Category Archives: Home Nursing

LAWS AND REGULATIONS SPECIFIC TO IN HOME CARE ORGANIZATIONS IN CALIFORNIA

New Emphasis on Patient Safety Will Cause Greater Scrutiny of Home Care Providers

While In Home Care Organizations (“HCOs”) have been relatively free of laws and regulation, such companies are coming under increasing scrutiny in California. There have been concerns about patient safety and security, which has caused the state to enact laws and regulations that impose safety checks and training. There are also concerns about abuse of HCO workers, causing minimums standards for companies employing such workers. While many of these reforms appear to be appropriate, they also make the utilization of in home services more expensive, which will make such services unaffordable for a large segment of the population.

HOME CARE SERVICES CONSUMER PROTECTION ACT

The most significant reform is the Home Care Services Consumer Protection Act of 2013 (AB 1217), signed into law on October 13, 2013. It covers “home care services,” which are formally defined as nonmedical services and assistance provided by a registered home care assistant (“HCA”) to a client who, because of advanced age or physical or mental disability needs assistance in activities of daily living, allowing the client to stay in their residence. Such services include assistance in the following areas:
• Dressing
• bathing
• exercising
• personal hygiene and grooming
• transferring
• ambulating
• positioning
• toileting and incontinence care
• housekeeping
• meal planning and preparation
• laundry
• transportation
• correspondence
• making telephone calls
• shopping for personal care items or groceries
• companionship

WHAT IS INCLUDED IN THE ACT?

This legislation requires agencies to: List aides in an online registry, conduct background checks on workers, obtain finger prints of all aides, provide five hours of training for new hires, and obtain a license from the state certifying their compliance with basic standards.

The commencement date of the law was extended to January 1, 2016. It provides that the California Department of Social Services (CDSS) will regulate HCOs and provide background checks of affiliated Home Care Aides (HCAs) and independent HCAs who wish to be listed on the Home Care Services (HCS) Registry. Currently CDSS is implementing regulations, including the formation of newly formed Home Care Services Bureau (HCSB)  in partnership with the Caregiver Background Check Bureau (CBCB). HCSB will oversee the licensing and oversight of the HCOs and CBCB will oversee the background checks for the HCAs and will maintain the HCS Registry.

Some of the penalties found in the Act include:
• $900 fine per day for each day if not licensed by Department of Social Services

• Potential cease and desist order, which shall remain in effect until the individual or entity has obtained a license pursuant to this chapter.

Potential imposition of a civil penalty; or

Potential civil action against the individual or entity.
If CDSS finds that an individual has been convicted of a crime other than a minor traffic violation, the individual cannot work for or be present in any community care facility unless they receive a criminal record exemption from the Community Care Licensing Division, Caregiver Background Check Bureau.

CALIFORNIA’S IHSS PROGRAM

California has established the In Home Supportive Services (IHSS)  program, which is a Medi-Cal program providing payment to providers who are serving aged and/or disabled patients who are without the means to pay for such services Persons wanting to become a IHSS provider must provide a U.S. government issued picture identification and an original Social Security card and the provider must complete the Provider Enrollment Form (SOC 426) and obtain finger prints. The California Department of Justice (DOJ) will obtain a criminal background check on the individual.

DEPARTMENT OF LABOR WAGE AND HOUR RULES

On January 1, 2015, the Domestic Worker Bill of Rights (AB 241), took effect. It regulates the number of consecutive hours for home health care workers and requires overtime pay for long work shifts.
California now is one of 16 states with some type of overtime requirement for home health workers. Personal attendants covered by this law are now entitled to overtime pay at 1.5 times their regular rate of pay for any hours worked in excess of nine (9) hours in a day or in excess of 45 hours in a week.

