Recently, companies have emerged with the purpose of assisting people (“customers”) qualify for Medicaid benefits, typically when the customer resides in a nursing home or assisted living residence.  The companies are commonly known as non-attorney Medicaid advisors (“advisor”).

If the resident of a nursing home qualifies for Medicaid benefits, Medicaid will pay for most of the costs associated with the nursing home. Since a nursing home can cost upwards of $12,000 per month, qualifying for Medicaid benefits is a big deal.

Nursing homes often refer residents to these advisors. I have seen instances in which the referral was very aggressive, for instance, the family was told that they “must use” the advisor to which the nursing home referred them.

Unlike a lawyer who is responsible to maintain client confidentiality and advocate only for the client, a non-attorney advisor is not bound by a code of ethics. Moreover, the advisor is eager to share the status of his customer’s Medicaid application with the nursing home.  In some cases, the advisor provides written monthly reports to the nursing home as to the status of his customers’ Medicaid application, sharing confidential information with the nursing home.

The Medicaid program is governed by a vast array of extremely complex laws.  The Supreme Court of New Jersey has issued an opinion in which it stated that providing advice on strategies to qualify for Medicaid is legal advice.  When a non-attorney provides such advice, he is committing a fourth-degree crime, the unauthorized practice of law.

Lawyers must go to law school and pass a bar exam for the state in which they practice.  Lawyers are governed by rules, for instance, a lawyer cannot share a client’s confidential information with another person and the lawyer must advocate for the concerns of the client.  Practicing law without a license is a criminal act.  Providing advice to nursing home residents—or their family members—as to qualifying for Medicaid benefits is the practice of law.

The federal regulations governing the Medicaid program do permit a non-attorney to assist an applicant for Medicaid benefits in applying; however, the non-attorney cannot provide any advice on how to qualify for benefits.  In other words, a non-attorney could help you complete the application and gather information for the application, such as bank statements, but the second the non-attorney provides any advice as to how to qualify for benefits—for instance, you should purchase a prepaid funeral for your wife or transfer the house to your name alone to avoid estate recovery—the non-attorney advisor is providing legal advice and committing a crime.

I have had several of my former clients come to me and tell me that a non-attorney Medicaid advisor provided legal advice to them.  A client told me that a company she hired advised her to transfer her assets to a trust for her disabled son.  Advising an applicant for Medicaid benefits on such a complex transfer is clearly the practice of law, and when a non-attorney Medicaid advisor provides that advice to a third-party, he is engaging in the unauthorized practice of law, a criminal act.

Ironically, some of these companies have the word “planning” right in the name of their company.  To me, that is deceptive since the company is touting itself as, primarily, a company that assists people with Medicaid application and the company would be committing a criminal act if it provided any planning advice to its customers.  I would think people hiring a company with the word “planning” in its name would think they were hiring the company to help them plan for Medicaid eligibility.

These companies typically charge around $6,500 to assist a client.  As an attorney, I charge less than $5,000.  And not only do I assist the client will applying for Medicaid, I often develop strategies that save the client’s family tens of thousands, even hundreds of thousands, of dollars. I can develop such a plan because I am a lawyer, and I am legally permitted to practice law.  Don’t get less for paying more.

Hire a certified elder law attorney, not someone who cannot legally providing planning advice yet has the word “planning” right in his company’s name. Hire an advocate who must keep your information confidential and your interests at the forefront, not a company that is eager to share your information with its referral source.