JULIE OSTERHOUT PROVIDES TIPS ON MANAGING YOUR MEDICAID CASELOAD
By Thomas J. Murphy, Esq.
Phoenix, AZ
Last year, NAELA began a series of telephonic seminars dealing with common management issues that feature prominent NAELA members discussing their systems and approaches. Tom Begley presented at the first of these seminars. Julie Osterhout presented at the second seminar.
Julie's presentation explained, in considerable detail, how she and her staff process a client's case file who is engaging in Medicaid planning and/or submitting a Medicaid application. Her materials, which exceeded 500 pages, included every form or letter that her office uses in the Medicaid process. Julie's presentation covered everything from the client's first phone fall to the closing of the file.
Julie is a strong proponent of the systems approach and delegation of duties that NAELA has been urging all of us to follow and implement. I was impressed by how much of the case load is handled by Julie's staff rather than by Julie herself. From what I could tell, Julie's involvement with the client is largely limited to the first meeting. At that meeting, Julie analyzes the client's situation and options. The important decisions are made at that first meeting. Julie then notates in the file what needs to be done and assigns the file to her paralegal. From that point on, Julie's involvement is in reviewing the staff's work.
This, of course, is what all of us would like to be able to do and is easier said than done. But Julie and her paralegal, Tricia Winterstein, did a great job of walking us through her process. They explained what each form is and when it is used.
One reason why Julie can front-end her involvement with the client is due to how the client file is organized. All clients must bring in their completed questionnaire two days before the appointment with Julie. This includes all the supporting documentation. A copy of the questionnaire is in the materials. But even more important is the cover letter that goes with the questionnaire, several versions of which are in the materials.
The cover letter accomplishes several important goals. First, it has five bullet points that explain the goals that can be accomplished by retaining Julie. Second, it stresses the need to thoroughly complete the questionnaire. One nice touch is a one-page checklist of twenty documents that must be brought in - this makes the 20 page questionnaire appear much less daunting. The cover letter reminds the client to review the twenty item checklist before they come in. I like this idea of a checklist because, even if the client does not completely fill out the questionnaire, the information that I need should be in these documents. Third, the cover letter gives the name and number of a staff person - and not the attorney - to call in the event of questions. And the letter refers to that staff person several times throughout the letter. This makes it clear from the outset to the clients that they are retaining a team to work on their case and no simply one attorney. Last, and certainly not least, the cover letter reminds the client that there is a $250 consultation fee and that three-fourths of any fee will be paid at that first meeting. I totally agree with Julie in charging a consultation fee. It is the single best management tool I have ever adopted since it weeds out the non-serious clients. It also gets the client in the proper mindset for the first meeting - come prepared to make important decisions, not the least of them being the payment of what-could-be a sizeable legal fee.
As mentioned earlier, the questionnaire is brought in two days before the first meeting. Copies of all the supporting documents are made with a reduction to 75% so that Julie can make notes in the margin. The file is then organized in an expandable file folder. Within this, each asset and income item has a separate folder to hold its documentation. The file is organized so that it corresponds in exact order to the Medicaid application. This organization of the file means that Julie has everything she needs and knows where the information is when advising the client at the first meeting. Julie's system seems to hinge on this and justifiably so.
There are several items in Julie's questionnaire that I really like. Julie's questionnaire asks them to disclose any medication the client is using rather than simply asking if the client's health is good. A client may be in good health but may be taking significant amounts or forms of medication that may alert us to a potential problem or issue. If the client is making a bequest to a charity, the questionnaire tells the client to obtain a IRC 501(c)(3) letter from the charity. The questionnaire also asks about safe deposit boxes, which are often overlooked and can be a real headache in the event of death or incapacity.
Julie has the client make the important decisions at the first meeting. This is great if it can be done but, for most of us, this is usually done at a follow-up meeting. Many NAELA members do not want to appear to be pressuring clients into a decision at that first meeting and they want them to discuss the matter with family members. But this can lead to procrastination by the client or to indecision due to conflicts within the family. Julie avoids this by insisting that at least one child be present at the meeting. This gives the client some reassurance that they are doing the right thing and it makes sure that at least one child understands the issues. And it gets the case moving.
The attorney's fee is agreed to at that meeting. Julie structures her fees in a unique way by having a minimum fee. Julie finds that quoting a flat fee, especially for a husband-and-wife situation, is not feasible. She has tried to flat-fee cases but found that the fee was never adequate. As a result, she periodically computes the amount of hours that she and her staff devote to a particular type of case. The average amount of those hours will serve as the baseline for the minimum fee for a given type of case. But the fee agreement includes a provision that the client will be charged an hourly fee if the hours exceed that baseline figure. Julie says this has worked very well for her but she repeatedly urged that clients must be informed of the additional charges well before they are incurred. The materials have several letters to this effect.
