Attorney At Law

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By Nancy Burner Esq.

Nancy Burner, Esq.

Executing a Last Will and Testament with an attorney is an important step in deciding and planning your legacy. However, this does not mean that all is solved upon one’s death. It is important that the client and future executor understands the process of probate and the necessary requirements of the court system. 

Probate is the legal procedure by which your assets pass upon your death. When a person dies with a will, the nominated executor must file a probate petition with the Surrogate’s Court in the county in which the decedent lived. This is necessary to be officially appointed by the court so that the executor can distribute property or assets left by the decedent. 

First, the executor files the original will, a certified copy of the death certificate, and the probate petition in Surrogate’s Court. Then, notice needs to be given to the decedent’s next-of-kin who would have inherited had there not been a will. The next of kin will either sign waivers and consents in agreement or issue a citation to appear in court to have the opportunity to object to the will. Often a family tree affidavit needs to be filed by an independent person who knows the family history. 

After jurisdiction is complete and any issues with the will addressed, the Surrogate’s Court will issue a decree granting probate. The judge issues Letters Testamentary giving the executor authority to act. These Letters Testamentary serves as the physical paperwork for the executor to carry out distributions of the estate. 

When a person dies without a will (intestate), it is necessary to file an Administration Petition with the Surrogate’s Court. Here, a close relative of the decedent applies to become the decedent’s Administrator. The assets pass to blood relatives according to statute. The Court will then issue Letters of Administration appointing them Administrator. As with a probate proceeding, all interested parties must be given notice and either sign a waiver or served with a citation issued by the court. Sometimes a kinship hearing is necessary to prove relation to the decedent. 

As you can imagine, the probate process can be costly and time consuming in even the simplest cases. Probate proceedings can drag on for years when distant relatives cannot be located or a relative decides to contest the will. Contested wills can result in litigation proceedings and become draining mentally and financially for those involved. The good news is that probate can be avoided through the use of beneficiary designations and trusts.

Assets held jointly with rights of survivorship pass automatically to the surviving owner upon death. This is common in the case of spouses. Likewise, assets with designated beneficiaries pass to the designated beneficiaries, avoiding probate. Examples of jointly held assets include joint bank accounts and real property owned by spouses. Common assets with designated beneficiaries include retirement accounts and life insurance policies. If you have not named a beneficiary on an account that allows it, these assets must go through probate. Of course, not every type of asset allows a beneficiary designation. 

Another way to avoid probate is by creating a living trust. While there are many different types of living trusts, most can hold assets such as bank accounts, real estate, businesses, and personal belongings. For example, a revocable living trust is primarily used to avoid probate. You, as the grantor, would be both the trustee and beneficiary during your lifetime. You would add a successor trustee to take over if you became incapacitated and upon your death. This successor trustee can seamlessly take over management of the trust property and no court proceedings are necessary. 

Keep in mind, any assets owned by a revocable or irrevocable trust will simply pass according to the terms of the trust, free from court interference. Certain trusts also allow a trustee to control assets if one becomes incapacitated.  

One size does not fit all when it comes to trust planning. It is important to discuss the best option for you and your loved one with an attorney who specializes in this area of the law and can explain the pros and cons of trusts, probate and more. 

Nancy Burner, Esq. is the founder and managing partner at Burner Law Group, P.C. with offices located in East Setauket, Westhampton Beach, New York City and East Hampton.

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By Nancy Burner, Esq.

Nancy Burner, Esq.

When a couple gets divorced, the court attempts to divide the marital property as fairly and equally as possible. 

This doctrine of Equitable Distribution considers factors such as the length of the marriage, age and health of each party, and the earning power of each spouse. Under New York State law, “marital property” is broadly defined as property acquired by one or both spouses during the marriage. “Separate property” is defined as property acquired by an individual prior to marriage. Separate property is not subject to Equitable Distribution.

However, certain types of assets acquired during marriage are not subject to Equitable Distribution. Inheritance, gifts received from individuals other than one’s spouse, and personal injury compensation are considered separate property.

