Month: April 2015

Using Aid and Attendance to Pay for Assisted Living

Using Aid and Attendance to Pay for Assisted Living

Filing a claim can be time-consuming and complicated. It’s important to get help.
Applications for Pension that involve a rating, evidence of prospective, recurring medical expenses, appointments for VA powers of attorney and fiduciaries, and an understanding of the actual application process should not be attempted without prior knowledge. We recommend you purchase our book to avoid lengthy delays in a decision or possible denials of the claim. Not only does the book help you understand how to shorten the decision process from VA and ensure a successful claim but the support forms we provide also help you present medical evidence and costs in a format familiar to VA service representatives. Applications that also involve reallocation of assets in order to qualify should not be attempted without the help of a qualified veterans aid and attendance benefit consultant.  

Annualizing Costs of Assisted living, Residential Care, Adult Day Care or Other Similar Arrangements
These facilities are not categorized by VA as nursing homes. As such, annualization of costs and a rating are not automatic. If the beneficiary is not rated, the service representative will only allow recurring unreimbursed medical expenses for specific medical care provided by licensed health professionals. Costs for room and board or custodial care cannot be applied.

For information on ratings please go to the article entitled “Who is eligible for the aid and attendance Pension benefit?”

On the other hand, if a beneficiary residing in one of these living arrangements has been rated a need for “aid and attendance” or “housebound”, VA will allow all reasonable costs to be counted as prospective, annualized medical expenses as long as some of those costs are paid for medical care. The providers do not have to be licensed. In the case of Alzheimer’s, the physician’s statement used for rating must indicate the person needing care must be in a protective environment; otherwise, only medical costs are covered. Applying for a rating is discussed in a previous section above. All reasonable costs would include room and board as well as other unreimbursed billable services.

For an explanation of the special annualized treatment of unreimbursed long term care costs and insurance premiums please go to the article entitled “Understanding the special case of long term care medical costs.”

The director of the facility must sign a statement verifying the type of care being given and the fact that the person receiving the care is expected to remain a resident in the facility. We have included in our book, a copy of a form entitled “Form 2 — Care Provider Report (used to provide evidence of recurring medical expenses)” We highly recommend this form or a similar form be submitted with the application. A copy of the contract for services as well as invoices and statements from the facility should also be included with Form 2.

There may be a possibility of a non-veteran spouse of a living veteran receiving annualized credit for recurring costs of non-nursing home facility care. Requesting annualization for the spouse may be a problem because the amount of allowable costs without a rating for “aid and attendance” or “housebound” could be much smaller or disallowed. We recommend checking the box on the application for a rating. This will probably confuse the service representative but may alert that person to the request of the spouse’s expenses. We also recommend submitting a letter with the application requesting recurring, annualized treatment of the cost of the care facility and assuring VA the spouse does deserve a rating. Otherwise, the spouse’s cost of assisted living may not be allowed as a deduction.

VA will not allow a Pension rating for a non-veteran spouse of a living veteran, but the point is to try and convince the service representative that the total cost of room and board should be annualized as if there were a rating. All of the corroborating evidence such as medical reports, statements, verification reports by directors of the facilities, and contracts should be submitted in the same manner as if applying for these benefits for the veteran. We cannot assure any applicant that this request will be granted, but it is worth a try. We recommend you contact a qualified aid and attendance benefit consultant to help you with this special case scenario of a non-veteran spouse.

Of course, a death claim is different because the surviving spouse can receive a rating in that case. If VA allows annualization of facility costs for a spouse of a living veteran, there will be no Pension allowance for aid and attendance or housebound, and the Pension award will be much smaller.

Article courtesy of Tom Day

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When the Family Should Use an Aid and Attendance Benefit Consultant

Paying a Fee for Help with Filing a Claim
Federal code and VA regulations prohibit an anyone from charging a fee to fill out an application prior to filing a notice of disagreement. Some practitioners or providers help their clients for free, sometimes in the context of solving other retirement issues or providing long term care services. Some practitioners may offer information for a fee but will send their clients to a veterans’ service organization to complete the application. Charging a fee for information is an acceptable practice allowed by VA. Charging a fee to prepare, present, and prosecute a claim is a punishable offense.