The new law, due to sunset in 2017, calls for formation of an evaluation committee to review and analyze the effectiveness of the overtime provision over the next three years. The California Department of Industrial Relations is charged with reviewing the law.
One of the areas the committee will monitor is whether the law prompts more underground caregiving, as Janz said is happening.
MINIMUM WAGE

Domestic workers are entitled to the minimum wage, with the exception of babysitters under the age of 18 and the employer’s parent, spouse, or child. The Labor Commissioner enforces the California minimum wage. The Labor Commissioner may enforce local minimum wage laws if the work is performed in a city and/or county that has a higher minimum wage ordinance.

If your employer discriminates or retaliates against you in any manner whatsoever (for example by terminating you or giving you fewer hours), you can file a discrimination/retaliation complaint with the Labor Commissioner’s Office. Alternatively, you can file a lawsuit against your employer in court.

ACTION ITEMS

Institute security check program with all home aides working for your organization, including back ground check and finger printing.

Obtain an exemption or terminate those home aides that fail the background check.

Institute a training program for all home aides working for your organization
Review wage and hour polices and ensure that your organization has all employee manuals with the proper overtime and minimum wage rules.

By Matt Kinley, Esq. 

PHYSICIAN OFFICE COMPLIANCE: PHYSICIANS SHOULD PREPARE

Compliance in Physician Offices

Compliance guidance for physician practices was issued by the Office of Inspector General in 2000. Since that time, many physician practices, especially more complex specialty practices, have developed some sort of compliance plan. Compliance covers many areas of a healthcare practice.

Although compliance plans have not previously been mandatory, they have become “industry standard” as a way to minimize risks associated with health care regulations such as the Health Insurance Portability and Accountability Act of 1996, the Medicare and Medicaid Fraud and Abuse Laws, Anti- kickback Statute, Civil Monetary Laws, False Claims Act, the Clinical Laboratory Improvement Act and all other state and federal statutes, regulations and directives that apply to the operation of a complex physician’s practice.

The Patient Protection and Affordable Care Act of 2010, in section 6401, requires Health and Human Services and the Office of Inspector General to promulgate regulations that require most healthcare providers and suppliers to establish compliance programs. The compliance programs are intended to be “effective in preventing and detecting criminal, civil, and administrative violations” under the Medicare and Medicaid laws and other laws that govern operations.

Under the Affordable Care Act, physicians and group practices, will be required to establish compliance programs as a condition of enrollment in the Medicare program.HHS is required to issue regulations creating a timetable and basic core compliance program requirement.

Physician groups should begin the process of establishing compliance programs as soon as possible and not wait for final regulations. Compliance programs are a good way for physician practices to reduce risk associated with fraud and abuse and other legal matters that present risk to their operations. It makes sense for physicians to begin development now to provide ample time for creation of appropriately scaled policies and input from various personnel in the group.

It will not be sufficient to adopt pre-written compliance policies. Rather, physician offices must establish a continuing system of review for their office. Practices may need to be modified based upon their specialization. The seven core elements of effective compliance programs have been released by the Office of Inspector General, including the Physician Practice Guidelines.
A compliance program requires the physician to perform a risk assessment in their organization and document the outcomes of that assessment. The risk assessment could take many forms. Compliance professionals talk about a “gap analysis” which is an approach to help determine the vulnerabilities of your organization. Areas of risk provide emphasis to appropriate areas of risk that are identified through your risk assessment.
The seven areas of emphasis include:
1. Adoption of written guidelines and policies to promote the organization’s commitment to compliance;
2. Identification and appointment of a high ranking individual within the organization to serve as compliance officer;
3. Establishment of anonymous reporting systems, preferably through multiple pathways, to encourage individuals to make complaints regarding compliance items without fear of retaliation;
4. Effective education and training programs for all levels of employees and others with close relationships to the organization;
5. Ongoing auditing systems to assess the effectiveness of the compliance program and to provide input into areas that require additional emphasis;
6. Mechanisms to enforce the requirements of the compliance program and to discipline employees for violations of the organization’s commitment to compliance; and
7. An ongoing system of program modification based upon audit, feedback and experience that can further adapt the compliance policies to the specific issues faced by the organization.

By Matt Kinley, Esq

HOME HEALTH COMPANIES ARE SUBJECT TO FEDERAL LAW, TOO

Payment for patients can land you in the federal penitentiary.

