What is PASRR?

I’ve been asked a couple of times this week about admission to adult care facilities and this thing called “PASRR”… what is it?  Well, let’s check it out at the NC Health and Human Services website​.

​As always, if you have questions about VA benefits, Medicaid, or Estate planning, please give us a call!  919-883-2800

North Carolina Pre-Admission Screening and Resident Review (PASRR)
Who is subject to PASRR Screening?
The PASRR is a required screening of any individual who is being considered for admission into a Medicaid Certified Nursing Facility or Adult Care Home regardless of the source of payment. Please see the specific informaition below for each program.


Federal law (42 CFR 483.128) mandates that states provide a Level I screen for all applicants to Medicaid-certified nursing facilities to identify residents with serious mental illness (SMI), mental retardation (MR), or a related condition (RC). For residents with no evidence or diagnosis of SMI, MR, or RC, the initial Level I screen remains valid unless there is a significant change in status.
Referred to as the Level I or identification screen, specific diagnostic and functional questions about an individual are raised to identify those persons with mental illness, mental retardation, and conditions related to mental retardation. The Level I and, when required, the Level II screens must be performed prior to nursing facility admission (excluding those situations discussed in Section II.D.ii of this manual).
The Division of Mental Health, Developmental Disabilities, and Substance Abuse Services (DMH/DD/SAS) PASRR Unit is the agency which will make final determinations regarding appropriateness of placement and need for specialized services and, in cases where specialized services are determined as necessary, the DMH/DD/SAS will arrange for provision of those services.


The Level II screening is triggered by evidence of a serious mental illness (MI), mental retardation (MR) or condition related to mental retardation (RC) as defined by state and federal guidelines. The purpose of the Level II screening is to determine if the individual has any special needs due to his/her identified condition that need to be addressed in a nursing facility or if those special needs are so significant that they cannot be met in a nursing facility and can only be met in a psychiatric hospital or a specialized facility dedicated to the care of the developmentally disabled. For those suspected of meeting state and federal PASRR criteria for MI or MR/RC, Level II screens must be performed both prior to admission (PAS) to assess for both NF placement appropriateness and specialized service needs.​

Happy Memorial day!

This Memorial Day, we pause and reflect on our freedoms, and on those whose sacrifice keeps us free.​  Not all our veteran friends survive their service, and it is especially painful for those who have lost a loved one.  But, for everyone who serves, and on behalf of those who love someone in our military … THANK YOU!​

Comments on VA proposed Rules Changes, Rule AO73

Today is the final day for posting comments.  There are a lot of very good ones in play, and we have no idea what the VA will do with it.  If they implement as proposed, it ​will be very hard for veterans who need pension to successfully apply.  And, there may be significant penalties for those who err in simply giving Christmas gifts to their grandchildren.  You can read more here ​and follow comments or receive email updates from the rule-making authority.​

The following is the comment we posted:

Regarding proposed rule A073:
Please consider refining changes to § 3.274 Net worth and VA pension.  As proposed, subsection (b)(1) defines net worth as “the sum of a claimant’s or beneficiary’s assets and annual income.”  In most cases, our clients spend all the funds they have for medical needs each month, and more as needed from savings or other investments.  Consequently, their annual income is never converted into spendable assets.  We would suggest that this rule does not result in a reasonable “net worth” value for determining eligibility, and propose that VA NOT count income as part of net worth.  Not counting income as an asset is similar in approach to that used by the Social Security Administration.
For similar reasons, we would suggest refining proposed rule § 3.276 Asset transfers and penalty periods.  The proposed rule in subsection (a)(5)(ii)(A) defines an annuity as “a financial instrument that provides income over a defined period of time for an initial payment of principal” and declares this to be a transfer for less than fair market value. However, this is a reasonable strategy for all people to employ … any asset when converted to a stream of income for a defined period less than or equal to the annuitant’s actuarial life accomplishes EXACTLY what the VA desires … the claimant is spending his or her assets on health care. If the annuity is irrevocable and actuarially sound, it is unreasonable for the VA to count this as a transfer for less than fair market value because it is meeting the goals of self sufficiency.  If this income is still not enough to fully fund health care costs, the claimant should be entitled to pension.  However, your proposed rule, as it is currently formulated, denies this method of self funding.  To the extent that the VA is unable to meet the demands for pension and delays cause claimants to suffer because they have spent all their funds while waiting on VA action, the rule unreasonably results in short term impoverishment and long term penalty.  Allowing the use of annuities which are sound and irrevocable would also be similar to the rules in use by the Social Security Administration.
We also work with a number of veterans and their families who provide regular charitable and family gifts to one another.  Most of our veteran clients are long-time members of churches and other organizations.  They are also grandparents.  Proposed rule 276, section (8)(c) “Presumption and exception pertaining to covered assets” establishes a presumption that in the “absence of clear and convincing evidence showing otherwise, VA presumes that an asset transfer made during the look-back period was for the purpose of decreasing net worth.”  It is not clear that a history of gifting would be sufficient to rebut the presumption.  We would propose that either this restriction is completely removed, or that examples of evidence include something like the following: “rebuttable means a history of giving to family, friends, church or other charitable organizations as defined by IRS regulations which may be demonstrated by checks or IRS tax records, or affidavits by recipients as to the nature of the gift.”  This relaxation of the rules would allow grandparents to gift to their children or succeeding generations while they are in a position to enjoy the benefits of such gifts.
Finally, many of our clients have homes that are in rural areas or were family farms.  Proposed rule § 3.275 “How VA determines the asset amount for pension net worth determinations” includes a provision that  land holdings be limited to 2 acres. Subsection (3) defines residential lot area to mean “the lot on which a residence sits that is similar in size to other residential lots in the vicinity of the residence, but not to exceed 2 acres (87,120 square feet), unless the additional acreage is not marketable.”  Technically, many of our rural counties in North Carolina​ do not allow subdivision into parcels less than a certain acreage.  In Chatham County, for example, the limit is 10 acres.  That means that a 19 acre parcel of land, with a home claimed as exempt, could be construed by a VA examiner to exceed the threshold and deny pension, even though the land could not be subdivided.  Perhaps this is also not “marketable”, but it would require that VA examiners be intimately familiar with rules for every county in the country or risk a significant increase in NOD’s for such purposes.  In addition, such a rule would be fundamentally opposed to continuing family inheritances, operation of family farms, and distribution of family wealth under long standing common law principles.  Further, the proposed rule is inconsistent with Social Security rules as well as Bankruptcy law which allows exemption of adjacent land.  We respectfully request that the limitation on acreage be removed.

