Medicaid Appeals and Younger Abstention Doctrine

A Missouri ElderLawAnswers member attorney is pursuing an important Medicaid case, currently before the 8th Circuit, that will decide Medicaid applicants' right to appeal certain cases to federal district court. The case, Hudson v. Campbell, involves a nursing home resident in Missouri, Greta Hudson, who applied for Medicaid, but was rejected due to transfers made during the look-back period. Ms. Hudson appealed, and on the day before the hearing the state notified her that it was withdrawing the original denial notice and substituting a new one, albeit apparently based on a new reason. Because of the new denial decision, the hearing officer cancelled the pending hearing and advised Ms. Hudson that she needed to request a new hearing to appeal the new grounds for denial. Ms. Hudson sued in federal court, but the U.S. District Court for the Western District of Missouri dismissed her claims. The court relied on the U.S. Supreme Court's decision in Younger v. Harris, 401 U.S. 37 (1971), holding that because Ms. Hudson had not exhausted her state remedies, the federal court must abstain. Ms. Hudson appealed this ruling to the 8th Circuit. The case could have big implications for Medicaid applicants. Ms. Hudson's estate (she died while the appeal to the 8th Circuit was pending) is represented by Columbia, Missouri, ElderLawAnswers member attorney Nathan Forck (photo). According to Forck, "If the 8th Circuit rules against us, it would essentially foreclose Medicaid applicants'/beneficiaries' right to appeal procedural due process violations that occur within the context of a state fair hearing to a federal district court." Forck also noted that a negative decision in this case "would put the 8th Circuit directly at odds with the 10th Circuit's 2010 ruling in Brown ex. rel Brown v. Day on facts almost identical to the ones here. There would be a split in the circuits that would necessitate an appeal to the Supreme Court to resolve the issue at that point." Forck added that because the district court substantially modified its original order in almost every respect except for the issue of abstention, "if this case makes it back to the district court, my client should be in very good shape with respect to the court's view on her right to a remedy." For a copy of the appellant's brief to the 8th Circuit, click here. For the appellant's reply brief, click here.

Computerized Records Alone Were Insufficient to Prove Estate Recovery Claim (Mo. App.)

FROM NAELA (http://www.naela.org/):
After Joann Strayer died in 2005, the State filed an estate recovery claim in the amount of $52,931.33. The only evidence it offered in support of its claim were computerized records and a business records affidavit. The records, however, referred to "Ann Staryer." Nowhere in the records did the State identify Ann as Joann. The estate at no time stipulated to the amount owed and the State failed to offer any other evidence that its records were for the same individual. The State argued that a Social Security number on the records proved they related to the same person, but the State failed to present any evidence of what Joann Social Security Number was, so it was impossible to link up the records. When the trial court ruled that the evidence was insufficient, the State appealed. On appeal, the judgment was affirmed. The State's computerized records—without testimony as to the meaning of the data contained therein or other evidence certifying that payment was made on Strayer's behalf—did not constitute competent and substantial evidence of payment.
Declue v. State, 2011 Mo. App. LEXIS 531 (April 19, 2011)
Full case:
Wright v. State, 2011 Mo. App. LEXIS 533 (April 19, 2011)
Full case

Lump Sum Personal Care Contract Is Transfer for Less Than Fair Market Value

From www.elderlawanswers.com

A Massachusetts appeals court upholds the imposition of a transfer-of-assets penalty assessed against a Medicaid applicant who entered into a lump sum personal care contract with her daughter, determining that the contract's value cannot be ascertained. Forman v. Director of the Office of Medicaid (Mass.App.Ct., No. 10-P-728, April 6, 2011).

Janette Forman entered into a lump sum personal care agreement with her daughter, Fran Rachlin, in which Ms. Forman paid Ms. Rachlin $20,000 in exchange for Ms. Rachlin's agreeing to provide her mother with room, board, meal preparation, housekeeping and transportation. The contract allowed Ms. Rachlin to terminate the agreement and keep the entire lump sum payment if her mother engaged in behavior that was a threat to her own mental or physical health or if Ms. Forman was no longer able to assist with her own personal hygiene needs. The contract did not quantify the number of hours to be worked by Ms. Rachlin and it did not have a specific duration.
One year after signing the contract, Ms. Forman moved into a nursing home and filed a Medicaid application. The state Medicaid agency assessed a two-and-a-half-month transfer penalty based on its determination that the contract was a transfer for less than fair market value and that it was not reasonably enforceable by Ms. Forman or her estate. Ms. Forman appealed and a board of hearings and the Superior Court both upheld the state's decision.
The Massachusetts Court of Appeals upholds the imposition of the transfer penalty, ruling that the contract represented a transfer for less than fair market value. The court explains that it "cannot fairly estimate the value of the contract because it was self-contradictory, sketchy, and skewed in favor of the daughter's retention of the upfront payment regardless of the services provided. . . [i]f the daughter elected to terminate the contract . . . or if the mother died at any point in time following the execution of the contract, the daughter was entitled to retain the full $20,000 regardless of services performed to date." The court does temper its decision by pointing out that "we are not in any way suggesting that all lump-sum prepaid contracts or all contracts between family members for personal services are disqualified. Our decision is limited to those contracts in which compensation does not reflect fair market value, as was the case here." The court declines to address whether the contract was legally and reasonably enforceable.
For the full text of this decision, go to: http://www.elderlawanswers.com/Resources/ArticleAtty.asp?id=9075&Section=9&state=

Seniors List; Home Care Agency; Assisted Living; Senior Care

Seniors List; Home Care Agency; Assisted Living; Senior Care

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