New York NAELA’s legislative proposal may be a model that can be used to address this issue in other states.
The elder law Bar and our clients have struggled over the past several years with problems arising from non-attorney companies handling not just routine Medicaid applications, which is permitted by federal regulations, but going beyond that to provide Medicaid planning services. Exactly where the line is drawn between those two poles is often not clear; merely filing an application is not sufficient to obtain eligibility if there have been transfers of assets, so that crosses the line since it involves more than just filing forms. There may be remedies to address such problems with applications, and those are legal issues that ought to be handled by attorneys experienced in elder law. Elder law attorneys have seen numerous cases in which clients were not advised properly by such entities and suffered serious financial consequences as a result.
While some states have addressed this issue as a matter of the unlawful practice of law, relying on authority for their state supreme courts to issue advisory opinions on the issue, in many states, that remedy is not available. Relying on the unlawful practice of law issue also does not have much appeal outside the Bar; it is seen as just a guild trying to protect its turf.
Faced with this situation in New York, the New York Chapter of NAELA took a different approach. The Chapter believes that this is really a consumer protection issue and should be addressed as such.
The Chapter was formed in large part because it could be more nimble than the Elder Law and Special Needs Section of the New York State Bar Association, although their members work closely together. In particular, the Chapter has the ability to introduce affirmative legislative proposals while any affirmative legislation proposed through the State Bar requires approval of the House of Delegates of the State Bar, which is time-consuming and difficult if there are any opposing views among the Bar’s sections.
Starting in the summer of 2020, the New York Chapter drafted a proposed bill that would require nursing homes to provide written notice as part of the admission paperwork and by posting in the facility concerning the right to hire an attorney to assist with a Medicaid application and the potential pitfalls of relying on other entities to do so. The notice points out that these entities are not permitted to give legal advice or implement legal strategies and are not obligated to advise applicants of their rights. It also points out that these entities may have conflicts of interest. Some of these services have financial arrangements with the nursing homes. The bill was introduced in early February 2021 as New York Assembly bill A.4576, and in May 2021 as New York Senate bill S.6926. Both the full text and the sponsor’s memorandum of support are available on the Senate website.
The timeline of this bill demonstrates that a legislative solution to this process is neither quick nor easy. When the bill was drafted in mid-2020, its sponsor was the chair of the Assembly Committee on Aging, but before he could be approached to introduce it, he had to fend off a primary challenge that could have made him a lame duck. Then come January, a new chair of that committee was appointed, and the sponsor rotated off the committee, although a newly elected member of the Assembly who co-sponsored the bill was appointed to that committee. Meanwhile, it was a “one house bill” without a sponsor in the State Senate until May, and without sponsorship in both houses, it would not move forward. By then the session was almost over, so the bills have to be carried over to next year. It also likely would face opposition from the nursing home industry and attorneys representing nursing homes.
The New York Chapter will be actively working to gather support for this legislation. Chapter members will be encouraged to contact their state assembly members and state senators to enlist them as co-sponsors and to network with other organizations concerned about the rights of the elderly to try to advance this into law. The Chapter is also working with the New York State Attorney General’s office on this issue. This bill may be a model that can be used to address this issue in other states.