Proposed changes to VA rules

The VA Pension benefit is available to veterans who have served during a period of war as defined by Congress, who meet certain income and asset limits, and who meet certain disability or medical thresholds.  On January 23, 2015, the Veterans Administration (VA) published a comprehensive rule that would amend 38 CFR Part 3.  Part 3, which involves changes to several sections, covers net worth, asset transfers, and income exclusions for needs-based benefits.  The stated objective is to respond to the GAO and to maintain the integrity of the system.

It seems clear from the proposed changes that maintaining the integrity of the system really means closing “loop-holes” and reducing veterans’ short-term access to benefits.  The amount a veteran could ultimately receive is not changing, but the path to get there is harder and longer.

So, how will the VA approach this change?  In this set of proposed rules (if they become law as written), it will be met through changes to net worth and income thresholds, reductions in use of asset transfer approaches, and changes to the way medical expenses can reduce the net income.

Limitations on Net Worth

Proposed rule 38 CFR § 3.274 would impose a limit on net worth which is a hybrid of the processes used by the VA and by Medicaid.  This new net worth limit is equal to the maximum community spouse resource allowance for Medicaid purposes on the effective date.   To this is added annual income, so every dollar of annual income is now added to the asset levels, even though veterans and their spouses clearly have to actually *spend* the income they receive to survive.  Recognizing this, the proposed rules then deduct certain expenses from the asset amount, similar to the method used today to compute the “income for VA purposes.”  This procedure is explained and demonstrated in 38 CFR §3.274(f)(5).  The numbers seem to all be based on year-end information.   The primary residence is still excluded, even if the claimant is not residing there, but personal mortgages on the property are not considered.

Changes to Asset Transfers

Proposed rule 38 CFR § 3.276 addresses the transfer rules and penalty periods that would be imposed for transfers made prior to applying for VA pension.  Significantly, the VA will impose penalties on all transfers to qualify.  Today, some veterans are able to irrevocably give assets to family members, transfer assets to a trust, or purchase income-producing annuities with assets in order to reduce asset levels to qualify.  Under the new rules, NONE of these methods will be suitable for planning.  Further, the look-back period for such transfers is 36 months.  Returning the assets transferred will remove the penalty if returned within one month of application.  The penalty is not based on the cost of care (as used by Medicaid) but on the expected pension rate, and can last for as long as ten years.  Even more onerous, the penalties are added and then applied as of the most recent transfer date.

One exception to the asset transfer rules are for a transfer by a veteran or spouse to an irrevocable trust established on behalf of a child (e.g., a “special needs trust”).  This will only work under specific conditions.