At first glance, it may appear that your child’s inheritance does not need protecting, but this is not the end of the story. Separate property can become marital property if “commingled” with marital property. 

For example, if your child were to deposit their inheritance into a joint account with their spouse, use inherited assets to purchase a home titled jointly, or your child’s spouse contributes to the maintenance and capital improvements of inherited property, the assets would become commingled and thus subject to Equitable Distribution upon divorce.

The best action you can take to prevent this from occurring is to leave your child’s inheritance in a trust. You could name your child as trustee or appoint someone else, and you would be able to limit distributions from the trust as you see fit. Importantly, the trust adds a layer of separation, better protecting the inheritance from a divorcing spouse and creditors by maintaining its status as separate property.

Moreover, with a trust you can control the remainder beneficiaries of the property you leave your child after his death. If you were to leave them their inheritance outright, your child’s own will would dictate how their estate were to pass. But with a trust you could stipulate that upon your child’s death any remaining assets pass to whomever you wish. This could be your grandchildren, your other children, or your favorite charity.

Nancy Burner, Esq. is the founder and managing partner at Burner Law Group, P.C with offices located in East Setauket, Westhampton Beach, New York City and East Hampton.

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By Nancy Burner Esq.

Nancy Burner, Esq.

Revocable trusts have become increasingly popular estate planning tools to avoid probate. A  trust allows for the orderly and private administration of your assets at death without court  involvement. 

A revocable trust is a trust that you create during your lifetime designed to give you flexibility and control over your assets. You may act as your own trustee, thereby  maintaining complete control over your assets. Assets can be transferred in and out of the  trust at your discretion and you may change or revoke your trust at any time. 

A revocable trust can hold any asset. Common assets include real property, non-qualified  investment accounts, bank accounts, certificates of deposit, and life insurance policies. Qualified retirement accounts should never be transferred to a revocable trust as it would  cause a taxable event.  

Assets titled in the name of your revocable trust pass to the beneficiaries automatically,  thereby avoiding probate. Likewise, any assets with designated beneficiaries pass directly to  beneficiaries. Assets in your sole name that do not have designated beneficiaries must go  through probate.  

Why do people want to avoid probate? Probate is time consuming and can be expensive. When a person dies with a will, the nominated executor must file a probate petition with  the Surrogate’s Court before having the authority to act. First, the Executor will file the  original will, certified copy of the death certificate and the probate petition in Surrogate’s  Court. Then, notice is given to the decedent’s next-of-kin who would have inherited had  there been no will. The next-of-kin will either sign waivers and consents or be issued a  citation to appear in court to have the opportunity to object to the Executor. 

After  jurisdiction is complete and issues with the will, if any, are addressed, the Surrogate’s Court  will issue a decree granting probate and Letters Testamentary. Only then can the Executor  gather the assets and distribute them according the directives in the will.  

When a person dies without a will (intestate), the process is similar. It is necessary to file an  Administration Petition with the Surrogate’s Court. Here, a close relative of the decedent  applies to become the decedent’s Administrator. As with a probate proceeding, all interested  parties must be given notice and must either sign a waiver or be served with a citation issued by the court. The Court will then issue Letters of Administration appointing them as Administrator.  

By creating and funding a revocable trust, your beneficiaries will avoid having to go through  this probate process. This avoids the attendant costs and delay, which can be substantial if  there is a will contest or hard to find relatives. Additionally, because of the backlog created  by the pandemic and the recent ransomware attack on the Suffolk County government this  past fall, the courts are extremely behind.

Even “straightforward” probate matters take months, even years, to make their way through the court system. This explains why more and more people  are deciding to create revocable trusts so that their spouses and children can inherit their  estate seamlessly, free from court interference. 

Nancy Burner, Esq. is the founder and managing partner at Burner Law Group, P.C with offices located in East Setauket, Westhampton Beach, New York City and East Hampton.

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By Nancy Burner Esq.

Nancy Burner, Esq.

The Medicare program is administered jointly by the state and federal government. Medicare is available to adults 65 years of age and older, or to anyone under the age of 65 who is entitled to Social Security Disability. 

