodle with a squarer face. Actually, Wikipedia defines it as a herding terrier from Hungary of small/medium size. It definitely is a good-looking dog, who I am sure will increase in popularity due to its compactness and personality.

So, kudos to the Westminster Dog Kennel Club! They are showing an inclusiveness which animal lovers can’t help but enjoy! (http://www.usatoday.com/story/news/nation-now/2017/02/01/ westminster-dog-show-going-cats/97329506/)

Upcoming Seminars

Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Monday, February 13th, 2017. Filed under Newsletter.

Commonly Overlooked Tools for Incapacity Planning

By Stephan A. Lipskis

Every individual should have a plan for when they can no longer make decisions for themselves effectively but most delay planning because it entails the confronting their fears about disability, death, and dying. As the U.S. population ages in greater numbers due to aging baby boomers and increased longevity, the marketplace has responded to the needs of such planning. Accordingly, here are a few tools that are currently available, but often overlooked, to assist in planning for disability, incapacity, or death.

Elder law attorneys are probably the most overlooked tool for incapacity planning. Beyond providing the legal documents and tools for effectively coordinating decision making and financial management, elder law attorneys provide an experienced concierge in areas most people have not confronted, such as coordination of benefits, hiring of supplemental providers, and coordinating financial planning. Furthermore, elder law attorneys focus on the effective implementation of their documents. Put simply, a power of attorney or other document is false comfort if the document cannot be used effectively when needed.

Aside from attorneys, financial advisors are underutilized as a tool to address incapacity and death. Building a solid relationship with a financial advisor can be an extremely effective way of coordinating assets at death, preventing or mitigating financial exploitation, and budgeting for medical expenses. If you have a financial advisor that you have been working with it is important that your advisor and your attorney are “on the same page” so that your legal and financial plans are coordinated effectively.

Age, dementia, and other issues can cause individuals to be more susceptible to scams or even result in a change in personality. While financial advisors used to limit their focus almost solely to investment return, most are realizing that placing alerts for unusual expenditures and regularly discussing budgeting and other matters with clients. The increased focus on these concerns provides an important service and some protection in the event of incapacity. Frequently, we meet with individuals who have only realized the extent of their cognitive decline due to issues brought up by their financial advisors such as unusual withdrawals, large expenditures, increased purchases, and other general changes in financial behavior.

A third overlooked tool is a trusted CPA. Many individuals think that their income picture in retirement is so simple, that they do not need a CPA to assist in preparing their tax return. However, having returns regularly filed with a CPA provides a quick and easy place for a substitute decision maker or executor to go in the event of incapacity or death, respectively. Furthermore, we frequently see individuals who self-file tax returns miss out on important tax benefits available to older clients, such as deductions for long term care premiums, deductions for healthcare expenses, and “catch-up” contributions to retirement savings. Sometimes we see families who fail to properly plan payments for the benefit of a medically needy family member in order to claim them as a dependent. These benefits quickly justify the cost of using a CPA experienced in income tax planning and filing.

A fourth overlooked set of tools are the multitude of services and applications that have proliferated to address coordination of banking, account, health, and other information. Most banks have created smartphone applications to manage accounts, which is a great help to any family caregiver. Mobile payment platforms for in-home care services prevents the need to trust new caregivers near cash or checkbooks, while delivering instant and direct payment for their services and keeping a clear record for tax and other reporting needs. Password applications provide a digital vault to keep your passwords so that they can be accessed by your substitute decision maker in the event of your incapacity or death (or by you, if you’ve forgotten a password). Other applications can help you (or a trusted loved one) keep track of your finances, health data, and other important information in an easily accessible location. While these services do come at an expense many of them quickly justify their costs in the security, comfort, and protection they provide.

As new products and services develop, we at Hook Law Center are constantly working to stay abreast of changes and trends. By specializing in elder law, our attorneys and staff can assist in more than coordinating your legal plan, we can help find ways for you and your family to smooth the inevitable transition that occurs during illness, incapacity, or death. If you are curious how some of these tools can be used to better serve you or your family members, please call our office to schedule an appointment to discuss your needs.

Kit KatAsk Kit Kat – Bao Bao Returning Home

Hook Law Center:  Kit Kat, what can you tell us about that adorable panda 3-year old who is currently at the Washington, DC National Zoo?

Kit Kat:  Well, sadly, Bao Bao, a female giant panda, will soon be leaving Washington, DC and returning to her home country, China. The zoo has not yet set an exact date for the trip, but they are scheduling some goodbye events before she goes. Though born in the United States on Aug. 23, 2013, she will be sent to her home country by the time she turns age 4. Bao Bao’s mother, Mei Xiang, is from China, and by agreement with the China Wildlife Conservation Association, any cub born at zoos in the United States must return to China around the time that they turn 4 years of age. Bao Bao was the first baby panda since 2005 to survive birth at the zoo and thrive. 4 years of age is when a panda is capable of breeding.

Bao Bao has been living an independent life at the zoo since March 2015. She is kept separate from her mother, Mei Xiang. This is to prepare her to lead a solitary life like she would be living, if she were in the wild. Separation usually occurs around the age of 18 months to 2 years.

Preceding Bao Bao was Tai Shan, another panda born on July 9, 2005 at the National Zoo. Tai Shan was returned to China in February 2010. Alas, for a little while, we can enjoy the company of Bei Bei, a male giant panda, born on Aug. 22, 2015. He’s only 1.5 years old now, so we still have time to watch him mature and grow to adulthood. ( Michael E. Ruane, “Bye Bye, Bao Bao,” The Washington Post, Local section, January 18, 2017)

Upcoming Seminars

Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Monday, February 6th, 2017. Filed under Newsletter.
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