The Case of The Missing Miller Trust and a $15,000 Nursing Home Bill

The phone rang at 3:30 Friday afternoon. A nursing home business office manager who refers business to me from time to time quickly reintroduced herself and said she had a problem she hoped I could help her with.  She asked how quickly I could turn around a Miller Trust for one of her residents.   “In as little as 72 hours.” I replied.  “How soon do you need it?”  I heard her draw in a long breath and let out a sigh.  “Can you get it done by Monday morning?”, she asked hopefully.

When a call like this comes in during the last week of the month, I realize the need to move that quickly. But, when it’s the middle of the month, something else is causing the urgency.

And there was.

The patient submitted an application in January.  The business office manager told the patient’s daughter she would be happy to submit the application and told her what documents to provide with the application.  When the application and documents arrived, the business office manager quickly reviewed the statements, said everything looked fine and submitted the packet.

But everything wasn’t fine.

Medicaid denied it in mid-April for excess assets. According to the business office manager, total assets were slightly higher than $2,000 every month.  The denial put the daughter on the blunt end of a hard lesson about how strictly Medicaid applies the rule on asset limits. Her dad could have no more than $2,000 of countable resources as of the first day of each month.  The bank sent statements mid-month and neither the daughter nor the business office manager had confirmed the end of month totals.

Because the case was denied, the business office manager told the daughter she needed to pay the full private pay amount for not only February, March and April, but May as well.   To keep her dad in the nursing home, the daughter pulled out every penny she had saved in her IRA to cover the nursing home costs…nearly $15,000!

Once again the business office manager reviewed the bank statements. She noticed the balance on the checking account was well below $1,000 and felt comfortable about the assets. Then she checked the patient’s deposited income. Seeing that the only deposit was from Social Security for less than $2,199, she again submitted the application.

This time the application was denied but not for excess assets.  The patient had too much income. The business office manager made a common mistake.  To determine Medicaid income eligibility, the caseworker uses the gross amount of income. Gross means the amount before any deductions.  Social Security deducts premiums for Medicare Part B and Medicare part D for most recipients.

The nursing home business office manager missed the need for the Miller Trust.  That mistake costs the family $15,000 so far.  They need to get the Miller Trust properly set up by the end of the month to avoid any additional expenses.

There are two morals to this story. First, there are no simple cases.  Just because the asset and income picture are not complicated, doesn’t mean the Medicaid solution is “simple.” In this situation the lack of understanding how asset and income levels work, complicated the solution.

The second lesson is to involve an Elder Law attorney experienced in Medicaid matters from the very beginning, even if you think your situation doesn’t require an attorney.

You might be right.

If so, the worst you’ll be out is a few hundred bucks for a consultation.

But you could be wrong.

And, like in this case, you could end up spending $15,000 you didn’t need to because of something that was missed. In the end you need to decide what your peace of mind is worth.