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Establishing Miller Trusts

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Sweeping changes to the way Indiana administers Medicaid are expected to save the state millions of dollars, but the transition is causing headaches and putting some recipients at risk of losing benefits.

To help some of the most vulnerable Medicaid beneficiaries – nursing home residents – attorneys are offering their services pro bono to navigate through a financial maneuver that will enable the residents to continue receiving the care they need.

“The state is trying to do this in a way that doesn’t hurt Hoosiers,” said elder law attorney Keith Huffman, “but we’re switching from one complicated system to another complicated system.”

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An estimated 3,232 nursing home residents in Indiana will need to obtain a Qualified Income Trust, more commonly known as a Miller Trust, by the end of June to keep their Medicaid coverage. These individuals have personal incomes over the eligibility limit effective June 1 and must divert the excess money into the trusts in order to maintain their benefits.

Nursing home patients who do not have the trusts in place by the deadline will be removed from the Medicaid rolls and will have to reapply for the program by going through the interviews and submitting the paperwork all over again.

Indianapolis attorney Claire Lewis has been coordinating an effort on behalf of the Indiana State Bar Association to enlist lawyers to work with nursing home residents and their families to complete and file the documents that set up the Miller Trusts.

The response to the ISBA’s call for help has been wonderful, Lewis said. She is proud of the way her profession has stepped up and is especially pleased with the association’s Elder Law Section, which has been “absolutely phenomenal in responding.”

Still, her major concern is that some nursing home residents will not get the assistance they need and will lose their Medicaid benefits. She said she has been living and breathing Miller Trusts for the past couple of months and very good people at the state are working long, ridiculous hours to ensure no one slips through the cracks but, she noted, “I think transitions are always difficult.”

Stopping the spend down

As part of Indiana’s change in Medicaid administration, the state will not have to operate the spend-down program, which has been described as expensive, inefficient and a nightmare.

Individuals whose incomes are higher than roughly 75 percent of federal poverty level are currently being shifted into the spend-down program. This program functions like a monthly deductible. If a recipient does not incur enough medical expenses, Medicaid will not kick-in and pay for services that month.

With Medicaid coverage fluctuating month to month, sometimes patients have had their medical care interrupted and other times providers have had difficulty collecting payments from patients.

lewis-claire.jpg Lewis

Indiana predicts it will save $35.7 million annually starting in fiscal year 2015 by ending the spend-down program.

The transition is possible partly because of the Affordable Care Act. Prior to the federal health care exchange, low-income individuals who did not qualify for Medicare had no other option than to enroll in the spend-down program. Now, according to the state, the federal marketplace enables eligible individuals to receive “affordable comprehensive coverage” without having to spend a certain amount each month to ensure continuous coverage.

As a result of the end of the spend-down program, nursing home residents with personal monthly incomes higher than $2,163 will have to establish a Miller Trust. The amount over the limit will be essentially hidden in the trust so the person can qualify for Medicaid. Then the funds will be withdrawn and used to help pay for the nursing home costs.

“I really describe it to clients as they just got to jump through hoops,” said Dennis Frick, director of the Senior Law Project at Indiana Legal Services Inc. “It does seem silly. It’s done just because of the way the federal law is written.”

Preventing loss of benefits

The staff at TLC Management, a company that operates several nursing facilities in Indiana, decided to handle all the details of setting up the trust accounts for their residents.

“They’re sick, and they’re old, and they don’t need to deal with that,” said Alma McKibben, regional field accountant and Medicaid specialist for TLC. “We feel if we can alleviate any of the stress for our residents we’re going to do that.”

She explained some of the residents do not have family who can help them wade through the Miller Trust paperwork, and others have family but they cannot provide assistance. Many residents became worried they would lose their benefits after receiving letters from the state describing the change in how Medicaid benefits are handled.

TLC welcomed the volunteer attorneys into the process to create the trusts. McKibben said the lawyers have been “extremely helpful across the board,” and many residents are comforted by knowing an attorney is assisting them.

Huffman, an attorney at Dale Huffman & Babcock in Bluffton and chair of the ISBA Elder Law Section, is among the attorneys helping TLC residents. To date, he said his practice has completed more than 100 trusts.

However, Huffman and other attorneys say they are concerned about the backlog at the Indiana Family and Social Services Administration and they are frustrated by the resistance from some banks.

frick-dennis.jpg Frick

Paperwork is being submitted to the state, showing the trusts are set up. A pending verification may then be issued but, attorneys have noted, instead of giving approval, the state has come back and asked for information already provided in some cases.

The lag by the state is raising fears that nursing home residents will have their benefits terminated even though they turned in all the documents by the deadline.

FSSA did not provide exact numbers but said “several hundred trust documents” have been received and are at various stages of the approval process. And changes are being made to expedite the approval process. The FSSA is continuing to reach out to all parties involved in setting up the trusts.

Aside from the problems at the state, attorneys are also dealing with a “great deal of confusion among the banks,” Huffman said.

Attorneys are trying to persuade the banks to not tack on fees and service charges to the Miller Trusts because those fees would come out of the resident’s monthly allowance. Some financial institutions maintain family members who have been legally designated to handle a nursing home resident’s affairs cannot sign the trust account documents because the power of attorney does not give specific authority to do so.

Some attorneys pointed to Regions Bank, in particular, as not handling Miller Trusts. The institution confirmed it does not establish these trusts but did not provide any explanation for its policy.

McKibben pushed back after one bank that TLC had been doing business with for 20 years turned down the Miller Trusts. After she demanded to know why and reiterated the trusts are needed in order to maintain eligibility, the institution relented.

With the deadline approaching, Huffman anticipates 90 percent of nursing home residents who need Miller Trusts will have established them in time. Frick is equally optimistic, saying some may have coverage terminated but, hopefully, the number will be small and the situation will be resolved quickly.•
 

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  1. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

  2. "Meanwhile small- and mid-size firms are getting squeezed and likely will not survive unless they become a boutique firm." I've been a business attorney in small, and now mid-size firm for over 30 years, and for over 30 years legal consultants have been preaching this exact same mantra of impending doom for small and mid-sized firms -- verbatim. This claim apparently helps them gin up merger opportunities from smaller firms who become convinced that they need to become larger overnight. The claim that large corporations are interested in cost-saving and efficiency has likewise been preached for decades, and is likewise bunk. If large corporations had any real interest in saving money they wouldn't use large law firms whose rates are substantially higher than those of high-quality mid-sized firms.

  3. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

  4. When I hear 'Juvenile Lawyer' I think of an attorney helping a high school aged kid through the court system for a poor decision; like smashing mailboxes. Thank you for opening up my eyes to the bigger picture of the need for juvenile attorneys. It made me sad, but also fascinated, when it was explained, in the sixth paragraph, that parents making poor decisions (such as drug abuse) can cause situations where children need legal representation and aid from a lawyer.

  5. Some in the Hoosier legal elite consider this prayer recommended by the AG seditious, not to mention the Saint who pledged loyalty to God over King and went to the axe for so doing: "Thomas More, counselor of law and statesman of integrity, merry martyr and most human of saints: Pray that, for the glory of God and in the pursuit of His justice, I may be trustworthy with confidences, keen in study, accurate in analysis, correct in conclusion, able in argument, loyal to clients, honest with all, courteous to adversaries, ever attentive to conscience. Sit with me at my desk and listen with me to my clients' tales. Read with me in my library and stand always beside me so that today I shall not, to win a point, lose my soul. Pray that my family may find in me what yours found in you: friendship and courage, cheerfulness and charity, diligence in duties, counsel in adversity, patience in pain—their good servant, and God's first. Amen."

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