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

CLesher@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.