Home health care companies are facing more and more scrutiny from federal and state regulators. Such companies, particularly if they bill Medicare, are subject to all the laws, rules and regulations as are all health care providers.

In a case just reported by the Justice Department, an 64-year old owner of such a healthcare company pleaded guilty to violation of the Anti-Kickback laws for billing for services that were unnecessary and in some cases not even provided. He also paid recruiters which provided the company with patients. The owner was fined over $6.5 million, 75-months in prison and sentenced to three years supervised release. The case was investigated and brought as part of the Medicare Fraud Strike Force. However, such cases can be brought by state investigators or even by whistle blowers who are paid a percentage of recovery for reporting the health care provider, even if the whistle blower was part of the fraud.

The ramifications of even technical Medicare rules can be catastrophic a person’s life or business. Home health care companies should have competent legal representation to make sure their business plans are appropriate. Home health companies will soon be under rules that require compliance plans. Legal counsel should be engaged to help put in place an appropriate plan.

By:  Matt Kinley, Esq.  You can contact Mr. Kinley @ (562)715-5557. 

Home Healthcare: What to know about trust administration

This article was originally published on the LivHome Blog.

The Rules of Trust Administration
Top Ten Trust Administration Rules to Keep You out of Trouble
By Mark Doyle, Esq. and Monica Goel, Esq., Partners at Tredway, Lumsdaine & Doyle

People have become educated to know that estate planning is important. Without it, your life savings and estate will go through the cost and expense of probate court. With estate planning, you can do advanced tax planning to avoid the cost and expense of probate, avoid costly estate taxes, and ensure smooth transition of assets to your heirs.

Trust administration is just as important. When someone passes away, it’s imperative that the proper trust administration is done to carry out the terms of the Trust. This is demonstrated in the recent Wall Street Journal article “When Dad Amasses a Fortune.”
Now more than ever, it’s important to understand how trust administration works.  Here are 10 simple rules to follow:

1. Determine:  Who is the client?

It is extremely important to know who your client is. If you are meeting with the Successor Trustee of a Trust, meet with them alone. Do not meet with beneficiaries and give them the impression that you represent them as well or the “Trust.” You represent the Trustee of the Trust.

When a non-client believes that an attorney is their attorney, there is a risk that the non-client is now owed fiduciary duties by that attorney. If representation of the non-client presents a conflict of interests with the attorney’s current clients, then the attorney may be facing another potential ethical violation in representing conflicting interests without proper disclosure, or alternatively, the attorney is forced to withdraw from representing both clients whose interests’ conflict. Thus, it is just as important for an attorney identify to whom they owe fiduciary duties as it is for the attorney to identify to whom they do not owe such duties in order to prevent an unintended attorney/client relationship.

2. Avoid Conflicts of Interest

Be wary of known, unknown, and actual conflict of interest. You cannot represent both the Trustee and beneficiaries of the Trust. Make sure to obtain a conflict waiver if representing co-trustees. Be sure they understand that you will have to withdraw as counsel if a conflict arises between them. If you are the drafting estate planning attorney of the Trust, you cannot represent beneficiaries in their attempt to contest the Trust. Be cautious if it appears you may be a percipient witness in the matter.
An attorney has the following duties, among others, to the client he or she represents: undivided loyalty, avoiding representing adverse interests, keeping the client informed, and maintaining client confidences. Undivided loyalty and avoiding representation of conflicting interests goes hand in hand. A conflict of interest is broadly defined as a situation that interferes with a lawyer’s ability to fulfill basic duties to a client. State Bar Formal Opinion No. 1982-69.

Conflicts of interest may arise in probate and trust proceedings because of the interrelatedness of parties and the multiple roles of individual parties and beneficiaries, fiduciaries, or business associates. Consideration of potential conflicts is particularly important, because, as is common, the attorney may have represented the decedent, decedent’s spouse or family members or consulted with decedent in business transactions and these parties may have conflicting interests with regard to decedent’s estate. In trust and probate cases in particular, a conflict of interest may arise after the representation has been accepted, requiring independent counsel for the various interested persons.