Medicare provides varying levels of medical coverage, depending on the plan you have. Medicare Part A and Part B, two of the more basic plans, provide coverage for hospitalization stays, rehabilitation, physical therapy, routine doctor visits, and medical equipment. Medicare Part A will also cover the cost of hospice care with a terminal diagnosis of less than 6 months. 

It is important to note that Medicare will not pay for long term services in a facility or services received at home on a long term basis. For example, if you fall and require surgery, you may need rehabilitation in a facility before able to safely return home. In this case, as long as all requirements are met following the hospital stay, Medicare Part A will cover the full cost of the first 20 days in a rehabilitation facility. For days 21-100, there is a co-pay per day if the patient continues to need rehabilitation services. 

If you have a supplemental insurance policy or commonly referred to as a “gap” policy, this may help ease the cost of the daily out of pocket co-pays. After Medicare stops paying, the full cost of the nursing home falls on the patient. This can cost can be upwards of $600 per day.

As you can see, coverage for rehabilitation under Medicare Part A is intended to be short-term. The goal is improvement of acute conditions through rehabilitation and skilled nursing care. While given up to 100 days, patients rarely qualify for this full amount. After admittance to a facility, the patient is evaluated periodically. Once the facility determines that the patient no longer needs skilled care, coverage under the Medicare program ends.

The most important piece to understand is the difference between skilled care and custodial care. Medicare does not cover custodial care. There are many circumstances where the patient does not fall into the category of needing rehabilitative or skilled care, but the family cannot bring their loved one home safely. Medicare does not pay for time to set up a discharge plan. Once Medicare terminates coverage, the patient needs to return to the community or start privately paying for care.

As you enter the arena of Medicare and with unpredictable times, education is key. It is important to meet with your Elder Law attorney to discuss future care plans and options for aging in place successfully.

Nancy Burner, Esq. is the founder and managing partner at Burner Law Group, P.C with offices located in East Setauket, Westhampton Beach, New York City and East Hampton.

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By Nancy Burner, Esq.

Nancy Burner, Esq.

When the SECURE Act passed in 2019, the biggest impact on estate planning was the elimination of the “lifetime stretch” for most beneficiaries of individual retirement plans (IRAs). 

Before the SECURE Act, a beneficiary of an IRA had the option to take distributions over their own life expectancy. This allowed families to pass down tax-deferred accounts and accumulate wealth tax free across generations. Now, the only beneficiaries eligible for the stretch are spouses, disabled or chronically ill individuals, minor children of the plan owner, and those not less than ten years younger than the plan owner. For non-eligible beneficiaries, the 10-year rule applies. This rule requires that the beneficiary withdraw the entire inherited retirement account within 10 years.

The new SECURE Act 2.0, passed on January 1, 2023, brought new rules and clarifications. The original SECURE Act was silent on whether the 10-year payout rule required distributions on an annual basis. SECURE Act 2.0 clarifies that the beneficiary must take out at least the required minimum distribution each year, with a full payout by the tenth year. Luckily, anyone who inherited an IRA before the clarification will not be penalized for failure to take out the required minimum distribution. 

SECURE Act 2.0 has brought relief for stranded 529 Plans. Unused 529 funds can now be rolled over into a Roth IRA without a penalty. Beginning in 2024, the beneficiary of a 529 Plan can roll funds (capped at $35,000.00) into a Roth IRA. It used to be that a 10% penalty was imposed, and the withdrawals taxed if not used for qualified educational expenses. To qualify, the 529 account must have been open for at least 15 years. Keep in mind that there is a limit to the annual contribution amount, which is currently set at $6,500 for 2023. So it would take five years to move the maximum amount allowed into the Roth.

The new SECURE Act also fixed the issue of leaving a retirement account to a Supplemental Needs Trust. The Supplemental Needs Trust was not being afforded the lifetime stretch if the remainder beneficiary was a charity. SECURE Act 2.0 allows for a charitable remainder beneficiary without the loss of the stretch for the primary disabled beneficiary.

