Stark Law Terms Often Misunderstood by Physicians

October 13, 2011 by · Leave a Comment 

By Adil Daudi, Esq.

Stark-GraphWith the government beginning to scrutinize a physician’s practice now more than ever, many physicians are starting to take a proactive role in understanding certain rules that have been implemented against them.

In January of 1992, Congress imposed and substantially changed the health care industry by introducing what is commonly referred to as the Stark law. Specifically, Stark law is comprised of Sections 1877 (42 U.S.C. §1395nn, applicable to Medicare) and 1903 (42 U.S.C. §1396b, applicable to Medicaid) of the Social Security Act.

Stark law governs physician self-referral for Medicare and Medicaid patients, and prohibits physicians from referring designated health services (DHS) to Medicare or Medicaid qualified patients to an entity where the physician, or an immediate family member of the physician, has a vested financial relationship.

Despite the unambiguous definitions, many physicians/hospitals have fallen prey to this law and have found themselves in substantial legal issues. For any physician, it is imperative for them to know and understand the basics of this law and what certain definitions mean; as the understanding of the simplest terms can help avoid potential litigation.

The following are the top three (3) definitions that many physicians often misunderstand: Please note, these definitions are not exclusive, and it is always strongly advised to consult with your attorney prior to any potential referrals that may fall under this rule.

1.  Financial Relationship: An ownership or investment interest (through equity, debt or other means) in an entity; or a compensation arrangement between a physician, or immediate family member of a physician, and an entity.

2. DHS: The following are the type of services that are restricted under Stark: (i) clinical laboratory services, (ii) physical therapy, occupational therapy, and speech-language pathology services, (iii) radiology and certain other imaging services, (iv) radiation therapy services and supplies, (v) durable medical equipment and supplies, (vi) parenteral and enteral nutrients, equipment and supplies, (vii) prosthetics, orthotics, and prosthetic devices and supplies, (viii) home health services, (ix) outpatient prescription drugs, and (x) inpatient and outpatient hospital services.

3. Referral:  Generally, a referral is considered a request by a physician for, or ordering of any DHS for which payment may can be made under Medicare Part B; in addition, it is a request by a physician to perform any DHS for which payment may be made under Medicare.

Despite these general terms, Stark law is a very complex rule that many physicians fail to take the interest in understanding. A physician who violates this rule is subject to the following penalties: denial of payment; required person would be required to refund amounts collected that were billed; and civil money penalty and being excluded from Medicare, Medicaid and other possible federal programs.

The above is simply an informative piece designed to help simplify certain terms under Stark law. Please consult with your own attorney to provide you with additional information that may be more specific to your situation and needs. Although the rule was implemented more than twenty-years ago, the government has recently begun to scrutinize the application of this rule.

Adil Daudi is an Attorney at Joseph, Kroll & Yagalla, P.C., focusing primarily on Asset Protection for Physicians, Physician Contracts, Estate Planning, Business Litigation, Corporate Formations, and Family Law. He can be contacted for any questions related to this article or other areas of law at adil@josephlaw.net or (517) 381-2663.

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Understanding the Basics of Medicaid Planning

August 25, 2011 by · Leave a Comment 

By Adil Daudi, Esq.

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It has become quite evident that more and more aging Americans are beginning to rely on governmental assistance for their health care needs. In fact, Medicaid is officially the country’s largest health program when it comes to recipients – serving approximately 56 million Americans.

Although the laws of Medicaid continue to evolve each year, the planning and focus given should also adjust accordingly to ensure the recipients are keeping up-to-date. It is always important to learn the new laws in the event you have a loved who is considering being entered into a nursing home.

The following are three (3) basic questions that are often misunderstood when it comes to planning for Medicaid:

Do I have to give up all of my assets to qualify for Medicaid?

No. With careful planning, you can help increase the number of assets you are allowed to keep. Medicaid applies differently depending on the marital status of the applicant. However, in general terms, any applicant applying for Medicaid is allowed to keep the following “exempt assets”:

Vehicle

Home

Personal belongings

$2000 cash

Life insurance with total face value of $1500 or less.

Prepaid irrevocable funeral contract

Exempt asset are assets that are not countable for Medicaid eligibility purposes. Any remaining assets are considered “non-exempt” assets, and these must be “spent down” in order to become eligible for Medicaid. However, it is always advised to consult with a professional when applying for Medicaid as any experienced attorney would be able to guide you and recommend ways for you to increase your “exempt” assets.

What does it mean to “spend down” my assets?

Once you’ve determined your “exempt” assets, anything remaining is considered “non-exempt” and thus counted towards your eligibility. However, with crafty planning and proper advice, there are ways to lower your “non-exempt” assets and that is by spending down the value you carry. For example, purchasing a home, renovating your home, buying personal property, buying a new vehicle, purchasing an SBO trust (“Sole for the benefit of”) or a single premium immediate annuity. These are all permissible ways of “spending down” your countable assets.  