We believe it is critical for the advisor or the consultant to offer advice and constructive help prior to the filing of an application or even during the claims process in order to help increase the chance of a successful award. We feel this might include

  • educating clients on what information is required,
  • recommending supportive forms or documents that might be effective in the claims process,
  • providing guidance on VA’s asset test, making sure the client understands that evidence for recurring medical costs and for a rating is presented in the most favorable manner,
  • providing advice on dovetailing VA benefits with Medicaid, and
  • providing advice on the steps necessary to complete the application without giving specific instruction on what goes in each block or helping in any way with gathering information for the claims process.

Knowing how to submit a successful claim is 95% of the battle and filling out the form is a formality.

The actual process of obtaining documents and filling out forms should be done, free of charge, by the client, family members, a duly appointed power of attorney or a veterans service organization such as a state department of veteran affairs or local VFW. We have not had favorable reports from people who use a VA regional office for help with filing a claim.

Home care agencies, nursing homes and assisted living facilities that pay a specialist to file a claim on behalf of one of their residents or clients are in violation of the third-party fee provisions allowed by VA. This is an obvious intent to circumvent the regulation.

VA does allow disinterested third party organizations to pay someone to file an application on behalf of the veteran–based on 38 C.F.R. § 20.609(d) (1992). This regulation, addressing disinterested third-party fee payers, provides that “[a]n attorney-at-law or agent may receive a fee or salary from an organization, governmental entity, or other disinterested third party for representation of a claimant or appellant even though the conditions set forth in paragraph (c) (38 USC section 5904) [regarding fees for services after a final decision by the DVA] have not been met.”

VA amended its rules pertaining to this regulation on May 23, 2002. The following rules now apply:

  • First, it prohibits an attorney or agent from charging a fee contingent, in whole or in part, upon whether the matter is resolved favorably to the claimant or appellant.
  • Second, it establishes a rebuttable presumption that the spouse, child, or parent of the claimant, or a person residing with the claimant, is not a disinterested third party.
  • Third, it requires that all agreements for payment by a third party be in writing, be filed with the Board, and include a certification by the attorney or agent that “no agreement, oral or otherwise, exists under which the claimant or appellant will provide anything of value to the third-party payer . . . in return for payment of [the attorney’s] fee or salary, including, but not limited to, reimbursement of any fees paid.” 38 C.F.R. § 20.609(d)(2); 67 Fed. Reg. at 36,104. (See enclosed addendum court decision for more detail.)

Situations Where a Consultant Should Be Used for Advice in Filing a Claim

Below are six situations where using a consultant, who understands the claims process for Pension, can be of great help or in some situations a necessity. There are undoubtedly more situations that may exist and as reports come in from consultants, we will add them to this list. We have described, with each situation below, the reason for needing a consultant as opposed to using our book or trying to do it on your own.

Using a Consultant Where Complexity or Time Constraints Justify Paying Someone for Advice
Attempting to gather up the necessary forms and researching what information is necessary for a successful claim can be a daunting task. This is especially true for busy family members who are employed full time and are trying to help a loved one obtain a VA benefit.

Busy care providers might find it easier to pay for information for filling out and presenting a claim. Many advisers will refer their clients to a capable veterans service organization that will file the claim for free.

Using a Consultant When Submitting Claims Applications for Nursing Homes
We discussed in a previous section that a Pension claim for a potential beneficiary in a nursing home is a straightforward task that by itself, would not require the help of a consultant. Unfortunately, the pension benefit is usually not sufficient to cover the difference between the beneficiary’s income and the cost of the nursing home. In many cases, the veteran or the surviving spouse in the nursing home is forced to apply for Medicaid.

Dovetailing Medicaid income with the Pension benefit could work in some cases but in other cases Medicaid and Pension don’t mix. In those cases where it fits, Pension can be a valuable additional resource for a nursing home patient. When trying to make Medicaid and Pension work together, a potential claimant should always seek out the advice of a knowledgeable consultant. Certain legal strategies relating to Medicaid eligibility could be applied in these special cases. Advisers, who understand Medicaid rules and VA eligibility, might be able to apply some of these strategies to produce more household income.

Using a Consultant with Applications Where a Single Claimant Will Be Abandoning the Principal Residence
When a single veteran or a single surviving spouse of a veteran leaves his or her principal residence to live in assisted living or in a nursing home, there could be a potential conflict with a Pension benefit award. VA will not count the principal residence against eligibility for Pension income even if it is not being occupied by the veteran or spouse.

