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Feds Clarify New Rule For Special Needs Trusts

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Special needs trusts have a new level of flexibility and federal officials are working to ensure that state Medicaid directors understand the implications.

Under a law passed late last year, individuals with disabilities can for the first time establish special needs trusts for themselves.

The shift, designed to make saving money easier for those with disabilities, is significant. Previously, trusts had to be created by a third party.

Now, federal Medicaid officials are offering guidance on what the change means for state programs.

“A trust established on or after December 13, 2016, by an individual with a disability under age 65 for his or her own benefit can qualify as a special needs trust, conferring the same benefits as a special needs trust set up by a parent, grandparent, legal guardian or court,” wrote Brian Neale, director of the Center for Medicaid and CHIP Services in a letter to state Medicaid directors this month. “The other defining features of a special needs trust remain unchanged.”

To qualify as a special needs trust, Neale said that a trust must contain the assets of an individual with a disability who’s under age 65, be created for that person’s benefit and include a provision that any remaining assets be repaid to the state at the time of that person’s death up to the value that the state provided in medical assistance.

In many cases individuals with disabilities face a cap on the assets they can have in their name in order to qualify for Medicaid and other government programs. Special needs trusts are one of a few ways that individuals with disabilities can accrue more assets without losing eligibility.

Allowing individuals to form trusts for themselves “supports the independence of individuals with disabilities,” Neale noted in the guidance.

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Feds Clarify New Rule For Special Needs Trusts

TRUTH ABOUT NURSING HOMES!!

Guardianship company closed, U.S. Marshals Service says

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The U.S. Marshals Service announced the closure of Ayudando Guardians Inc. offices on Thursday, noting that the company had about 1,400 clients when a federal grand jury indicted its two principals and the company on charges of embezzling client funds in July.

Previous reports estimated the number of guardianship or conservator clients in New Mexico at less than 200, but it wasn’t known how many others were receiving representative payee services in which Ayudando handled monthly or regular client benefits from agencies such as the U.S. Department of Veterans Affairs and the U.S. Social Security Administration.

Those representative payee agreements don’t have to be approved by a court.

The Marshals Service has been under federal court order to oversee operations of the company since the July 11 federal indictment of Ayudando president Susan Harris and chief financial officer Sharon Moore. The two were charged with 28 counts of conspiracy, fraud, theft and money laundering charges arising out of an alleged scheme to embezzle funds from client trust accounts. They have pleaded not guilty.

The two women are alleged to have siphoned more than $4 million from clients’ representative payee accounts and savings or money market accounts to support lavish lifestyles for themselves and family members. The company served hundreds of clients with special needs or who are disabled.

The Marshals Service, meanwhile, has been transferring Ayudando clients to new agencies, with the help of state district court judges.

But earlier this month, the transfer process was described by one private agency professional as a “nightmare.”

One of Ayudando’s former clients was profiled by the Journal Aug. 10 because of his living conditions and his inability to find out the status of his guardianship case by trying to telephone the Marshals Service.

Peter Grotte-Higley, 81, is a Holocaust-era survivor whose living arrangements were controlled by Ayudando, which also handled his monthly pension check and finances as his court-appointed conservator. He had complained that the debit card Ayudando provided for his incidental expenses had a zero balance in recent months.

Grotte-Higley wanted to go in person to the Ayudando offices at 1400 Central SE, and he accepted an offer from two Journal reporters to drive him there on Aug. 8. But at the last minute, a manager at his Northeast Heights boarding home intervened and asked a Journal reporter to leave.

Grotte-Higley now has an Oct. 2 hearing set in his guardian/conservator case in state district court in Albuquerque, according to a court docket sheet, the only public record available by law in guardian/conservator cases.

The docket sheet shows that two new attorneys have entered appearances in his case before Judge Denise Barela-Shepherd, but there’s no indication of a new temporary guardian. Grotte-Higley, who has been an Ayudando client since January 2016, is still living in the same home.