What does Medicaid pay for?

The average cost of a nursing home in Michigan is approximately $6500 a month. A person who enters into a nursing home Medicaid certified, the government will cover the cost of the care, less the patient-pay amount, which is based on a formula.

The formula itself begins with the Medicaid beneficiary’s monthly income that they receive from Social Security and any possible pension. In addition, the beneficiary can keep $60 for their personal needs and any money needed to pay for private health insurance.

Please note that the above information is simply a guide providing you with the basic understanding of Medicaid. It is always advised to seek professional advice when applying as you would learn how to maximize the assets you can keep and receive assistance in spending down the assets you can’t. Despite the government’s generousity in providing such assistance, it is always best to find ways to preserve your own money for your benefit.

Adil Daudi is an Attorney at Joseph, Kroll & Yagalla, P.C., focusing primarily on Asset Protection for Physicians, Physician Contracts, Estate Planning, Business Litigation, Corporate Formations, and Family Law. He can be contacted for any questions related to this article or other areas of law at adil@josephlaw.net or (517) 381-2663.

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Special Amenities Trust: Preserve Governmental Benefits and Protect Your Inheritance

August 11, 2011 by · Leave a Comment 

By: Adil Daudi, Esq.

In the unfortunate situation of having a child with a certain disability, the stress on the parents can be overwhelming. Families in such situations face unique challenges when it comes to planning for their estate planning; as not only are they concerned about their child receiving their inheritance, but they carry the additional concern of not knowing whether their child will continue to receive their governmental benefits (Social Security Disability, Medicaid, or Supplementary Security Income).

It is imperative for any parent who has a disabled or mentally ill child to be proactive by developing a sound estate plan that takes these needs into consideration and helps ensure that their child’s inheritance will not interfere with their government benefits. One way of handling such a situation is through the use of a Special Amenities Trust (SAT). An SAT is a specific trust created to ensure that beneficiaries who are on governmental assistance can continue to receive their inheritance without losing their governmental benefits.

How Does a Special Amenities Trust Work?

There is one primary rule when it comes to a SAT: the trust funds in the trust can’t be used for food, clothing or shelter for the beneficiary. In other words, the Trustee of the trust can pay for anything the beneficiary would want for personal purposes, as long as it is not in the category of food, clothing or shelter. The rationale behind this restriction is that the funds received from the government should suffice for the beneficiary’s ability to provide food, clothing and shelter. Outside of this restriction, the trust is able to purchase any other item it deems necessary, or even luxurious. If the beneficiary wishes to go on a vacation, the trust funds could be used to cover the entire trip.

Who Manages the Trust?

One thing to note when setting such a trust is that it is deemed irrevocable. That means that once it is created, it cannot be changed, altered or amended.  If done properly, this irrevocability is not an issue because this type of trust has proven to effectively assist families and protect their beneficiary’s interests.

As part of the creating process, the individual who manages the trust would be a Trustee. The Trustee’s sole responsibility is to ensure that the funds in the trust are being distributed to your beneficiary as they request it (as long as the request is not for one of the above-listed limitations).

The Trustee, who should be a trusted family member or friend, carries absolute discretion over the distributions to the beneficiary. Prior to any funds being withdrawn, the beneficiary must seek the permission from the Trustee who would make sure that the funds would be used for the proper purpose. However, this does not limit the beneficiary from receiving their funds, it simply ensures the trust is being maintained for its primary purpose. It is very common for the beneficiary to ask the Trustee for certain items they wish to purchase, and any purchases made should be paid directly from the trust. It is important for the Trustee to make sure that the beneficiary does not have any direct access to the funds, as that would negate the purpose of the trust and possibly have the government stop their aid.

If you have a special needs child receiving governmental benefits, then there is no better planning you can do than by obtaining a Special Amenities Trust. Knowing that your child’s inheritance can impact their ability to receive public assistance is enough to take a proactive approach and build an estate plan that is carefully tailored and monitored to meet your needs and objectives that goes beyond the mere avoidance of probate and tax minimization. Be sure to speak to your local Attorney to learn the many advantages of setting up such a trust.

Every parent intends to support their child well after they have passed. Take the time and sit down with an attorney to better develop your estate plan and guarantee your child continues to receive care throughout their lifetime without having their government assistance disqualified.

Adil Daudi is an Attorney at Joseph, Kroll & Yagalla, P.C., focusing primarily on Asset Protection for Physicians, Physician Contracts, Estate Planning, Business Litigation, Corporate Formations, and Family Law. He can be contacted for any questions related to this article or other areas of law at adil@josephlaw.net or (517) 381-2663.

