When NonLawyers Participate in Medicaid Planning Activities
by Attorney Carmine Perri, Czepiga Daly Pope & Perri
The purpose of this article is to heighten awareness regarding the issue of whether nonlawyers who participate in Medicaid planning activities are engaging in the unauthorized practice of law.
I. The Unauthorized Practice of Law Regarding NonLawyer Medicaid Planning in Florida.
Before discussing the merits of the Florida Supreme Court’s January 15, 2015 Order, a preliminary review of the procedural history will prove helpful.
“The Florida Elder Bar Section’s Unlicensed Practice of Law Subcommittee petitioned the Florida Bar’s Standing Committee on the Unlicensed Practice of Law (herein “Standing Committee”) for an advisory opinion on whether it constitutes the unlicensed practice of law for a nonlawyer to engage in the following Medicaid planning activities leading up to the Medicaid application: (1) drafting of personal service contracts; (2) preparation and execution of qualified income trusts; or (3) rendering legal advice regarding the implementation of Florida law to obtain Medicaid benefits.” The Florida Bar Re: Advisory Opinion- Medicaid Planning Activities by NonLawyers, SC14-211, 2 (January 15, 2015).
The Standing Committee filed its proposed advisory opinion in the Florida Supreme Court. Once filed, interested parties were permitted to comment. After the Supreme Court considered the proposed opinion and briefs of interested parties, including a request from the Florida Department of Children and Families for clarification regarding the nonlawyer activities of its staff, the Court instructed the Standing Committee to file a revised proposed advisory opinion (herein “Revised Opinion”). Id. The Revised Opinion was submitted on October 14, 2014. On January 15, 2015, the Supreme Court stated, “the [revised] advisory opinion shall have the force and effect of an order of this Court and shall be published accordingly.” Id.
Within the Revised Opinion, the Committee states:
Medicaid planning involves: (1) the assessment of all facts relevant to a client’s situation, including personal, financial, familial, and historical; (2) application of those particular facts to the laws governing Medicaid; (3) developing a plan to structure or spend those assets in compliance with those laws or planning to reverse actions already taken to correct potentially unauthorized activity to minimize legal consequences; (4) drafting legal documents to execute the plan; and (5) assisting the client in correctly executing a particular plan. Id. at 15.
When considering what the unauthorized practice of law is, the Committee cited The Florida Bar v. Sperry, 140 So. 2d 587, 597 (Fla. 1962), vacated on other grounds, 373 U.S. 379 (1963), in which the Court stated:
[I] in determining whether the giving of advice and counsel and the performance of services in legal matters for compensation constitute the practice of law it is safe to follow the rule that if the giving of [the] advice and performance of [the] services affect important rights of a person under the law, and if the reasonable protection of the rights and property of those advised and served requires that the persons giving such advise possess legal skill and a knowledge of the law greater than that possessed by the average citizen, then the giving of such advise and performance of such services by one for another as a course of conduct constitute the practice of law. Id. at 591.
Additionally, the Committee was persuaded by testimony that described “the type of harm caused by nonlawyer Medicaid planners which includes denial of Medicaid eligibility, exploitation, catastrophic or severe tax liability, and the purchase of inappropriate financial products threatening or destroying the clients’ life savings.” The Florida Bar Standing Committee on the Unlicensed Practice of Law, FAO #2014, 21 Revised Proposed Advisory Opinion, Medicaid Planning Activities by NonLawyers, (October 14, 2014).
The Revised Opinion concluded that nonlawyers engaging in any of the following activities constitute the unlicensed practice of law:
1. Drafting a personal service contract;
2. Determining the need for, preparing, and executing a Qualified Income Trust, including gathering the information necessary to complete the Trust;
3. A nonlawyer should not be authorized to sell personal service or Qualified Income trust forms or kits in the area of Medicaid planning; and
4. Rendering legal advice regarding the implementation of Florida law to obtain Medicaid benefits, including advising an individual on the appropriate legal strategies available for spending down and restructuring assets and the need for a personal service contract or Qualified Income Trust.
The Florida Bar Standing Committee on the Unlicensed Practice of Law, FAO #2014, 22 Revised Proposed Advisory Opinion, Medicaid Planning Activities by NonLawyers, (October 14, 2014).0
The Revised Opinion did state, however, that a nonlawyer’s preparation of the Medicaid application itself would not constitute the unlicensed practice of law.