Meanwhile, a press release from the U.S. Attorney’s Office in New Mexico on Thursday provided new details about the Marshals Service’s role in winding down Ayudando operations.

The Marshals Service was appointed to operate the business “to ensure that its assets were not improperly spent or removed, and that the interests of Ayudando clients were protected as the prosecution of the criminal case moves forward.” That court order also required the Marshals Service to submit under seal to the court a report on its findings within 45 days.

The vast majority of Ayudando’s clients have been transferred to new temporary guardians, other service providers and/or new representative payees, the release says. And those still awaiting transfers will receive temporary services from other providers.

Three New Mexico guardianship companies under contract with the New Mexico Office of Guardianship – including CNRAG, Inc., Tierra Alta Guardianship Services LLC and Quality of Life Guardians LLC – will provide temporary or interim services to some former Ayudando clients.

Private clients for whom Ayudando maintained guardianship, medical power of attorney accounts, private trust accounts or conservator services will receive services from Ascending Hope LLC for guardianship services. Bridge to Success Inc. will provide financial services until the courts can appoint new guardians, if required, the press release says.

Although Ayudando’s offices are closed and transfers of clients have been processed, the Marshals Service “remains responsible for managing Ayudando’s business affairs under the magistrate’s order” and “remains committed to ensuring continuity of service for Ayudando clients,” according to the release.

Ayudando, which also had offices in Mesa, Ariz., was created in 2004.

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Guardianship company closed, U.S. Marshals Service says

Shoals man charged in insurance scheme that allegedly took millions from elderly customers

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Ronald Powell
ATHENS, Ala. — A Muscle Shoals man has been arrested and charged with insurance fraud and financial exploitation of an elderly person, in a case potentially involving millions of dollars, according to the Alabama Department of Insurance.

Ronald Warren Powell, 55, turned himself in to Limestone County Sheriff’s Office Wednesday and was released on bond.

A source with the Alabama Department of Insurance  told WHNT News 19 Powell gained control of millions of dollars under false pretenses from elderly victims who thought they were buying insurance policies, but instead the money went to Powell, according to sources from the Alabama Department of Insurance.

Other victims claimed they were unaware their signatures had been forged and their funds diverted to Powell, according to the insurance department source.

Powell’s Florence-based attorney James Irby said Powell denies any wrongdoing and “absolutely denies” any claim that he gained control of millions of dollars from the sale of false insurance policies. He said those claims go well beyond what is alleged in the Limestone County indictment.

“We are very confident in our position and we certainly are going to aggressively defend against these charge,” Irby said.

Powell had previously been barred from selling financial securities in Alabama in a 2015 action by the Alabama Securities Commission.  Powell had served as chairman and CEO of the Tom Jones Insurance and Financial Services Group in Muscle Shoals, according to the Alabama Securities Commission.

He was indicted on one count of first-degree insurance fraud and one count of financial exploitation of an elderly person.

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Shoals man charged in insurance scheme that allegedly took millions from elderly customers

Judge nixes $1M request for lawyer fees in case worth $125K

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SCRANTON, Pa. (AP) — A federal judge has angrily rejected a request for more than $900,000 in legal fees in a Pennsylvania insurance case that saw the attorneys' client receive $125,000.

The (Scranton) Times-Tribune (http://bit.ly/2vxFyza ) reports U.S. District Judge Malachy Mannion found the fee request so "mind-boggling" and "outrageously excessive" that he's planning to report the attorneys to a Pennsylvania disciplinary board that investigates complaints of attorney misconduct.
Lead attorney Michael Pisanchyn defended the request saying he and another attorney worked hard on the 2013 lawsuit to hold an insurance company responsible for delaying payment of a $25,000 car crash claim and won the client another $100,000 at trial.
Mannion says the bill is based on 2,583 hours, or the equivalent of 323 eight-hour days spent on the case.

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Judge nixes $1M request for lawyer fees in case worth $125K

Divided Supreme Court Rules on Ward's Right to Marry

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Jennifer Suzanne Carroll
The certified question before the Florida Supreme Court seemed simple, but has far-reaching consequences regarding the rights of incapacitated people.