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Houstonian Corner (V12-I10)

March 4, 2010 by · Leave a Comment 

PARENTS: Get Your Children Health Insurance On March 12th At Shifa Clinic

“Houston Shifa Foundation (HSF) established a partnership with the Children’s Defense Fund (CDF) some twelve months ago, when HSF was offered training by Ms. Kelli Jackson. Because of this partnership we have managed to enroll close to 150+ families in various CHIP and Medicaid programs. This has benefited the most vulnerable members of our community, our children. Now on Friday, March 12th, 2010, 1pm.-5pm., our community parents can come to our Southwest Clinic at 10415 Synott Road, Bldg “D”, Sugar Land, Texas 77478 and get their children’s CHIP / MEDICAID Applications filled out. For eligibility, documentation requirements and more details, parents can call Mahmood Marfani at 832-660-1848 or visit www.ShifaClinicHouston.org:” This was informed at a Special Press Briefing for Community Media at HSF by Rafique Jangda, Executive Director of the Shifa Clinic.

Kelli King-Jackson, Director of Outreach for CDF-TX provided information on mission of the Children’s Defense Fund: “There are 1,584,276 (24.1%) children uninsured in Texas. Just in two of the 13 counties in the greater Houston region, Harris County has 332,093 (30.7%) children uninsured and Fort Bend has 336,030 (26.2%) children without health insurance. Our motto is that every step we take to improve the lives of children improves the lives of all of us: Today – Tomorrow – Together. Our mission is to leave no child behind without proper healthcare and our partnership with Shifa is significant, as this institution is providing excellent basic health services at a very minimal cost or for free to those vulnerable in our society, who have no other place to go. We would like to invite all the eligible parents to come on Friday, March 12th, 2010, between 1pm.-5pm., at HSF located at 10415 Synott Road, Bldg “D”, Sugar Land, Texas 77478 and get their children’s CHIP / MEDICAID Applications filled out. For eligibility, documentation requirements and more details, parents can call CDF office at 713-664-1975 or visit www.ChildrensDefense.Org

Other than the Children’s Defense Fund, HSF has established partnerships with Denver Harbor Clinic and Airline Children’s Clinic, which gives opportunity for the community living in other parts of town to avail excellent low cost (some free) health services near their home. Marisa Ponti, Marketing Director of Denver Harbor Clinic was present at the Press Conference. Denver Harbor Clinic is located at 424 Hahlo Street, Houston, Texas 77020, Phone: 713-674-3326 and Airline Children’s Clinic is situated at 5808 Airline Drive, Houston, Texas 77076, Phone: 713-695-4013.

Another good resource to visit is www.CHIPMedicAID.Org

Mayor Parker & Faith Leaders Unite to Celebrate Census Sabbath This Weekend

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Census Sabbath Press Conference by Interfaith Ministries at United Methodist Church Downtown Houston…

Community Being Encouraged To Simple Mail-In The Census 10 Questions Form by March 21st, 2010

“As members of this faith-based community and the communities in which we live and work, we have much at stake going into the 2010 Census. We pledge to dedicate sermons, provide spiritual guidance, and teachings focused on a ‘higher calling’ to make every person count.”

This was the pledge read by Mayor of Houston Annise Parker at the special press conference held to announce March 5th, 6th, & 7th, 2010 as the Census Sabbath in Houston.

Census numbers are important, as they determine the representation in the US Congress and if all Houstonians are counted, there is every possibility that this region will get a new Congressional Seat. The US Constitution requires Census to be done every ten years at the beginning of the decade and the results also provide a yardstick to allocate federal and state funds for infrastructure development, health, education, and other developmental projects at local levels.

Houston Mayor Annise Parker and Congresswoman Sheila Jackson Lee, joined by Pastor Rudy Rasmus of St. John’s United Methodist Church and President of the Islamic Society of Greater Houston Dr. Aziz Siddiqi to call on Houston’s religious community from all walks of faith to pledge their commitment to provide Census education to their congregations during Census Sabbath weekend.

“The weekend of March 5-7 celebrates Census Sabbath, a time in which faith-based institutions throughout Houston will dedicate sermons, provide spiritual guidance and teachings focused on a ‘higher calling’ to make every person count. A complete count in Houston will result in additional federal funding to help meet the growing needs of Houston’s diverse communities. We want to gain congressional seat; make sure legislative boundaries are drawn based on all the persons counted; and not lose $1,700 per person who does not get counted. It is Easy – It is Important – It is Safe.”

Mayor Parker said that funding based on the Census will help expand community centers, improve transportation and increase health care options.

Houston mail-in response rate in 2000 Census was 61%, 3 points lower than national average of 64%: So this year all Houstonians are being urged by our media outlet that they need to beat the national average this year. The moment you receive the Census Form in the mail around March 15th, 2010, simply fill out the easy 10 questions and mail them in, to fulfill your moral, national, community, and societal duty.

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