Another boon is that the age that a person must start taking their required minimum distribution has increased to 73 from 72. The penalty for not taking timely distributions has also decreased. For those 64 or younger, SECURE 2.0 increases the minimum age to 75 starting in 2033. This allows individuals to keep money in their retirement accounts longer, allowing it to grow without incurring taxes on withdrawals.

The SECURE Act and SECURE Act 2.0 have made major reform to longstanding retirement planning. It is advisable to speak with your estate planning attorney to discuss if these changes warrant updates to your estate plan.

Nancy Burner, Esq. is the founder and managing partner at Burner Law Group, P.C with offices located in East Setauket, Westhampton Beach, New York City and East Hampton.

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By Nancy Burner, Esq.

Nancy Burner, Esq.

Each year, the Department of Health will release updated resource and income levels for the  Medicaid program. This year there has been a significant increase. Beginning January 1, 2023,  New York State will be increasing the asset limits for community and nursing home Medicaid and income limits for community Medicaid. 

For both community (home health aides) and chronic (nursing home) Medicaid, the available  asset limit for 2023 is being increased to $28,133 for an individual applicant (the former asset  limit for 2022 was $16,800) and $37,902 for a married couple (up from $24,600), allowing  Medicaid applicants to retain significantly more assets and still be eligible for Medicaid.  

The income limit for community Medicaid applicants is being increased from $934/month to  $1,563/month for individual applicants and for married couples the income limit is being  increased from $1,367/month to $2,106/month. There is an additional $20.00 disregard that  can be added to each allowance; therefore, the total of income allowance for an individual  applying for Medicaid can have $1,583/month and married couples can have $2,126.00. 

Under  this program, any excess income can be directed to a Pooled Income Trust for the benefit of  the Medicaid applicant and the monies deposited into the trust can be used to pay the  household expenses of the Medicaid applicant. In New York, all Pooled Income Trust are  managed by charitable organizations. It is important to use the monies in the Pooled Income Trust because when the applicant passes away, the balance goes to the charity.  

As for nursing home Medicaid applicants, the monthly income limit will continue to be $50, but the income limit for the non-institutionalized spouse is being increased to $3,715/month.  Additionally, federal guidelines permit community spouses to retain up to $148,620 in assets plus a primary residence with a maximum value of $1,033,000. 

Even if the community  souse has assets and income over the threshold, New York’s spousal refusal provisions provide even more protection in that a community spouse can elect to sign a document  which allows them to retain assets in any amount, including assets which were previously in the name of the spouse that requires care in a nursing facility. 

Individuals applying for Medicaid benefits after January 1, 2023, should apply based on the  asset and income limits discussed above. For those individuals who are already receiving  community Medicaid and are using a pooled trust for their excess monthly income, your  monthly budget/spend-down will remain the same until you recertify, at which time the  increased income limits will be applied. 

However, starting in January 2023 Medicaid  recipients may ask their local Medicaid office to re-budget their spend-down based on the  new income limits before their next renewal, enabling community Medicaid recipients to  keep more of their monthly income sooner. It is advisable to consult an elder law attorney  in your area to determine if a re-budget is appropriate in your case.  

While the asset allowance has been increased, keep in mind that the five-year look-back  period for nursing home Medicaid still applies, which means that any transfer of assets made  within this period for below market value will incur a penalty period and Medicaid coverage  will commence only after the penalty period has elapsed. Typically, there is always  Medicaid planning that can be accomplished even if the individual immediately needs  Medicaid coverage and has done no pre-planning. 

*Please note, the income and assets are based on the 2022 Poverty Level. This is subject to  change based on the 2023 Poverty Level. 

Nancy Burner, Esq. is the founder and managing partner at Burner Law Group, P.C with offices located in East Setauket, Westhampton Beach, New York City and East Hampton.

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By Nancy Burner, Esq.

Nancy Burner, Esq.

Various types of property, such as bank accounts and real estate, can be owned jointly with another person(s). Depending on the type of joint ownership, the property may pass automatically to the joint owner, outside of probate and those named in the will.

