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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: [email protected]
Website: www.ldylaw.com
Conclusion and Q&A
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