The case puts Florida laws governing legal guardianships in the spotlight, and how a probate court's removal of some rights might affect a ward's remaining freedoms. It came as Florida legislators re-examined the guardianship system, long plagued by accusations of corporate greed and policies designed to benefit guardians instead of wards and heirs.

The dispute focused on a ward of the court's right to marry, and asked justices: If permission is required to wed, does marrying without that approval render the marriage void or voidable?

Answering that question Thursday, the justices needed to determine the legislators' intent in crafting a state statute to govern people for whom the courts have taken responsibility through guardianship programs.

That task divided the high court.

In the end, the majority ruled that a ward didn't need to get court approval before marrying, but did need to have the court later ratify that marriage.

"In other words, the ward's ability to enter into a valid marriage depends on court approval," Chief Justice Jorge Labarga wrote for the majority in a decision issued Aug. 31.

The ruling stemmed from a bid by Glenda Martinez Smith, a woman looking to reinstate her marriage to Alan J. Smith, who had been deemed legally incapacitated. Palm Beach Circuit Judge David French annulled the marriage because Smith wed without court approval.

Marriage is a fundamental right, but courts have the power to invalidate the marriages of people who become wards of the court because of severe physical, mental and other disabilities that prevent them from making their own decisions.

Smith lost the right to contract, but not the right to marry, when he became the court's ward. His wife challenged French's decision, but a state appellate court couldn't agree on whether the trial court's annulment deprived Smith of his "fundamental right to marry."

Just as with the high court, the majority and dissenters in the Fourth District Court of Appeal disagreed on the "effect" of the statute.

"This is something that was sorely needed in our state," Martinez Smith's attorney, Jennifer Suzanne Carroll of the Law Offices of Jennifer S. Carroll in Palm Beach Gardens, said. "This opinion is a major step forward in protecting the fundamental rights of incapacitated persons in Florida. … It enforces the Legislature's intent to uphold the incapacitated person's rights to the greatest extent possible."

The closely watched Florida Supreme Court case drew amicus curiae briefs from the Florida Bar's Real Property, Probate & Trust Law Section, its Elder Law Section and the Academy of Florida Elder Law Attorneys.

"It is absolutely now crystal clear that a marriage is invalid if it was entered into with a person who at the time was subject to a guardianship and had their right to contract taken away. The court did clarify that the marriage can only be legitimized by seeking subsequent court approval," said longtime Miami probate lawyer Michael Schlesinger of Schlesinger & Associates, who was not involved in the litigation. "This ruling bolsters the intent of the guardianship law to protect the incapacitated from financial abuse. However, the system in my opinion still needs further revamping by the state Legislature and prosecution of offenders by law enforcement to ensure that the generation of fees never outweighs the best interests of the wards."

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Divided Supreme Court Rules on Ward's Right to Marry

Charleston woman allegedly faked mother’s will, pocketed $1 million

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Tracie D. Wilson
Police say a Charleston woman created a fake will for her dying mother, in order to cut her siblings out of an estate worth more than $1 million.

Tracie D. Wilson, 44, allegedly colluded with several others to create a fraudulent last will and testament for her mother, Joyce M. Johnson, according to a criminal complaint filed in Kanawha County Magistrate Court.

Johnson, who was 77 years old, was hospitalized in June 2015, suffering from “multiple serious medical conditions” and was “lethargic and suffering from a decline in mental status,” according to the complaint, filed by State Police First Sgt. S.E. Wolfe.

At the time, Wilson and her co-conspirators had discovered that Johnson’s estate was worth about $1 million. The estate was supposed to be divided equally between Johnson’s four children, according to the complaint.

Johnson died on June 27, 2015. After that date, according to the complaint, Wilson met with one of her co-conspirators, forged her dead mother’s signature and had the fake will certified by a notary public.

Two other people served as witnesses for the fake will, according to the complaint. Neither of them actually saw the will signed, and one of them knew the will was fake.

