What is the potential for harm to the public? Nonlawyer Medicaid planners expose Florida nursing home residents to various dangers, including

  • the denial of Medicaid eligibility
  • ineligibility penalties, costing tens or hundreds of thousands of dollars, because of wrongful transfers or purchasing unfit financial products
  • exploitation of vulnerable, unsuspecting Florida citizens
  • leaving seniors and their families or caregivers open to charges of Medicaid fraud
  • severe or ruinous tax debts and obligations
  • purchasing the wrong or erroneous financial products, or having an insufficient power of attorney — threatening or destroying a person’s life savings.

An example to highlight the hidden dangers: a life’s savings, wiped out in months

Consider this scenario:

Alejandra contacted a nonlawyer Medicaid planner, Steve, who is a Florida licensed insurance agent who holds himself out as a “Medicaid Planning Specialist.”

Alejandra’s father, Armando has been a resident at an assisted living facility in Escambia County, Florida. The owner of the assisted living facility referred Alejandra to Steve. The assisted living facility can no longer meet Armando’s medical needs, and Armando must now move to a skilled nursing facility.

Armando’s gross monthly income is $4,000.00 per month, which includes his Social Security and a DFAS pension, from Armando’s prior military service in the United States Air Force. The $4,000.00 per month in income had been just enough to pay the $3,800.00 per month bill at the assisted living facility.

However, the private pay bill at the new nursing home is going to be $9,100.00 per month, and Armando has no money saved up, and he generally only has about $1,500.00 left over in his checking account each month after paying the assisted living bill.

The insurance agent Steve tells Alejandra that he has drafted durable powers of attorney and qualified income trusts for his clients in the past, and that he has successfully obtained Medicaid benefits for nursing home residents in the past. Steve advised Alejandra that Armando will need a qualified income trust to obtain Medicaid benefits, because Armando’s monthly income exceeds the $2,250 income cap.

Steve quotes a fee of $3,800.00 to draft a durable power of attorney, a qualified income trust, and submit the Medicaid application for Armando.

Steve is also a Notary Public. Steve prepares the durable power of attorney for Armando, and goes to the nursing home to visit with Armando and execute the durable power of attorney. Steve properly executes the power of attorney with two witnesses, and then sets up an appointment with Alejandra, who Armando has named as his attorney-in-fact in his newly signed durable power of attorney.

Steve then prepares a qualified income trust, and has Alejandra sign the income trust in the presence of two witnesses. Steve tells Alejandra that he has provided these exact same services for many Medicaid applicants in the past, and all of his cases have been approved.

After Armando’s Medicaid is submitted to DCF, the Medicaid application is denied. Unfortunately, Steve was not aware that Florida adopted a new power of attorney statute on October 1, 2011. Steve continued to use the same power of attorney document after October 1, 2011 that he had been providing to clients for the past few years. Under the new power of attorney statute, a “general grant of authority” is no longer effective, and in order to establish an irrevocable trust, a separate provision in the durable power document authorizing the establishment of the trust needed to be initialed or signed by Armando.

Because Steve was not aware of the new power of attorney statute and his power of attorney form was insufficient to establish the qualified income trust, DCF denied the Medicaid application. By the time the decision was issued by the DCF caseworker in Armando’s Medicaid case, three months had passed, and the unpaid bill in the nursing home exceeded $27,000.00.

Neither Armando nor Alejandra had sufficient funds available to pay for the unpaid private pay bill in the nursing home, and when the Medicaid case was denied, the nursing facility issued a discharge notice to Armando, due to his failure to pay the bill.

Excerpt From: John R. Frazier, Leonard E. Mondschein. “Protecting Nursing Homes and Their Residents from the Unlicensed Practice of Law.” iBooks.