On the other hand, the family or the beneficiary may wish to rent out the house or sell it. These activities must be reported to VA and could affect the amount of the Pension income or even disqualify the Pension income.

In these situations it is better to get the ownership of the home out of the name of the single veteran or spouse. There is no penalty from VA to do this but gifting the property will create a five-year look back penalty for Medicaid. If the VA recipient needs to apply for Medicaid within five years of making the gift, Medicaid will refuse to pay for long term care for a certain period of time based on the value of the gift.

A consultant should always be sought out in these cases as there are strategies that can be used to avoid the Medicaid penalty or make it less severe.

Using a Consultant with Applications Where Assets Are Gifted or Converted to Income to Qualify for Pension
VA does allow potential applicants to give away assets or convert those assets to income to remove the asset test that would block a Pension award. There are strategies that can be used to retain income from gifted assets and still have those assets out of the name of the veteran household.

There are also income strategies that must be utilized in case the Pension beneficiary will apply for Medicaid. Finally, all pension applicants must be certain that asset transfers that occur within the five-year look back period for Medicaid, don’t disqualify the Pension beneficiary for Medicaid benefits. When assets are to be gifted or converted to income, a knowledgeable consultant should always be used. Failure to do so could result in dire consequences.

Using a Consultant with Applications That Require Estate and Tax Planning
Gifting of assets many cause tax problems for unwary benefactors. This might include loss of the step-up in value for real estate or conversion of capital gains to ordinary income. Also, outright transfers to members of the family may not be a good idea in certain situations. Charitable gifting should also be considered as a way to create income tax credits and reduce costly capital gains taxes on appreciated real estate.

Tax planning and orderly distribution of assets should be part of the gifting process. This usually requires specific legal documents in order to achieve the desired outcomes. For those contemplating gifting to qualify for pension, a qualified consultant should always be retained.

Using a Consultant with Applications That Involve Business Ownership, Farms, Business and Investment Property and Assets That Are Difficult to Turn into Cash
Disposition of these types of assets is always more difficult than transferring a more liquid estate. It is an absolute necessity for business owners, farmers and those with substantial real estate holdings to consult with someone who can provide reliable advice on transferring these assets to family members, partners or other interested parties. In some cases, non-liquid assets can be retained and still not disqualify for a Pension income. Tax considerations are always paramount with gifting these types of properties.

Courtesy of: Tom Day

http://veteransinfocenter.org/index.html

Using Aid and Attendance for Professional Home Care Services

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Let us help you get your Pension benefit at NO COST TO YOU OR YOUR FAMILY!

Filing a claim can be time-consuming and complicated. It’s important to get help. 

Applications for Pension that involve a rating, evidence of prospective, recurring medical expenses, appointments for VA powers of attorney and fiduciaries, and an understanding of the actual application process should not be attempted without prior knowledge. We recommend you purchase our book to avoid lengthy delays in a decision or possible denials of the claim. Not only does the book help you understand how to shorten the decision process from VA and ensure a successful claim but the support forms we provide also help you present medical evidence and costs in a format familiar to VA service representatives. Applications that also involve reallocation of assets in order to qualify should not be attempted without the help of a qualified veterans aid and attendance benefit consultant.  

Annualization of Home Care Costs
Medical expenses for home care aides are allowed prospectively for annualization if those expenses are reasonably predictable. The evidence would also have to show that the need for care is ongoing and regular. Expenses may be allowed whether the care recipient has a rating for aid and attendance or housebound or is not rated. However, deductible payments to a non-rated beneficiary are more restrictive.

Evidence must be submitted indicating an ongoing need for the care and the level of care in order for the Veterans Service Representative to consider the medical expense as recurring and eligible to be annualized. A form such as the one we provide in our block entitled “Form 2 — Care Provider Report (used to provide evidence of recurring medical expenses)” should be used for this purpose. Also a copy of a contract between the provider and the recipient, covering at least a year, and outlining the provisions and the cost should be submitted to prove the intent of the care recipient and the provider.

For an explanation of the special annualized treatment of unreimbursed long term care costs and insurance premiums please go to the article entitled “Understanding the special case of long term care medical costs.”

