This past week, the Supreme Court of Florida approved an advisory opinion that holds Medicaid planning to be the practice of law. When a non-lawyer provides advice regarding Medicaid planning for a fee, he is engaging in the unauthorized practice of law. This opinion is of great interest to me, because along with other New Jersey lawyers, I am currently attempting to get a similar advisory opinion approved in New Jersey.
Medicaid is a health insurance program for needy individuals. The rules governing the Medicaid program are extremely complex. There are federal and state statutes, federal and state regulations, federal and state court cases, and a myriad of other rules affecting the Medicaid program.
Medicaid eligibility is only available to individuals who have limited assets and income. Many people seek to preserve a portion of their estate through proper planning. This planning is commonly known as Medicaid planning. For years, elder law attorneys have been providing clients advice on Medicaid planning.
Most every nursing home in the state of New Jersey participates in the Medicaid program. If a nursing home participates in the Medicaid program, it must accept up to 45% of its residents on the program; however, that is the minimum. A nursing home is free to have a higher percentage of its residents on Medicaid, and a great many nursing homes do have a much higher percentage of residents who receive Medicaid benefits.
While a nursing home typically receives a lower rate of compensation for its services from Medicaid than it does from a resident who is paying privately, nursing homes are assured payment from Medicaid, whereas payment from private funds is not guaranteed. Because nursing homes are confident that they will receive payment from the Medicaid program for those residents who are Medicaid beneficiaries, nursing homes are, in some ways, happy to have a resident who is a Medicaid beneficiary.
A nursing home is prohibited from treating a Medicaid beneficiary differently than a resident who is paying privately. From a practical standpoint, nursing homes do not treat Medicaid beneficiaries differently.
In the past five years or so, a number of non-attorneys have opened business through which they advise people on how to qualify for Medicaid and assist these individuals with applying for Medicaid. The relationship between these companies and the owners of the nursing homes is a matter of curious concern.
There have been several instances in which nursing home owners insist that a family use a non-attorney Medicaid advisor to apply for Medicaid. The level of insistence, in many instances, has gone far beyond that of an ordinary referral to another business.
Once the family retains the non-attorney Medicaid advisor, the advice they receive is, in many cases, anything but good. I have personally seen numerous instances in which families were not told to do simple things that would have achieved Medicaid eligibility for their family member, such as purchase a prepaid funeral, make a home improvement, purchase a car, purchase a Medicaid-complaint annuity, or transfer assets to a disabled child or family member.
Adding insult to injury, the nursing home, which referred the family to the non-attorney Medicaid advisor, then turns around and sues the family when the nursing home resident doesn’t begin receiving Medicaid benefits when needed.
What the Supreme Court of Florida said is, providing legal advice is the practice of law and when a non-attorney Medicaid advisor provides legal advice for a fee, he is engaging in the unauthorized practice of law. The unauthorized practice of law is a crime. If we can get such an opinion adopted in New Jersey, the public will find a greater level of protection from these individuals who have no place providing legal advice for a fee.
Medicaid rules are complex and often misunderstood. Relying on qualified guidance can help prevent errors that are difficult and expensive to correct.