It is very common for seniors who need help qualifying for Medicaid to accept referrals from trusted sources—such as family, friends, social workers, nursing home administrators and hospital discharge planners. The trouble is, these referrals are frequently to nonlawyer Medicaid planners.

In some cases, referrals are made without the knowledge or awareness of the nursing home resident; other times, the resident assumes they have no choice, and must use the referred planner.

Both the source (nursing facility or employee) who refers the nonlawyer for Medicaid planning purposes, and the senior resident (or their legal representative) who retains the nonlawyer, should be aware of the possible severe consequences and possible illegality of their actions—however intentional or unintentional their actions may be.

According to Florida Statute 777.011:

“Whoever commits any criminal offense … or aids, abets, counsels, hires, or otherwise procures such offense to be committed … is a principal in the first degree and may be charged, convicted, and punished as such, whether he or she is or is not actually or constructively present at the commission of such offense.”

Anyone who works closely with Florida’s seniors—and especially seniors in need of Medicaid planning—must be aware of the ramifications of referring legal work to nonlawyer Medicaid planners for those in your care.

Know how to protect yourselves and your facility from the risks of exposure to liability.

What are possible legal consequences of negligent referral?

Referring Medicaid cases to a nonlawyer Medicaid planner can lead to potential liability for the nursing home and its employees.

Example: Carmela holds valid durable power of attorney for her father Xavier, who is a resident of a skilled nursing facility in Santa Rosa County, Florida.

Instead of hiring an attorney to help Xavier qualify for Medicaid, Carmela hires a very likable insurance salesman named Tony, who is holding himself out as a Medicaid Planning Specialist.

Tony was recommended by the nursing facility to Carmela. Tony was paying the nursing home representative $200 for each client referral he received from the facility.

Tony is only somewhat familiar with Florida Medicaid rules. The legal advice he gives to Xavier and Carmella, and the legal documents he draws up, are insufficient and do not restructure Xavier’s assets correctly. Tony’s Medicaid planning for Xavier fails and the Medicaid program denies Xavier’s application.

Carmel now must find and hire an experienced Elder Law attorney to fix the damage caused by Tony. By this time, Xavier owes the nursing home $57,600 for the cost of his care for the past 7 months.

Carmela sues Tony for the $57,600 owed to the facility, but she quickly finds out that Tony has no legal malpractice insurance. Carmela also discovers there are multiple other lawsuits pending against Tony because of failed Medicaid cases, In fact, Tony has filed bankruptcy to protect himself against the pending lawsuits. Unfortunately Carmela realizes that Tony will not be able to make Carmela or her father whole.

To add to Carmela’s woes, at the time of her father’s admittance to the nursing home, she had signed an admissions document that made her personally liable for any unpaid bill at the nursing home. Carmella is personally liable for the $57,600 owed to the facility.

Carmela contacts an attorney who concentrates his practice in negligent referral lawsuits. After listening to the facts, the attorney advises Carmela to sue the nursing home under a theory of negligent referral.

A lawsuit is filed against the nursing home, and the facility decides to settle the case out of court, because the corporate owners realize that the nursing home employee was clearly negligent in referring Carmela to Tony, who was not qualified to handle the Medicaid case.

The nursing home also fired the employee, because she negligently referred Carmela to Tony, and because she accepted $200 payment from Tony as a kickback

Be on the safe side! Protect your own legal rights.

  • Do not refer elders who need asset restructuring or qualified income trusts to nonlawyer Medicaid planners. While you may assume a Medicaid advisor or planning company is legally qualified to advise residents of the nursing facility in these matters, this can be disastrous for the resident when you are wrong.
  • Do not have a contractual relationship with nonlawyer Medicaid planners, where the facility pays the planner for legal work, or gets some form of kickback or reward for referrals.
  • Make sure the nursing home resident is free to choose his or her legal advisor.
  • Refer the senior and his or her family to the Florida Bar ( where the senior may seek out a qualified elder law attorney. An experienced elder law attorney will counsel the senior and family about the full range of long-term care issues, Medicaid planning legal options to protect assets, and all possile consequences and costs relevant to the senior’s circumstances.
  • Finally, avoid drafting or executing any legal document or contract yourself for seniors or family members; do not advise the senior or family members about what forms to get or how to fill them out. 

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

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