Top 10 Nationwide Elder Law Court Rulings of 2011

Below is a roundup of the top 10 national elder law decisions for the past year, as measured by the readers of the ElderLawAnswers website.

1. Medicaid Applicant’s Penalty Period Does Not Begin Until Returned Assets Are Spent Down

In Marino v. Velez (U.S. Ct. App., 3rd Cir., No. 10-2324, Jan. 10, 2011), the U.S. Court of Appeals, Third Circuit, ruled that a New Jersey Medicaid applicant who transferred assets and then had some of the transfers returned cannot get credit toward her penalty period for the time before the transfers were returned that she was resource-eligible.

2. State Cannot Recover Assets That Were Transferred Before Medicaid Recipient Died

In In Re: Estate of Perry (Idaho Dist. Ct., 4th Dist., No. CV-IE-2009-05214, March 16, 2011), an Idaho district court ruled that the state cannot recover assets from the estate of a Medicaid recipient’s spouse that were transferred to the spouse before the Medicaid recipient died.

3. Federal Court Ruled Medicaid May Recover Cost Of Medical Care From Recovery For Future Medical Expenses

A federal district court ruled that a state Medicaid agency may recover the cost of a beneficiary’s medical care from the portion of her personal injury settlement that was allocated to medical expenses, regardless of whether the funds were allocated to past or future medical care. Perez v. Henneberry (D. Colo., No. 09-cv-01681-WJM-MEH, April 26, 2011).

4. Court Upholds Nursing Home Resident’s Eviction Prior to Resolution of Medicaid Appeal

In King v. Butler Rest Home Inc. (Ky. Ct. App., No. 2010-CA-001467-MR, June 17, 2011), a Kentucky appeals court held that a nursing home may evict a resident for nonpayment despite a pending Medicaid appeal.

5. Payments to Caregivers of Dementia Patient Are Deductible Medical Expenses

The U.S. Tax Court ruled that payments to caregivers of a dementia patient are deductible medical expenses, even though the caregivers were not licensed health care providers. Estate of Lillian Baral (U.S. Tax Ct., No. 3618-10, July 5, 2011).

6. Third Circuit Affirmed That N.J. May Count Promissory Notes As Available Resources

In a long-running case that has bounced back and forth between two federal courts, the Third Circuit Court of Appeals ruled that New Jersey’s Medicaid agency may analyze promissory notes as trust-like devices and count the notes as available resources. Sable v. Velez (U.S. Ct. App., 3rd Cir., No. 10-4647, July 12, 2011). I previously blogged about this very important case here.

7. Transfer of Medicaid Applicant’s House to Son Falls Within Caregiver Child Exception

A New Jersey appeals court ruled that the transfer of a Medicaid applicant’s house to her caregiver son was not subject to a Medicaid penalty period because it fell within the “caregiver child” exception to Medicaid rules prohibiting the transfer of assets. V.P. v. Department of Human Services (N.J. Sup. Ct., App. Div., No. A-2362-09T1, Sept. 2, 2011). I previously blogged about the V.P. case here.

8. U.S. Court Rules Connecticut Likely Cannot Refuse Spousal Refusal Doctrine

Ruling that a state statute violates federal Medicaid law, a federal district court granted a preliminary injunction preventing Connecticut from denying Medicaid benefits to an applicant seeking to disregard his spouse’s assets using the doctrine of spousal refusal.  Fortmann v. Starkowski (D. Ct., No 3:10cv1562 (JBA), Sept. 28, 2011).

9. Medicaid Applicant’s Transfer to Daughter Created Trust-Like Device

In Pfeffer v. Arizona Health Care Cost Containment System (U.S. Dist. Ct., D. Ariz., No. CV-11-0891-PHX-GMS, Sept. 29, 2011), a federal district court ruled that when a Medicaid applicant transferred money to her daughter with the intention that the daughter pay for her care during the resulting penalty period, she created a trust-like device, so the money is still an available resource.

10. Irrevocable Trust Set Up by Medicaid Applicant’s Children Is Available Asset

In Hedlund v. Wisconsin Dept. of Health Services (Wis. Ct. App., No. 2010AP3070, Oct. 13, 2011), a Wisconsin appeals court ruled that a Medicaid applicant who transferred funds to her children, who then put them in an irrevocable trust for her benefit, is ineligible for Medicaid because the trust is an available asset under state law, even though the transfer occurred 17 years before she applied for Medicaid.