A will only governs assets in the decedent’s sole name that do not have a designated beneficiary. For example, if a co-owner of a checking, savings, or deposit account were to pass away, the account would automatically become solely owned by the surviving owner, outside of probate, and the will of the deceased owner would not apply.

Real estate can be jointly owned in several different ways, each coming with a different set of rules:

Joint Tenancy: Also known as “Joint Tenancy with Rights of Survivorship,” Joint Tenancy provides that upon the death of a joint owner, that owner’s share automatically goes to the surviving joint owner and does not pass through probate and is not governed by a will. 

For example, if Mary and Bob owned property as Joint Tenants and Bob passed away, Mary would automatically become the sole owner even if Bob’s will directed that all his property should pass to his children. When Mary passes away the property would pass according to her will since she is now the sole owner. The main advantage of Joint Tenancy is that it avoids probate upon the death of the first Joint Tenant and probate (the process by which the court verifies the validity of a will) is typically costly and takes several months to complete.

Tenancy by the Entirety: Tenancy by the Entirety is a type of joint tenancy only available between spouses and is valid in a few states including New York. As with Joint Tenancy, upon the death of the first spouse their interest automatically passes to the surviving spouse outside of probate and is not governed by their will. 

In addition to avoiding probate, Tenancy by the Entirety provides several protections in that one spouse cannot mortgage or sell the property without the consent of the other spouse, nor can the creditor of one spouse place a lien or enforce a judgment against property held as tenants by the entirety. 

Tenancy in Common: Here, there is no right of survivorship and each owner’s share of the property passes to their chosen beneficiaries upon the owner’s death. Tenants in Common can have unequal interests in the property (e.g. 50%, 40%, 10%) and when one Tenant dies their beneficiaries will inherit their share and become co-owners with the other Tenants. 

A Tenant in Common’s share will pass according to their will (if they have one) which means the nominated Executor will have to probate the will by filing a petition with Surrogate’s Court. However, a Tenant in Common can still avoid probate if their share of the property is held in trust, in which case the terms of the trust (rather than their will) would control how the property passes at death and no court involvement would be needed.

A comprehensive estate plan with an experienced attorney ensures that probate and non-probate assets work in harmony. In addition, there are capital gains consequences when transferring ownership interests during your lifetime — and such “gifts” should never be done without consulting an attorney or accountant. 

One of the biggest problems we see with DIY wills is the testator failing to account for the different types of ownership and what assets pass through the will.

Nancy Burner, Esq. is the founder and managing partner at Burner Law Group, P.C with offices located in East Setauket, Westhampton Beach, New York City and East Hampton.

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By Nancy Burner, Esq.

Nancy Burner, Esq.

A Durable Power of Attorney (“DPOA”) is a statutory form that enables a person to empower a loved one or trusted individual to manage finances and property on their behalf. The concept is, even if one lacks legal capacity to handle their own financial and business affairs, their appointed agent will be able to use the document to access bank accounts, sign checks, pay bills, and carry out essential estate planning for Medicaid asset protection purposes. Note that not all powers of attorney are the same, the particular powers that the agent will have will depend on how the document is drafted.

As long-term care, including home care and nursing home care, is not covered by health insurance, many people look to Medicaid as a pay source. Medicaid, however, is a means- based program for which qualification requires an individual prove they have no more than $16,800 in assets (in 2022). Further, there is a 5-year lookback period for nursing home Medicaid. This means that upon application, there is a scrutiny of the prior five years of the financial life of the applicant and their spouse, looking for any assets gifted within the 5 years prior to applying. While there are certain allowable or exempt transfers, all other transfers will result in a “penalty period,” a period of time during which Medicaid will not assist with the costs of care.

