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COLLECTION OF RESIDENT ACCOUNTS: STRATEGIES FOR PAYMENT

Steven M. Montresor, Esq.

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Payment terms Assignment of benefits Obligation to cooperate in Medical Assistance

application process Resident’s obligation to apply for Medical

Assistance Facility right to file appeal of a hardship waiver

denial or Medical Assistance determination Costs of collection and guardianship Ability to deduct outstanding balance from resident

trust account upon death, transfer or discharge

Admission Agreements

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Stand alone agreement

When possible, have the resident’s agent sign

Facility may only require a responsible party to sign when resident lacks capacity

Mirrors the obligations in the Admission Agreement – obligation to pay from resident resources and cooperate in Medical Assistance process

Fill in all agreements completely and accurately. Failure to do so may result in contract being unenforceable.

Responsible Party Agreements

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A thorough and timely completion of a financial screening at time of admission allows you to budget private pay and anticipate when an MA application might be necessary

It can also help you assess the extent of any financial impropriety and help identify assets for execution

Follow the Medical Assistance application

Financial Screening

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Provide authorizations to obtain financial information at time of admission for resident or agent to sign

Utilize if the family becomes uncooperative

Authorization to obtain documentation and financial information from the CAO

Authorizations

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Discussions with families and responsible parties as to their obligations

Medicare co-pays, Part A coverage, and possible observation stay issues

Private pay spend down

Medical Assistance application responsibility

Responsibility with respect to resident income

Educating Residents and Families

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Decide who is responsible for what and assign responsibility for follow-up: administration, business office, social services

Prepare standardized collection letters and a standardized collection process, such as calls and letters at 30, 60 and 90 days past due

Routine review of all account receivables

Internal Procedures

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Is there a lack of responsiveness from the resident’s family?

Is the resident incapable of managing his or her affairs and has no agent?

Are there disputes and arguments among family members?

Are there addictive behaviors in the resident’s family?

Did the resident not apply for MA when expected?

Is the resident or family not providing documentation to the caseworker?

Is resident income not being turned over?

Early Identification of Problems

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Application for Medical Assistance

Application for representative payee

Application for designated payee/hold payments

Long-term care insurance/hold payments

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Self Help

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◦ Providers have an affirmative obligation to report a reasonable suspicion of financial abuse

◦ Contact AAA, APS, Ombudsman

◦ Law enforcement or district attorney

Duty to Report

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Notice requirements Discharge plan elements set forth in 42 CFR

§483.12 Pennsylvania has very specific discharge

requirements set forth in Appendix N to 55 Pa. Code §1181

Alternate placement and support Effect of Medical Assistance application

Discharge Process

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File the application to preserve maximum retroactive benefit period between day 60 and day 90 of nonpayment

File even with only basic biographical information

Keep all transmittal records – tracking is best

Injunctive relief to compel performance of contractual obligations

Medical Assistance

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In two words: ALWAYS APPEAL

Preserves retroactive benefit period

If you need more time to gather documentation, then wait until later in the appeal period to file an appeal

Keep confirmation of fax transmission or mailing

Penalty: were the assets transferred for a reason exclusively other than applying for MA? Was the penalty calculated correctly?

MA Denials

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Applies when the imposition of a penalty period would deprive the resident of:◦ medical care such that the resident’s health or life

would be endangered◦ food, clothing, shelter or other necessities of life

File within 30 days of imposition of penalty period

Hardship Waiver

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The value of the asset transferred

The amount of compensation received

The date the asset was transferred in relation to the date of the MA application

Any pattern of gifting

The relationship between the transferee and the transferor

The reasons the assets cannot be returned

Special consideration given for sudden unexpected onset of serious illness or disability after the date of transfer

Hardship Waiver Factors

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Does the resident own property?

May be possible to use equity to subsidize penalty period or other nonpayment

Open-end mortgage

Maintain priority over DHS

Alternative to Litigation: Notes and Mortgages

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Is resident incapacitated?

Is there a POA?

Who will serve as guardian?

Stands in shoes of resident, controls finances and is accountable to the court

Particularly useful if there is no POA or there is misappropriation

Guardianship

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Locate estate – County of death or domicile before admission

File Notice of claim

Competing with DHS and other creditors

If no estate and there are assets, petition Register of Wills to appoint administrator

Estates

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Cost benefit analysis

Projected assets and income versus payments

Public record search

Arbitration clause?

When All Else Fails – Civil Complaint

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Breach of contract

Reasonable value for services rendered

Fraudulent transfer

Filial support

Civil Complaint

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Threshold issue – arbitration clauses

Are collections carved out? Collections below a certain dollar threshold?

The jurisdictional limit is $12,000; consider reducing balances in excess of $12,000 to save on attorney fees

District Justice Actions

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Less formal, reimbursement for court costs

File authorization along with complaint

Basic elements and evidence:◦ signed agreement◦ documentation of attempts to collect◦ invoices

Why File a District Justice Action?

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Introduce yourself and explain what the case is about

Name of resident and date of admission, and present admission agreement

Date of discharge

Explain collection efforts and provide court with statement of account

Transfer judgment to prothonotary to index as lien against possible property

A Basic District Justice Hearing

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Fair Credit Extension Uniformity Act is Pennsylvania’s analog to the federal Fair Debt Collection Practices Act and applies to creditors

Circumscribes your ability to collect an outstanding balance

Subjects a creditor to possible penalties for violations:◦ the greater of actual damages or $100 for each violation,

with a possibility of tripling damages◦ the debtor’s costs◦ the debtor’s reasonable attorney fees

Collection Compliance

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Communications with a third party to gain location information◦ must give identity but cannot state name of creditor unless

requested◦ cannot state that the consumer owes a debt◦ cannot contact more than once◦ must communicate with an attorney if you know the debtor is

represented

Communications with debtor◦ only from 8 AM to 9 PM◦ must communicate with an attorney if you know the debtor is

represented◦ cannot contact at place of employment if you have reason to

know the employer

Prohibitions

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Harassment, oppression or abusiveness◦ use of obscenity or profane language◦ calling repeatedly or continuously◦ calling without meaningful disclosure of identity

False deceptive or misleading representations or means◦ implying “color of law” or government authority◦ misstating the character, amount or legal status of the debt◦ threatening any action that you do not intend to take◦ alleging that the debtor committed a crime or fraud against the

creditor

Unfair or unconscionable means◦ collecting any amount that is not authorized by the agreement with

the debtor (i.e. interest, late fees, attorney fees and costs)

More Prohibitions

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Steven M. Montresor, Esq.Latsha David & McKenna, P.C.

1700 Bent Creek Blvd., Suite 140Mechanicsburg, PA 17050

Phone: (717) 620-2424Email: smontresor@ldylaw.com

Website: www.ldylaw.com

Conclusion and Q&A