After the fake will was signed and notarized, Wilson filed it with the Kanawha County circuit clerk’s office. The will was made public on Aug. 6, 2015, according to the complaint.

Wilson then received “approximately $1,107,858.84,” which was the estimated appraisal of her mother’s estate at the time.

Police say the allegations against Wilson are all supported by statements from co-conspirators and witnesses, text messages, bank statements and other evidence.

Johnson was retired vice-president of J.E. Johnson Funeral Home, a firm her and her late husband, J.E. Johnson, established in 1960. After his passing, the Kanawha City funeral home was sold to Chad and Billie Harding, which they renamed Harding Funerals & Cremations, according to Johnson’s obituary.

Wilson was arraigned in Magistrate Court Tuesday. She is charged with financial exploitation of an elderly person, protected person or incapacitated adult; obtaining money, property and services by false pretenses; conspiracy to commit a felony; forgery of public record, certificate, return or attestation of court or officer; and computer fraud. All are felonies, and Wilson could face more than 40 years in prison and fines of more than $20,000 if convicted of all charges.

She was being held Tuesday at the South Central Regional Jail on a $25,000 or 10 percent cash bond.

Full Article & Source:
Charleston woman allegedly faked mother’s will, pocketed $1 million

Former Exeter lawyer pleads not guilty to elderly exploitation

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 BRENTWOOD -- A former Exeter lawyer charged with financial exploitation of a 71-year-old woman pleaded not guilty and waived his arraignment Friday, according to state Assistant Attorney General Brandon Garod.

Thomas U. Gage, 57, of Newfields, was indicted in Rockingham Superior Court last month on five counts of financial exploitation of an elderly, disabled or impaired adult, the state attorney general’s office announced in a press release.

The indictments allege Gage, through the use of undue influence, acquired possession or control of five credit cards allegedly belonging to the woman. The total amount of the alleged exploitation is $87,165 occurring between January 2015 and January 2016.

Gage is a former attorney who practiced in Exeter, the attorney general’s press release stated. He was disbarred in 2016 for unrelated reasons.

The maximum penalty for each indictment is 7½ to 15 years in state prison and/or a fine of $4,000.

The case is being prosecuted by Garod, assistant attorney general in the office’s Elder Abuse and Exploitation Unit. Garod said a dispositional conference will be scheduled in Rockingham Superior Court in a month.

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Former Exeter lawyer pleads not guilty to elderly exploitation

Ayudando audits pointed to financial impropriety

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The red flags were evident five years before top executives of one of New Mexico’s largest commercial guardianship companies were indicted for allegedly pilfering millions of dollars from client accounts to finance lavish lifestyles.

Independent audits and tax records submitted by Ayudando Guardians Inc. to the state Attorney General’s Office in 2011 and 2012 showed evidence of financial irregularities at the firm.

The audit reports showed “employee advances” of nearly $80,000 over a two-year-period – described as loans from client accounts to employees – including Ayudando president Susan Harris and chief financial officer Sharon Moore. Most of the money, the audits showed, was eventually repaid, but not all of it.

“There is no justification for any organization to borrow money from clients,” said Wendy York, who chairs the state Supreme Court appointed commission that is studying ways to improve New Mexico’s guardianship system.

Independent audits are required by state law of charitable organizations, like Ayudando, that received more than $500,000 in revenue each year.

It’s unclear whether anyone at the office of then-Attorney General Gary King reviewed Ayudando’s filings or did anything in response. Those are the last filings by Ayudando on the AG’s Office’s charity search website.

Efforts to reach King, who left office at the end of 2014, weren’t successful on Friday.

The Attorney General’s Office’s charity search website shows that Ayudando has been delinquent in filing its required annual registration every year since 2012, including the last two years under King’s successor, Attorney General Hector Balderas.

Asked about his agency’s oversight, James Hallinan, a spokesman for Balderas, told the Journal, “We are aware of these delinquencies which are within the scope of the Office of the Attorney General’s investigation into potential civil violations of New Mexico charities statutes.”