Medical Expenses

Under proposed rule 38 CFR § 3.278(c), medical expenses for VA purposes are those that are “medically necessary or that improve a disabled individual’s functioning.”  These are similar to allowed expenses under the current rules.  Caregiver costs may be deducted only for licensed providers and only for support for ADLs (basic self-care activities … bathing or showering, dressing, eating, toileting, and transferring), but if rated “Housebound” or “Aid & Attendance” then a more liberal set of caregivers and services may be provided (independent living activities, such as shopping, food preparation, housekeeping, laundering, managing finances, handling medications, using the telephone, and transportation for non-medical purposes).  Certain eligible family members can provide care (and be compensated) if care is prescribed by a physician.  Rates for care givers must be under the rates published in the MetLife Mature Market Institute Market Survey of Long-Term Care costs.

This seems to expand the services available that can be used to reduce income as compared to the current rules.  Independent living facility costs are still not covered.

The Effect on Planning for Pension

The new rules are harsh, in particular around the penalty periods.  The presumption that all transfers are made with the intent to qualify for Pension might mean t​​hat ALL gifts for family birthdays, Christmas, travel, and so on will be countable and penalized.  Consequently, proper planning and record-keeping is critical.  If these rules become law, many veterans who could have received benefits immediately will be unable to apply for several years.

If you have questions, please refer to these resources, or stop in to ask us directly:

The proposed rules​

Current Rules – Computation of Income​
Current Rules – Computation of Net Worth​
Current Rules – ​Exclusion from Income​

VA Proposes sweeping changes to benefits…

An interesting and potentially disturbing movement is afoot in the legislative world.  The VA is an agency, and is chartered by Congress to act under mandates given by Congress.  To that end, agencies must come up with rules that affect how their mission is carried out.  For the VA and the new proposals about net worth and transfers, this involves benefits.

Currently, a proposed rule change​ could, or would, dramatically decrease access to benefits for veterans who have current high net worth.  ​Here is the link to the Federal Register information… Federal Register​ .  The summary of the rule change says “The proposed regulations would establish new requirements pertaining to the evaluation of net worth and asset transfers for pension purposes and would identify those medical expenses that may be deducted from countable income for VA’s needs-based benefit programs.”

The intent is to “preserve the integrity” of the system and funding.  You can read this many ways, but some rule-makers think that veterans should not be able to transfer assets out of their names to meet current eligibility requirements.  They also would impose a look back similar to that in place for Medicaid.  A sanction periods would commence with the transfer, and as proposed it is somewhat more drastic than the similar period for Medicaid.

We are considering the rights and needs of our clients as we review these proposals.  To the extent necessary, we will offer our thoughts to our various representatives  as to the viability and necessity of the proposals.  I’m not convinced that the rules changes are as bad as some make them out to be, but I’m reading the rules changes and letters.  Final feedback must be provided by March 24, 2015.

We will update our clients with our opinions and recommendations.  For now, it is certainly clear that planning ahead, like we do for Medicaid, is a good idea.  Although, to be clear, the VA is already  becoming more stringent about the movement of assets in order to qualify for the benefit​.

We advise that you come to our office for a brief review and possible quick action to secure your benefits.

Remembering Pearl Harbor

On December 7, 1941, the US was drawn into war.  This year marks the 73rd anniversary of the attack, and there were several events around the US.  One, in Washington DC, had Adm. Howard speak.

​”As the years stretch, the stories of every sailor, soldier, Marine, airman, nurse or citizen who was at Pearl Harbor grow more precious, and we use this anniversary to retell them,” U.S. Navy Adm. Michelle Howard, vice chief of Naval Operations, told the 400 people gathered at the hallowed ground between the Washington Monument and the Lincoln Memorial. “We understand that the collective toughness of the American people, our survival, and the eventual success of this country, is due to them.”

According to USA Today, “though more than 16,000,000 Americans served in the Second World​ War, only 1,711,000 are alive today, according to the U.S. Department of Veterans Affairs. Of those, an average of 555 pass away each day.”

We appreciate the sacrifice​ of those who serve to keep us free.

For more information, please see the USA Today article​, The Naval History page​, or a survivor’s story​.

VA Choice program provides non – VA options for some vets

Beginning on November 5, 2014, the new Veterans Access, Choice and Accountability Act gives many veterans the option to receive non-VA health care rather than waiting for a VA appointment or traveling to a VA facility.  Are you eligible for this new choice?

From the VA website, here are the criteria:

  • You have been told by your local VA medical facility that you will need to wait more than 30 days from your preferred date or the date medically determined by your physician
  • Your current residence is more than 40 miles from the closest VA health care facility
  • You need to travel by plane or boat to the VA medical facility closest to your home
  • You face a geographic challenge, such as extensive distances around water or other geologic formations, such as mountains, which presents a significant travel hardship​

​​Many of our clients fit the first category.  If any of these pertain to you, give the VA a call at: ​​866-606-8198​

​But, remember, non-VA care is only covered by the VA for medical needs which have been approved by your VA physician. The VA will schedule an appointment for other medical needs, but will only cover the cost of care related to your VA-approved health needs.  So, you still have to work with the VA and your VA physician.  But, if the next available appointment is more than 30 days out (see the criteria), you might have a non-VA ​choice.

