Elder Law Review from New York

Deanna W. v. Rosenblut-Appellate Case Creates Receivable Shortfall for Nursing Home

Nursing homes often have residents who have been deemed incapacitated through Article 81 guardianship proceedings. As part of the proceedings, the judge typically orders that the payment of certain costs/fees be set aside from the incapacitated person’s funds. The “guardian” of the incapacitated is generally compensated from the assets of the incapacitated person (IP), unless the guardian has failed to satisfactorily discharge his/her duties. When the IP is eligible for Medicaid, courts have compensated the guardian at a fixed monthly fee to be paid from the incapacitated person’s income and ordered that the fee be counted as part of the Medicaid “spend down” as necessary for the IP’s medical and physical health.

Because these fees have normally exceeded the IP’s monthly income, the guardian would get paid over a period of time. For an institutionalized person, this would result in “zero NAMI” (net available monthly income) language being included in the Medicaid budget. In other words, the IP’s pension and/or Social Security would not be budgeted as available to pay for monthly nursing home care because it was being used to compensate the guardian for his/her fees. As such, Medicaid’s payment to the provider would increase.

The practice described above was called into question by the Court in Deanna W. v. Rosenblut, a Second Department Appellate Division Case, decided on September 2, 2010. The Court held that Nassau County Department of Social Services was not required to count the guardian’s fees as part of the “spend down” in calculating the incapacitated person’s eligibility for Medicaid.
In the Deanna W. case, the IP wanted the Department of Social Services to disregard from net available monthly income (NAMI) expenses that accrued as a result of the guardianship. However, the Court stated that the regulations regarding NAMI calculation do not include a provision for disregarding such expenses. The Court ultimately decided that the lower court was incorrect in directing the Department to disregard the IP’s guardianship expenses when calculating NAMI.

The decision that the monthly income must be applied toward the IP’s care is an arguable one because it violates federal law (42 U.S.C.A. §407(a)), which is the anti-alienation provision regarding Social Security payments. Anti-alienation provisions essentially state that no legal process can be exercised to force applying that type of income toward the cost of care. Under the federal anti-alienation provisions these sources of income are protected against “execution, levy, attachment, or similar proceeding.” However, there is a conflict between these federal laws and Medicaid’s interpretation of New York State regulations regarding countable income.

For now, the conflict remains unresolved. In the interim, legal guardians of Medicaid recipients are finding that there is no provision allowing for their fees to be paid. If they are paid, there is insufficient income to pay the nursing home. If this issue is not resolved and the source of fee payments is not clearly delineated, individuals will be reluctant to serve as guardians.
The New York State Bar Supports the Uniform Adult Guardianship Act -Uniform Act Legislation Introduced By Senator Hannon.

Attorney Ron Fatoullah has been the driving force in seeking support from the New York State Bar Association for the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act (“UAGPPJA”). We are happy to report that the NYS Bar Association has now unanimously voted to support the UAGPPJA! Therefore, this is currently a legislative priority for the NYS Bar Association and the Bar will use its lobbying efforts to promote the UAGPPJA.

On the heels of the Bar’s support, last week, Senator Kemp Hannon introduced the UAGPPJA in the NYS Senate as Bill # S.7464. And NYS Assemblywoman, Helene Weinstein, introduced the UAGPPJA as Bill #A.10416 in the NYS Assembly. We urge all of you to do whatever you can to support this important legislation.

The UAGPPJA helps to resolve interstate jurisdictional conflicts that arise in guardianship and protective proceedings. These cases are very common and can arise as a result of so-called “granny snatching” where Mom or Dad (who is incapacitated) is whisked away into another state by a relative or third party. These issues can also arise when Mom or Dad is merely present in another state for any reason, such as to consult with a health care specialist or to visit relatives and friends.

Most states, such as NY, provide that mere physical presence confers jurisdiction. Further, there is no full faith and credit of guardianship orders between states, which means that the orders of one state are not recognized by the other. This encourages granny snatching. The UAGPPJA will help to resolve these issues.

It is also anticipated the UAGPPJA will provide substantial savings to New York State. For example, in cases where a guardian has been appointed in another state and the incapacitated person is to be moved to New York, the UAGPPJA provides for a streamlined procedure for transferring that guardianship matter to New York. Without the UAGPPJA, a new guardianship action would have to be commenced from scratch in New York. In addition, New York State will derive considerable savings if the Act is adopted as it sets forth a clear mechanism to determine what state will have initial jurisdiction of a guardianship proceeding. Further, many of these cases are contested and it often costs hundreds of thousands of dollars to have states battle over the jurisdiction of these matters. Learn more.