II. NonLawyer Medicaid Planning in Connecticut.
In Connecticut, there is a growing trend of nonlawyers who are now “assisting” applicants, and their families, with the Medicaid application process. Increasingly, nursing facilities are referring residents, and their family members, to these nonlawyer “service” providers.
Before looking at one such “service” provider, Connecticut General Statute §51-88 states that “a person who has not been admitted as an attorney . . . shall not (1) practice law . . . .” Conn. Gen. Stat. §51-88 (a) (2014). Absent an applicable exception, the penalty for practicing law without a license is a class D felony. Conn. Gen. Stat. §51-88 (b)(1) (2014).
With the above as a background, this writer went to the following website, http://medicaid4you.com, to research some of the services Medicaid4You.com, LLC (herein “Medicaid4You”) provides.
On Medicaid4You’s Home Page, in its heading, the company states, “Expert, affordable processing of Medicaid (Title 19) applications for long-term care. We make applying for Medicaid easy. Serving clients in over 600 nursing homes in Connecticut, Massachusetts, and Rhode Island.” Medicaid4You.com LLC, Home Page, http://medicaid4you.com (accessed Apr. 15, 2015) (Emphasis added).
It is important to note that Medicaid4You, within its own website claims to: “work with you to determine your Medicaid eligibility,” the case manager will “act as a Medicaid consultant, advising you about how to make decision and providing you information about how you’re allowed to use assets,1 ” the case manager submits the application, the case manager is the applicant’s contact person for purposes of the Medicaid Application, and that the case manager will attend the fair hearing with the applicant. Medicaid4You.com LLC, Our Service, http://medicaid4you.com (accessed Apr. 15, 2015).
Finally, from its FAQ section:
Can’t I use a lawyer instead of Medicaid4You?
Yes. Medicaid has declared the use of an attorney to be an allowable “spend down” expense, and many attorneys do offer the same service we do. However, we routinely see the legal community quote $8,000 to $15,000. Our fee is $3,000. We’ll also travel to your home and collect documentation for you; attorneys place that burden on the customer. (You can see a full, side-by-side comparison chart here2 .)
Medicaid4You.com LLC, FAQs About Medicaid, http://medicaid4you.com (accessed Apr. 15, 2015)
The time in Connecticut has come that we, as Elder Law attorneys, and the Bar Association, must take a closer look at individuals and companies that claim to be able to assist with the Medicaid Application process. Printing an application or assisting an applicant with filling it out is not the practice of law. Working with an applicant to determine his or her Medicaid eligibility, giving an applicant advice3 , submitting the Medicaid Application, representing, a word companies like Medicaid4You would never use, the Applicant in regards to communications with the Department of Social Services, and appearing at the Fair Hearing go well beyond merely preparing a Medicaid Application. When “service” providers like Medicaid4You compares itself to attorneys, it is holding itself out to the public that it does what we do, but with greater service and for a fraction of the cost.
Furthermore, that it appears some nursing facilities are referring residents and family members to these companies further exacerbates the issue; it is unknown, as one issue of many, whether a nursing facility receives a referral fee if it makes a referral to the “service” provider.
Within our Rules of Professional Conduct we have a Preamble that lists four functions when representing clients: advisor, advocate, negotiator, and evaluator. Rules of Professional Conduct, Preamble (2014). Companies like Medicaid4You, based upon its own representations, arguably perform all four of these functions on behalf of its clients. Florida has recently taken steps to protect Medicaid applicants from hiring nonlawyers engaged in Medicaid planning. It is time that Connecticut does the same.
1 The site has an “Eligibility Requirements” section that discusses spend down requirements, including that “Medicaid4You.com LLC fees [$3,000.00] can also be applied as part of your “spend down” expenses.” Medicaid4You. com LLC, Eligibility Requirements, http://medicaid4you.com (accessed Apr. 15, 2015).
2 The side by side chart compares Medicaid4You to an attorney in 12 categories; not surprisingly, Medicaid4You satisfies the requirements in all 12 categories whereas the attorney only satisfies two of the twelve categories (it is unknown on what evidence Medicaid4You bases its conclusions.
3 With giving advice, the issue is not only what advice is given, but what advice should have been given; oftentimes, the issue is not what was said but what should have been said.
This article was originally published in the CTNAELA Practice Update, Spring 2015 edition