Over, Under or Inconclusive? Using Filial and Family Support Laws to Combat Elder Exploitation

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1 Over, Under or Inconclusive? Using Filial and Family Support Laws to Combat Elder Exploitation Katherine C. Pearson Professor of Law Penn State University Dickinson School of Law Katherine C. Pearson All rights reserved by author. Contact:

2 Families Face Increased Personal Liability for Costs of LTC LTC providers are using contract terms to maximize family financial responsibility States are tightening eligibility for Medicaid thus penalizing intra-family transfers of assets In Pennsylvania, unpaid care facilities are bringing collection suits: On Filial or Family Support Laws against adult children or spouses Why?...

3 Elderly widow sued by nursing home for unpaid bills incurred by husband prior to death Widow had made timely application for Medicaid granted After death, NH claimed additional bills were for necessities under state domestic relations law, making spouse liable Gap left by Medicaid? Example # 1

4 Example # 2 Federal Medicare/Medicaid law prohibits qualified facilities from requiring third-party guarantees of payment Third-party signers (usually family) nonetheless may be held liable on contract Sunrise Healthcare Corp v. Azarigian,, 821 A.2d 835 (Conn. App. Ct. 2003) holding daughter liable for mother s s care costs, where mother ineligible for Medicaid. Daughter (as agent) had signed contract promising to use residence s s resources to pay for care.

5 Example # 3 Pennsylvania s s domestic relations code, 23 Pa.C.S.A. 4603, as amended in 2005 provides for filial support obligations.... The following individuals have the responsibility to care for and maintain or financially assist an indigent person...: (1) The spouse of indigent person (2) The child of the indigent person (3) The parent of the indigent person

6 Penn s s Law: Are There Statutory Defenses? If an individual does not have sufficient financial ability to support the indigent person. A A child shall not be liable for the support of a parent who abandoned the child... if persisted in abandonment for period of 10 years during child s s minority.

7 Penn s s Law: Who Can Petition for Filial Support? An indigent person Any other person or public body or public agency having any interest in the care, maintenance or assistance of such indigent person. What does this mean? Health care providers and facilities can sue Note: there is no priority among family members sued as defendants

8 Penn s s Law: Scope of Filial Liability? The amount of liability shall be set by the court in the judicial district in which the indigent person resides.... BUT, for medical assistance for the aged other than public nursing home care, the following applies: Liability during any 12 month period shall be the lesser of 6 times the excess of liable person s s average monthly income over reasonable expenses, or The cost of the medical assistance for the aged.

9 Penn s s Enforcement of Filial Support? Most recent published opinion: Presbyterian Medical Center v. Budd,, 832 A.2d 1066 (Pa. Super. Ct. 2003), finding daughter who held Power of Attorney not liable under contract theories, but daughter was subject to liability under filial support law for two years of care at nursing home prior to aged mother s s death

10 Is Pennsylvania s s Law Unique? No! Thirty +/- states have some form of filial support laws Oregon s s Law at O.R.S : Parents are bound to maintain their children who are poor and unable to work themselves; and children are bound to maintain their parents in like circumstances. Matter of Hines Estate,, 573 P.2d 1260 (Or. App. 1978) (distinguishing dependency ) Belknap v. Whitmire,, 72 P. 589 (1903) (statute or implied contract? Adult child held liable to provider for costs of medical care and medicines for mother.)

11 Reasons for in Family Liability Trends? High cost of health care and long term care & impact on state and federal budgets Long Term Care industry s s growth Perception that money is being shifted hidden stolen not being used for LTC?

12 Mrs. B Azarigian Budd Trout Hershey Re-examining examining Cases Understanding the victim s fears that can lead to exploitation

13 Oregon Ahead of the curve in fight against exploitation? Oregon law: O.R.S re: Abuse of the Elderly, Disabled or Incapacitated Person Provides private right of action for vulnerable person against any person who wrongfully takes or appropriates money or property or who wrongfully holds such money or property Distinguishes between wrongful actions and transfers that affect Medicaid eligibility Potential coordination of civil and (quasi) criminal relief: O.R.S giving Attorney General authority for intervention, investigation, contempt penalties

14 Yellow Flags for Potential Abuse? Those seen by Case Managers: Older adult without a usual circle of family and friends Older adult feels threatened by prospect of nursing home The new boyfriend or girlfriend... Those seen by Banks: Large cash withdrawals by older adult (or other odd transactions) Joint bank accounts with only older depositor Those seen by Prosecutors: Nieces (grandchildren neighbors neighbors ) ) with no experience at LTC Caregivers (or spouses) with criminal background? Those seen by Private Attorneys: The prospective caregiver waiting in lobby Adult s s usual attorneys not used for planning documents Those seen by my Clinic: Attorneys who don t t take time

15 Strategies for Fighting Exploitation Coordination between public authorities and private entities Streamlined laws permitting coordinated civil and criminal remedies Alternatives for older adults: Power of attorney services by ins/bonded agents Money Management for reasonable fees Public fiduciaries... (Oregon s s Multnomah Co.) Greater flexibility for good families with co- dependent finances A norm for payment for care within families? Exemption for family homes as an available asset for Medicaid eligibility?

16 Do We Need Nationally Effective Strategy To Tackle Exploitation? Elder Justice Act, first introduced in Congress in 2004, current version co-sponsored by Senators Orrin Hatch (R-Utah) & Blanche Lincoln (D-Ark.) Policy: to ensure adequate public-private private infrastructure and to resolve to prevent, detect, treat, intervene in and prosecute elder abuse, neglect and exploitation Goal: dedicated funding stream Support: : Elder Justice Coalition at

17 Mandated Family Liability? Few families plan for long-term care liability. Recent cases demonstrate significance of selfhelp attempts to shift assets often done without proper (legal) advice. Cases demonstrate courts lack tolerance for manipulative (needy?) children/family members. Potential for increase in divorces to divide finances? Potential for greater abuse of elders or child? Public advocacy needed if this is trend: to change moral obligation into recognized (realistic) legal obligation or to set appropriate limits on filial responsibility

18 Readings J. Breaux, O. Hatch, Confronting Elder Exploitation: Exploitation: The Need for Elder Justice Legislation, 11 Elder L. J. 207 (2003). Farley, M., When I I Do Becomes I I Don t :: Eliminating the Divorce Loophole to Medicaid Eligibility, 9 Elder L. J. 27 (2001). Klein, T., A A Rational Role for Filial Responsibility Laws in Modern Society? 26 Fam. L. Q. 195 (1992). Kohn, N., Elder Empowerment as a Strategy for Curbing Abuses, 59 Rutgers L. Rev. 1 (Fall 2006). Pearson, K. C., Finances, Families and Filial Laws: The Real World as Classroom, National Council of Family Relations Report, 51:4 (Dec. 2006). Pearson, K. C., C Re-Thinking Filial Support Laws in a Time of Medicaid Cutbacks Effect of Pennsylvania s Recodification of Colonial-Era Poor Laws, 76 Pa. B. Quarterly 162 (Family Law Symposium Issue, October 2005). Pearson, K. C., The Lawyer s s Ethical Considerations in Medicaid Planning for the Elderly: Representing Smith and Jones, 76 Pa. Bar Q. 1 (Ethics Symposium Issue, January 2005). Pearson, K. C., The Responsible Thing to Do About Responsible Party Provisions in Nursing Home Agreements: A Proposal for Change on Three Fronts, 37 Univ. of Michigan Journal of Law Reform 757 (Spring 2004).