Fortunately, there are several exempt transfers that do not incur a penalty period, the most common being a transfer of assets to one’s spouse. Thus, if one urgently needs nursing home care, but has assets above the Medicaid limit, they can transfer assets to their spouse to bring themselves under the resource limit to qualify for Medicaid without penalty. In certain circumstances, assets can also be transferred to individuals other than the spouse,

This is where the DPOA comes into play because if the Medicaid applicant lacks mental capacity, they will not be able to transfer assets. And, contrary to popular belief, a spouse does not have the authority to access the other’s bank accounts or other assets simply because they are married—unless the spouse were a joint owner, they would need a DPOA or be appointed legal guardian by the court, a costly and time-consuming process.

Since the standard statutory form does not include any gifting over $5,000, modifications must be included with additional provisions supplementing the authority granted to the agent. For starters, the document must specifically authorize gifting. In the scenario where assets need to be transferred to the spouse and the spouse is the agent in the document, it must also specify the authority for self-gifting.

While authorizing your agent to gift assets to themselves can be critical to securing Medicaid coverage, it should not be done without careful consideration. Any assets transferred would no longer be governed by the will, trust, or other estate planning documents of that person. Once property is transferred to another person, it is theirs and, while one would hope they would follow the wishes of the principal, it raises the risk that chosen beneficiaries will be disinherited. Choosing an agent that a principal trusts completely to follow their wishes and only do what is in their best interest is a necessary part of this type of planning.

The decision whether to grant the agent the authority to self-gift under a DPOA is not an easy one and there is no “right” answer. On the one hand, allowing the agent to gift assets to themselves may be the only way to quickly qualify for nursing home Medicaid coverage if one lacks the legal capacity to transfer the assets. On the other hand, an agent may never be needed to gift or self-gift because Medicaid is not needed or there are other ways of gaining eligibility.

The moral of the story is to address estate planning with an experienced elder law attorney sooner rather than later to advise on these issues and draft the appropriate DPOA document. There are various strategies by which assets can be protected for Medicaid eligibility while effectively ensuring that assets are left to chosen beneficiaries at the time of death.

Nancy Burner, Esq. is the founder and managing partner at Burner Law Group, P.C with offices located in East Setauket, Westhampton Beach, New York City and East Hampton.

By Nancy Burner Esq.

Nancy Burner, Esq.

Being a Trustee of a trust carries serious responsibilities and trustees are compensated for their time. 

Section 2309 of New York’s Surrogate’s Court Procedure Act sets forth how to calculate the amount of commission. Under the statute, Trustees receive  commissions on the amount of property paid out and annually. However, keep in mind that the trust agreement can override the statute. The creator of the trust (Grantor) and Trustee may agree to a different amount, or the Trustee can waive the right to commissions altogether.

The statute lays out that the Trustee is entitled to a commission of 1% of any trust principal paid out. In addition to the 1% commission on distributions of principal, the following fee schedule sets out the Trustee’s annual commissions: 

(a) $10.50 per $1,000 on the first $400,000 of principal 

(b) $4.50 per $1,000 on the next $600,000 of principal 

(c) $3.00 per $1,000 on all additional principal.

Take the simple example of a trust with $1 million dollars in assets that directs $200,000 be paid out to the beneficiaries upon the Grantor’s death. The Trustee is entitled to a $2,000 commission for the distribution and then $5,200 annually. The statute also provides for reimbursement for reasonable and necessary expenses.

The trustee can choose to collect the commission at the beginning of the year or at the end of the year. But once the Trustee chooses a time they must collect the commission at that time of year every year going forward. Any successor or substitute Trustee must follow the same schedule.

Pursuant to SCPA §2309(3), annual commissions must come one-third from the income of the trust and two-thirds from the principal of the trust. Unless the trust says otherwise, commissions are payable one-third from trust income and two-thirds from trust principal. The only exception is for charitable remainder unitrusts or annuity trusts. In such cases, the commissions are paid out of principal, not out of the annuity or unitrust payments.

When deciding what the Trustee’s commission should be, it is important to keep SCPA 2309(3) in mind. This is especially true when the only asset in the trust is the Grantor’s home. Until the home is sold and the proceeds paid out, the Trustee is not entitled to the 1% commission.  Likewise, if the home is not generating rental income, then the one-third of the trustee’s commission is not payable under 2309. This may not be important if the Trustee is a beneficiary, but there is no incentive for a non-beneficiary Trustee in this situation.