Hallinan said Friday that, under state law, “certain documentation is required with each application for registration or renewal. While we review every submission, the content and level of scrutiny on these documents varies.”

Federal prosecutors last year launched an investigation into Ayudando after several Ayudando employees went to federal law enforcement with complaints about mismanagement of client funds. Company filings show its clients included veterans, the elderly and the homeless.

Important lessons

York said during a commission meeting Friday that lessons learned from the Ayudando case are important for the commission as it compiles its initial recommendations for the Supreme Court, which are due by Oct. 1.

Harris and Moore were indicted in July on 28 counts of federal conspiracy, money laundering, and fraud related to an alleged embezzlement scheme of client funds that dates back at least a decade.

So far, federal investigators have identified about $4 million diverted from client accounts. The company had been in operation since 2004.

The diverted funds helped support a “lavish lifestyle” for Harris, Moore and family members who allegedly spent client money on vacation cruises, tickets to the Final Four basketball tournament, luxury vehicles, furniture and other personal expenses, according to federal documents.

Records obtained by the Journal show that Harris and Moore also bought a $42,500 suite at the Pit last basketball season, but it isn’t clear whether client funds were involved.

Harris and Moore have pleaded not guilty to the charges and have been released pending trial.

Before the U.S. Marshals Service closed Ayudando’s doors last week, the company was the guardian and/or conservator for about 185 clients, some who received state-funded services. It also had private pay clients and had managed finances for another 1,200 clients, including representative payee accounts, according to the U.S. Attorney’s Office.

York told the commission she has consulted with a forensic accountant who has offered advice on how the courts can provide better oversight of guardians and conservators who handle client funds, including hiring an accountant to review audits and annual filings required of guardians and conservators.

As a retired state district judge, York said she believes it would be most appropriate for the accountant or auditor to be “an arm of the court” so he or she could notify the court if discrepancies are found in audits or reports. That could lead to the removal of a guardian or conservator, she added.

Annual reports

New Mexico is one of 26 states that require yearly independent financial audits of charitable organizations.

The law seems to imply that the AG’s Office is responsible for reviewing the documents, in that it requires a charitable organization to correct any deficiencies in an annual report “upon notice by the AG’s office.”

It isn’t clear why Ayudando would not have filed an annual audit after 2012 – if in fact it did not.

But York said the accountant recommended the state modify existing law to make it clear as to what agency will review the required audits and annual reports.

Asked by commission member Sen. Gerry Ortiz y Pino, D-Albuquerque, whether fiscal audits “really catch theft,” York responded that “you can catch them when they are borrowing money from clients or make loans. You can’t catch everything but you can certainly catch some things.”

Ayudando audits

The two independent audits filed with the AG’s Office noted that Ayudando hadn’t complied with generally accepted accounting procedures and added, “We were unable to satisfy ourselves by means of other audit procedures on the correct allocation of the account to the Foundation and the client.”

The Ayudando audit report for 2011 noted $72,321 in “employee advances” with only $23,788 in client reimbursements.

“Formal terms of the advances were not documented in agreements, therefore, interest was not charged nor was there a stated maturity date,” the audit stated. The advances in 2011 were completely paid off in 2012, the audit stated.

A different independent auditor noted in a report for the 2012 tax year that “advances were made in previous years to various employees including the President and Secretary/Treasurer of Ayudando.” Harris took a $38,565 advance, and Moore took $10,894 – amounts the report stated were repaid.

But Harris received an additional advance of $8,636 in 2012 that hadn’t been paid by the end of the year, the audit noted.

Ayudando supplied a 990 IRS tax form to the AG’s Office in 2012 showing “director advancements for 2012 at $62,846, with total due to clients at $18,937. The audit also found Ayudando had a note payable “due to the President’s parent” with an outstanding balance of $19,919.

As president, Harris in 2012 was paid an annual salary of $138,230. Moore was paid $125,453 a year.