The non-veteran spouse of a living veteran may also be eligible for annualization of home health aide costs. If the home care is being furnished by a licensed health professional, then not much further proof is necessary other than the documentation proving the care is being provided. If the provider is not licensed, we are not sure much could be done to allow deduction for anything other than direct medical services. As outlined below, payments to nonlicensed providers are only allowed if the care recipient has a rating for “aid and attendance” or “housebound.” Unfortunately, a non-veteran spouse of a living veteran cannot receive a rating and therefore would not be eligible for annualization of costs.

Our readers could try the suggested approach outlined for assisted living and other similar facilities in order to request annualization and deduction for non-rated beneficiaries, but there is no assurance VA would allow the deductions. The idea is to try to convince the service representative the spouse should have a rating even though officially none is allowed.

VA will not rate a non-veteran spouse of a living veteran for “aid and attendance” or “housebound” and even though the spouse’s home care medical expenses may be annualized to produce a benefit, the Pension award will be much smaller without the allowance for a rating. Of course, a death claim is different because the surviving spouse can receive a rating in that case.

For information on ratings please go to the article entitled “Who is eligible for the aid and attendance Pension benefit?”

Home Care Recipient Is Not Rated
Payments for care at home for a recipient who is not rated for housebound, or aid and attendance are only allowed for annualization if made to a licensed health professional. The term “licensed health professional” refers to an individual licensed to furnish health services by the state in which the services are provided. The term includes registered nurses, licensed vocational nurses and licensed practical nurses. Some states also license non-medical home care providers to provide services as well. Since this is a fairly new practice, we don’t know if these people would qualify under the definition above but we suspect they will.

All reasonable fees paid to the licensed health professional for personal care of the disabled person and maintenance of the disabled person’s immediate environment may be allowed. This includes such services as cooking for the disabled person and housecleaning for the disabled person. It is not necessary to distinguish between “medical” and “nonmedical” services. However, services which are beyond the scope of personal care of the disabled person and maintenance of the disabled person’s immediate environment may not be allowed.

Services beyond the scope might be services such as driving the veteran’s spouse to appointments, paying bills, answering the phone, providing shopping errands for the household, and so on. If an hourly rate is being paid to the home care provider, a portion of this rate may be disallowed for services beyond the scope of personal care.

Care Recipient Is Rated for “Aid and Attendance” or “Housebound”
If the disabled care recipient has been rated “housebound” or in need of “aid and attendance” by VA, all fees paid to an in-home attendant will be allowed as long as the attendant provides some medical or nursing services for the disabled person. The attendant does not have to be a licensed health professional.

All reasonable fees paid to the individual for personal care of the disabled person and maintenance of the disabled person’s immediate environment may be allowed. This includes such services as cooking for the disabled person and housecleaning for the disabled person. It is not necessary to distinguish between “medical” and “nonmedical” services. However, as with an unrated beneficiary, services which are beyond the scope of personal care of the disabled person and maintenance of the disabled person’s immediate environment may not be allowed.

For a disabled person who has been rated, a family member may be considered an in-home attendant, but that family member has to be paid for services duly rendered. There is potential for fraud here where a family member may move into the home and ostensibly receive payment as a caregiver but not actually provide the level of care paid for. Documentation for this care must be provided to VA, and it is reasonable for VA to question whether the services being purchased from someone living in the household are legitimate.

Whether this type of care is eligible for annualization is also questionable. The family member who is living in the home can certainly request consideration of this care as a recurring monthly cost, but our guess is, if VA allows it, the relationship will be scrutinized very carefully month-to-month.

We suspect the service representative is more likely to grant a request for annualization for a family member who is not living in the home. In either case, evidence must be submitted that this care will be required month-to-month and that the cost and the amount of care will remain fairly constant. Otherwise prospective annualization of the expenses is unlikely. We also suggest drawing up a contract between the family member and the person receiving the care and a copy of this furnished to VAalong with actual evidence of payment.

Documentation of Home Care Expenses
If the fees for an in-home attendant are an allowable expense, receipts or other documentation of this expense are required. Documentation includes any of the following:

1. a receipt bill
2. statement on the provider’s letterhead
3. computer summary
4. ledger, or
5. bank statement.

The evidence submitted must include:

1. the amount paid
2. the date payment was made
3. the purpose of the payment (the nature of the product or service provided)
4. the name of the person to or for whom the product or service was provided
5. identification of the provider to whom payment was made.

Courtesy of Tom Day- NCPC