Determining how to calculate the correct commission owed a Trustee can be complicated. Consulting an experienced estate planning attorney can make the process much easier to navigate. These discussions should be had upon creation of the trust as well as when the Trustee starts managing the trust.

Nancy Burner, Esq. is the founder and managing partner at Burner Law Group, P.C with offices located in East Setauket, Westhampton Beach, New York City and East Hampton.

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By Nancy Burner, Esq.

Nancy Burner, Esq.

Skilled nursing care is a high level of care that can only be provided by trained and licensed professionals, such as registered nurses, licensed professional nurses, medical directors, and physical, occupational, and speech therapists. 

Skilled care is short-term and helps people get back on their feet after injury or illness. Skilled nursing facilities are residential centers that provide nursing and rehabilitative services to patients on a short-term or long-term basis. Examples of the services provided at a skilled nursing facility include wound care, medication administration, physical and occupational therapy, and pulmonary rehabilitation.

Generally, patients who are admitted to skilled nursing facilities are recovering from surgery, injury, or acute illness, but a skilled nursing environment may also be appropriate for individuals suffering from chronic conditions that require constant medical supervision. If you or a loved one is interested in using Medicare for skilled nursing, though, there are specific admission requirements set by the federal government:

• The individual has Medicare Part A (hospital insurance) with a valid benefit period. The benefit period will start from the date of admission to a hospital or skilled nursing facility and last for up to 60 days after the end of the stay.

• The individual has a qualifying hospital stay. This generally means at least three in- patient days in a hospital.

• The doctor has recommended skilled nursing care for the individual on a daily basis. The care must be provided by skilled nurses and therapists or under their supervision and should be related to the condition that was attended to during the qualifying hospital stay.

• The individual is admitted to a skilled nursing facility that is certified by Medicare. A skilled nursing facility must meet strict criteria to maintain its Medicare certification.

Usually, the skilled nursing care services covered by Medicare include the room charges, provided that it is a semi-private or shared room, meals at the facility, and any nutritional counseling, as well as costs of medication, medical supplies, medical social services, and ambulance transportation. It also covers rehabilitative services that are required to recover from the condition, such as physical therapy, respiratory therapy, and speech therapy.

Medicare generally offers coverage for up to 100 days of treatment in a skilled nursing facility. Note that if the patient refuses the daily skilled care or therapy as recommended by the doctor, then the coverage by Medicare may be denied for the rest of the stay at the skilled nursing facility. Many patients are advised that they will not get the full 100 days of Medicare benefits because they had reached a “plateau” or that they failed to improve. This is known as the Improvement Standard and was a “rule of thumb” used to evaluate Medicare patients. 

Applying the Improvement Standard resulted in the denial of much needed skilled care for thousands of Medicare patients. The denials were based on a finding that there was no likelihood of improvement in the patient’s condition. This standard ignored the fact that the patients needed skilled care in order to maintain their current state of health and to prevent them from deteriorating. More often than not, if the patient was not improving, Medicare coverage was denied. While this standard was widely used, it was inconsistent with Medicare law and regulations.

A court case brought by Medicare beneficiaries and national organizations against the Secretary of Health and Human Services (Jimmo v Sebelius) sought to change this. The plaintiffs argued that even though the term “plateau” does not appear in the Medicare regulations, it is this term that is often used and relied upon to deny coverage. The appropriate standard should be: will the covered services “maintain the current condition or prevent or slow further deterioration,” not whether the individual was showing signs improvement.

As a result of this litigation and the settlement on Jan. 24, 2013, patients should be able to continue receiving services provided by Medicare, even where improvement in the patient’s condition cannot be documented. However, the old standard continues to be used. Patients and their advocates should educate themselves on the correct standard to make sure coverage is not cut prematurely.

Nancy Burner, Esq. is the founder and managing partner at Burner Law Group, P.C with offices located in East Setauket, Westhampton Beach, New York City and East Hampton.