With this in mind, the client signs a one-page, carbon-duplicate fee agreement at the first meeting. Julie collects three-fourths of the fee at that meeting with the balance due in thirty days. A more detailed statement of fees is later sent to the client.
At this meeting, Julie makes use of another carbon-duplicate form for a "Steps To Take" list, with one part of stating what the client needs to do and another part indicating what the attorney needs to do. Julie has a five page checklist of topics for her to cover at the first meeting. She also has a ten page form that she returns to her staff. This form indicates which paragraphs should be included in the letter to the client explaining the estate planning (but not Medicaid) issues that will be addressed by Julie's firm. This letter explains the fee structure as well.
The next major step is drafting the Medicaid plan letter. This can be as long as - gulp! -- 38 pages. I have noticed a distinct split with NAELA practitioners as to whether this should be done. I do not prepare one. My clients are not going to read such a lengthy letter. It is intimidating and does not simplify the client's predicament. Clients know they have a problem and only care about getting it solved. This letter only tells them what you will do, not what has already been done. This only reminds the client that the problem still exists and that you have not made it go away, or at least not yet. This is not what clients want to hear.
On the other hand, this letter reminds clients of how complicated Medicaid issues can be. Julie sends this letter to at least one child so that the children can see for themselves what is being done and why. And it is an effective CYA tool for the lawyer. None of this meant as a criticism of Julie's methods. I am simply noting that there is substantial disagreement among practitioners on this.
I was surprised to learn that Julie's staff drafts the Medicaid letter, although it is based on Julie's extensive notations in the file. The letter discusses each asset and income item, the applicable rule and whether the asset will be counted. It states what documents were provided and any that need to be provided. Each asset and income item is given a number in the letter that stays with it for the remainder of the case. This makes it easier when talking with the client on the phone by referring to the number. This letter takes 8 to 12 hours for the staff to complete and for Julie to review. A two-hour meeting is then scheduled for a staff member to review the letter with the client and family.
One neat thing that Julie does is that she sends the client a three-ring binder once she has been retained. From that point on, all correspondence to the client is three-hole-punched for easy placement into the binder by the client who now has everything in one convenient place.
Once the Medicaid letter goes out, a seven page checklist is generated for the staff. It detailed who is doing what. It is printed on blue paper for ease of access.
Julie provided us with all the various forms and letters that come into the planning process at this point - everything from assignments to letters to IRA custodians to personal service contracts to income-only trusts. One letter that caught many attendees' attention was a letter that Julie sends out to the family once the client has entered a care facility. With that letter, Julie encloses a complimentary copy of the book, "Nursing Homes: Getting Good Care There", published by the National Citizen's Coalition for Nursing Home Reform. (The book can be purchased for $11.95 from the Coalition's website at http://www.nccnhr.org/.)
Julie also emphasized the importance of maintaining contact with the care facility. If a Medicaid application will be filed, the bookkeeper of the care facility is sent a letter explaining the Medicaid process, to include the estimated amount of the client's share of cost and how it is computed as well as a timeframe as to when the application will be accepted.
The remainder of Julie's presentation covered the application process. Julie's approach is to make the Medicaid office's work as easy as possible. Not only is all of the supporting documentation provided and organized to correspond with the application form, but Julie and her staff even do all of the computations (CSRA, MMMIA, etc) and provide a summary of the results for a quick overview. For instance, there is a listing of all asset categories indicated on the Medicaid form with a "yes" or "no" next to each asset for both the applicant and the spouse. This is on a separate green sheet. A similar "yes/no" summary is done for each item of income.
When the application process is completed, a lengthy closing letter is prepared. It explains how much the client will pay each month, the assets that can be kept and how this was computed. Much of the information is imported from the initial plan letter. It discusses the services that will and will not be provided by the Medicaid agency. There is also a fairly lengthy explanation of the estate recovery program. Julie then has a one-hour meeting with the client and family where she goes over the letter with them. They also discuss if there is any legal fee remaining to be paid and who should be the Medicaid representative from that point on. It is Julie's practice to have the client be the representative. A letter is prepared and sent to the Medicaid office indicating this. A copy of the closing letter is sent to any child who may want one.
I was pleased to see that Julie's system is very simple from a technological standpoint. These seem to be a series of documents simply linked together with a heavy use of global search-and-replace and stop codes. No need for a high-priced consultant to put this together!
Approximately 750 NAELA members phoned in to take part in the seminar. A two-hour (somewhat muffled) audiotape of the seminar and a three-ring binder with 500 pages of materials is available from NAELA for $125.00.
