What are the realities when nursing homes engage in relationships with nonlawyer Medicaid planners and things go wrong?


The following is a simplified example:


A nonlawyer’s Medicaid planning strategies have failed for a resident of the facility. Because of incompetent Medicaid planning efforts, the elderly resident is now ineligible for Medicaid benefits and is facing discharge because she cannot pay the bill. By now the nursing home is in arrears for $60,000 in Medicaid payments.


A UPL complaint is filed by the nursing home, and the nonlawyer Medicaid planner is found to have engaged in the unlicensed practice of law.


The court finds that the planner is responsible for reimbursing the nursing home this money. The court enters a money judgment against the planner. A Final Judgement is signed by the judge, and the next step is judgement collection.


There are three basic scenarios that may happen:


  1. If the nonlawyer Medicaid planner is a solvent business, the Medicaid planner may actually pay voluntarily.
  2. If the nonlawyer Medicaid planner is a solvent business that refuses to paythe judgment, the nursing facility turns to law enforcement to step in. There are different methods that could be used to collect on a money judgment. The most basic ways include
    • Garnishment
    • Execution and levy
  3. But, as it so often happens, the nonlawyer Medicaid planner has no resources the nursing home can go after. The planner has no malpractice insurance, no available income, no assets or real estate to levy. How will the nursing home get the money it is due? The facility is going to have a very tough, if not impossible, time collecting on the judgement.


And if the planner is a fly-by-night operation with no central office or locatable base, executing the judgment becomes highly unlikely.


To make matters even worse, a nonlawyer Medicaid planner may be able to file bankruptcy and discharge the liability protecting any future assets or incomes from collections.


Everybody loses: The nursing home, the elder resident and family, the Medicaid program and by extension, the taxpayers all lose. Everyone except possibly the nonlawyer Medicaid planner who gets away with it.


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