Why an “analysis” prior to applying for VA benefits?

Our clients come to us for a variety of services and products.  Not everything we do is as simple as a “document” because every case really is unique.  It takes planning, and listening, and discussion to understand the issues and help plan the best way to address the client’s (or the family’s) needs and wants.  For example, not every client can apply to the VA for disability.

For our Veteran benefit clients, proper planning means that we first review the three “M’s” – Military,Monetary, and Medical.  A good applicant must meet several qualifying criteria.  As for the first point, failure to have served during certain periods of war will invalidate the application.

Then, it isn’t always exactly clear what benefit is needed.  Sometimes, the client’s disability might or might not be service connected.  The “analysis” process includes determining what the disability is, how it came about, how it affects the client’s life, and how she or he should be compensated.  We review medical records as necessary and gather the right documents and doctor reports.  For many, the disability can’t be linked to service, or proof of in-country service in Vietnam is lacking. In most cases, we can help sort that out. We also review the client’s medical needs to see about qualification for a higher level of benefits, such as “Aid & Attendance.”

Finally, while service connected disability has  no monetary qualifier, the VA does have some criteria for making their pension decisions. They look very closely at the finances and they are in contact with the IRS and Social Security.  Obtaining VA Benefits for pension means that the veteran needs help due to low net income.  We analyze the finances and can often make specific suggestions that improve the likelihood of a successful application.

We believe that a careful analysis is great insurance for your future application, if you decide to go ahead and apply.  Some applications have simple mistakes that limit or prevent qualification – these may be avoidable with the help of an experienced attorney.  In addition, some clients need to coordinate Medicaid and VA benefits.  That is an area that needs careful and dedicated attention.

We perform an analysis​ of our client’s situation prior to your deciding whether to file an application.  Whomever you choose to assist you with your VA benefits application should do the same.

Veterans Day thanks

Today is the celebration of Veterans Day.  It hasn’t been all that long that this day has been dedicated to honor our nation’s veterans … only since 1954.  It was originally celebrated as Armistice​ Day following WWI and expanded over time to honor veterans from all wars.

My dad was a Naval aviator and officer and often told me stories of his trips, flying submarine hunters, and hair-raising take-offs and landings on carriers.  As a child we visited his ship once, CVS-18 / USS Wasp, and I could imagine the terror I would feel at sea but deeply awed by the heroics of those who would engage in such dangerous service.  I miss my father on these kinds of days and I wish that I could have shared more stories about his service to me and to our nation.  His service is one of the reasons why I serve veterans today in my practice.

When you think about your veteran family members and loved ones today, and all days, remember to thank them for serving, and consider how many stories there are to be heard.  Take time to listen!

​​Thank you, Veterans!  And God bless America!

Will planning change for Medicaid asset recovery?

When an Elder Law attorney works with  a client to plan how to reduce the frighteningly high costs of long term care, the goal is to help that client develop plans that result in the best care, using the best resources, for as long as possible, using every legal means at our disposal.  Planning tools used by many Elder Care attorneys often includes provisions for careful management of your assets and placement of those assets in different vehicles, including trusts.  We work with other trusted professionals, using several tailored strategies.  Some strategies have the effect of reducing your countable estate which can address both tax issues and qualification for public benefits, such as Medicaid.

In some states, Medicaid​ agencies have expanded powers to reach into your estate after your death to recover the funds they spent on your care.  ​It is an exciting and ever-changing see-saw battle between the legislators and advocates for planning.  As the advocates find a way to plan (which saves our clients some of their assets), the state legislatures find ways to reduce it (which saves Medicaid some of the costs).

Recent significant changes in Wisconsin took effect in August 2014.  These changes include the ability of Wisconsin Medicaid to reach into Family trusts and other non-probate assets to recover their costs.  “Probate assets” means those assets you own which are given to your heirs in your Will, such as the house, personal possessions, and funds or stocks that you own at your death.  “Non-probate” assets transfer directly to your beneficiaries and generally include such things as trusts, “pay on death” (POD) accounts, IRAs with beneficiaries, and life insurance, just to name a few common ones.   Reaching into non-probate assets is a new approach because those had traditionally been assumed safe from recovery.

The Wisconsin rules are interesting because they change the playing field in very important ways.  North Carolina does not have such far-reaching recovery , yet, but that could change over the next few years.  If you have had a plan set up in the past, we advise that you think about seeing your Elder Law attorney to check in.  If you are wondering about when to plan, our best advice is do it sooner rather than later!

Which method will protect your assets most effectively is hard to know without a crystal ball, but an Elder Law attorney can help you make the best plans that meet your needs … now and in the future.

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