3. Know the Process

We break down the trust administration process into 3 stages:
1. Notification and Marshaling Assets
2. Inventory & Appraisal
3. Allocation or Distribution

On the death of settlor/trustee, Probate Code Section 16061.7 requires that the Successor Trustee send out a notification to all heirs at law regarding their rights to obtain copies of the Trust documents and contest them. The Trustee is required to give Notice to all beneficiaries under the Trust and all heirs of the decedent. This Notice is required to be sent within 60 days of the decedent’s death. Upon the first death, the successor Trustee is only required to provide the irrevocable terms of the Trust. Some attorneys send the terms of the Trust with the Notice, although not required. If any possible litigation is anticipated, the Notification should be sent via certified mail.

It is important to obtain a new tax payer identification number for the Trust as the assets cannot remain in the social security number of the decedent nor in that of the Trustee. Complete the IRS Form SS-4. This form is required to be executed by the successor trustee prior to obtaining a taxpayer identification number for any subtrust(s) which are required to be funded. The successor Trustee will appoint the attorney as the “Third Party Designee” in order to obtain the new identification number over the IRS website.

During the initial client meeting, you should have been provided with most of the date of death statements requested in your initial confirmation letter. However, it is unlikely that any appraisals have been completed.

If an estate tax return is anticipated to be filed, a certified appraisal should be obtained based on the market value of any real property as of the date of death. Any stock holdings are valued based on the average of the high and low stock price on the date of death. The Trustee may also need to obtain the value of specific items of personal property of the decedent, such as coins, stamps, jewelry, vehicles, farm equipment, art and antiques. In determining the title of the various assets, you will want to determine if any small estate affidavits need to be prepared under Probate Code Section 13100. If a probate needs to be commenced or a petition under Hegstaad could remedy any assets not held properly in the name of the Trust.

Affidavits Re: Death of a Trustee or Co-Trustee must be recorded to allow new Successor Trustee to take title to property. Declarations must be recorded in the County where the decedent owned property. The County Assessor requires a Preliminary Change in Ownership Report to prevent reassessment upon change in Trustee. Claim for Reassessment Exclusions for Transfers Between Parents and Children must be submitted separately to each County where the decedent owned property passing to children as beneficiaries. These forms should be sent via certified mail and request the assessor confirm and return a copy of the same as proof of receipt. Failure to timely submit these forms can result in reassessment of real property and a substantial increase in annual property taxes. California Proposition 58 permits exclusion from reassessment of real property passing to children limited to the principle residence of the parent and or the first $1,000,000 of other real property. A similar exemption is available for transfers between grandparents and grandchildren only when the parent of the grandchild has predeceased the grandparent and the deceased parent was not married at the time of death.

Trust Certifications and instructions need to be provided to any financial institutions managing accounts in the name of the Trust. Since the surviving spouse is most likely named as a Co-Trustee on the accounts, the re-registration should simply involve removing the deceased spouse’s name and changing the taxpayer identification number. Not all financial institutions have the same policies and the successor trustee may be required to complete new account applications and establish new accounts.

Be sure to conclude the administration with either a sub-trust allocation agreement or distribution agreement. Strongly advise Trustees to prepare and circulate a Distribution Agreement. These agreements set forth distribution provisions. They often contains waiver of formal accounting. They set forth the value of Trust assets and distributions to individual beneficiaries or sub-trusts. When making distributions, they contain release of liability for Trustee and provides for final trust termination.

4. Know your Limits

Only take cases you are comfortable handling. If the matter requires litigation or tax expertise which you don’t have, you may need to refer the case out or associate in counsel. Do not take cases you are not experienced in handling.

5. Communicate
Communicate with your client. Make sure they understand their fiduciary duties to all beneficiaries, keep meticulous records for an accounting, and invest prudently.
Beneficiaries of an irrevocable Trust are entitled to an accounting of the Trust assets at least annually. This accounting can be waived in writing and is not required if the sole trust beneficiary and the trustee are the same person. Other people who have a future interest in the trust, even though the interest is remote, may demand and receive an accounting each year. Trust beneficiaries also have the right to request certain information such as assets on hand, sales, purchases, etc., from the trustee.

The successor trustee(s) should be advised to gather all of the decedent’s mail. Provide the post office with a certified death certificate and copies of the trustee provisions of the Trust. In this regard, a Trust Certification should suffice. The mail is essential to gathering as much information as possible regarding the assets of the decedent, especially if the decedent did not keep organized files. Request the successor trustee to bring as much information as possible to the initial meeting. The determination of their relevance can be determined by the attorney.
6. Act with Diligence

Time is of the essence. Be sure to follow up with your client and be cognizant of deadlines including the due date for the estate tax return and deadline to exercise a disclaimer. Although the length of administration is a “reasonableness period,” the longer it drags out the more likely suspicion and litigation are likely to erupt.
7. Identify Sub Trusts and Need for Administrative Trust

Trust administration is in most cases a transfer of assets which is by its nature a taxable event.
Income produced by trust assets will continue during the period of trust administration so a timely decision should be made regarding how income will be reported. Usually obtaining valuation of the assets and handling of bequests will prevent an immediate funding of marital, bypass or children’s sub trusts. In the meantime a decision must be made between either the pass through method or administrative trust method.

Under the pass through method the trust is ignored and the all trust income is taxed to the sub trusts or beneficiaries beginning with the date of death. If the estate is not large or if funding will occur within the calendar year the pass through approach saves costs and administrative time.

The administrative trust approach treats the trust estate as a separate taxpayer between the date of death and the date that the separate trusts are funded. Under this approach a separate taxpayer identification number is obtained and a 1041 fiduciary tax return filed for the administrative trust.

7. Comply with Tax Filing Requirements

Under IRC 6075(a) an estate tax return IRS Form 706 must be filed within nine months after the date of the decedent’s death. Although the return is due within nine months, an automatic filing extension of an additional six months is available. The automatic extension does relief the taxpayer of the obligation to pay estate tax due within nine months of the decedent’s death.
While a return is only due for a decedent whose gross estate exceeds the applicable exclusion amount (currently $5,250,000.00) other factors including the portability election may require filing. See Below. Generation Skipping Tax Elections are also required on a timely filed estate tax return.

9. Be Aware of the New Portability Election.

The new portability election IRC 2010(c) allows the surviving spouse to add the deceased spouse’s unused exemption amount at the second death.
This is some cases will allow a married couple to avoid using the traditional A/B trust. It gives married couples more flexibility in deciding how to use their exclusion amounts. Under IRC 23 For example, the first spouse to die could give everything to the other spouse without incurring estate tax by virtue of the unlimited marital deduction and the estate could transfer the unused exclusion to the survivor to use in making gifts or at death. However, use of a traditional two-trust plan combining a marital deduction trust with a credit shelter trust may be preferable. A credit shelter trust can prevent post-transfer appreciation in the value of the assets from being subject to estate tax on the survivors’ death. By contrast, an exclusion transferred to a surviving spouse is fixed and may not be sufficient to shield post-transfer appreciation from tax. In addition, a credit-shelter trust can protect assets from being squandered by the surviving spouse and protect against creditors. To take advantage of the portability election the surviving spouse must file a timely estate tax return for the deceased spouse.

10. Understand the Impact of Trust Funding on Income/Property Tax

Under IRC 1014 the basis of property inherited is stepped up to fair market value at the date of decedent’s death. For a couple in California with community property the entire value of the community estate receives a step up. Exceptions to this important benefit include retirement assets and assets gifted prior to death. When administering a trust also note that assets funded into an exemption trust will not receive another step up on the surviving spouse’s death.
In California careful attention needs to also be paid to avoid a real property tax assessment on the transfer to heirs. Staying within the parent child exclusion rules for Prop 13 is critical and appropriate claims should be filed with any title transfers.