York said the auditor she consulted also recommended guardian/conservators keep separate bank accounts for each client account, otherwise they are “very susceptible to comingling.”

York told the commission a full-time auditor who answered to the courts could provide better oversight by regularly reviewing audits and randomly reviewing required annual reports to the court. She added that annual reports – the chief method of oversight of guardianship or conservatorship cases – are currently “pretty anemic.”

Full Article & Source:
Ayudando audits pointed to financial impropriety

Nursing Home Compare not good enough, Harvard experts say

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The Centers for Medicare & Medicaid Services' Nursing Home Compare is suffering from “considerable” knowledge gaps that may make it harder for consumers to make informed decisions about their post-acute care, according to some experts.

In a blog posted Tuesday in the Health Affairs Blog, Harvard researchers Brian E. McGarry, Ph.D., and David Grabowski, Ph.D, argued that the tools currently at hospital patients' disposal for choosing a post-acute provider are “often complicated, incomplete, and potentially misleading.”

Nursing Home Compare, the website meant to inform consumers about local long-term care providers, is lacking in information regarding short vs. long nursing home stays, facility features or amenities, care coordination or the “culture and care philosophy” of the provider. The tool also suffers from dissemination issues, McGarry and Grabowski wrote, with some patients and hospital staff unaware that it's available.

“Patients and providers alike need to know that help is available, and barriers to accessing these websites during the potentially stressful and hectic time of discharge planning need to be minimized,” the blog reads.

To improve Nursing Home Compare the authors recommend first separating the measures regarding short- and long-stay residents so patients can “identify the quality metrics most pertinent to their situation.”

They also recommend adding new information to the comparison website, like building age, availability of private rooms, photos of the facility, and reviews from residents or their family members to offer data more in line with consumers' concerns. 

“Although some of this information is subjective, consider that even individuals researching hotels have easy access to useful data of this sort,” McGarry and Grabowski wrote. “Certainly patients considering where to spend weeks or months of important recovery time are entitled to similar resources, and recent evidence suggests that consumers are already turning to social media platforms such as Facebook to post facility feedback and obtain first-hand perspectives.”

Bringing such information Nursing Home Compare would allow CMS to oversee its exchange in “a controlled and transparent manner.”

The last recommendation detailed in the blog post would be connecting long-term care consumers to both Nursing Home Compare and the Home Health Compare tool. Advertising alone wouldn't be enough, the researchers wrote. Instead, CMS may have to consider making it mandatory for Medicare patients to be informed of the tools during their discharge planning process, and that they have web-enabled technology to access the sites from their hospital rooms.

Those Nursing Home Compare changes will be crucial as acute and post-acute care providers become more integrated, McGarry and Grabowski said.

“If consumers are to play an active role in the evolving postacute care choice environment, it is essential that they be well-positioned to make good decisions,” the post reads.

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Nursing Home Compare not good enough, Harvard experts say

OIG Issues Stark Warning to Skilled Nursing Facilities: Potential Abuse or Neglect of Residents Receiving Emergency Room Services is Being Underreported to Law Enforcement

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Introduction

On August 24, 2017, the Office of Inspector General (“OIG”) of the Department of Health and Human Services (“HHS”) issued an “Early Alert” that disclosed the preliminary results of its ongoing review of abuse of Medicare beneficiaries in skilled nursing facilities.  Specifically, OIG determined: (i) that a significant number of incidents of potential abuse or neglect of nursing facility residents receiving emergency care has not been reported to law enforcement as required under the Elder Justice Act; and (ii) that the Centers for Medicare & Medicaid Services (“CMS”) lacked adequate procedures to ensure proper reporting.  The Early Alert, which includes a list of suggestions for immediate remedial action to be taken by CMS, highlights the increased scrutiny that nursing facilities will face for failing to comply with the Elder Justice Act’s reporting obligations, and points to proactive measures nursing facilities can take, now, to mitigate risk of any enforcement action. 

Requirements to Report Abuse or Neglect of Residents of Skilled Nursing Facilities

The “Elder Justice Act,” adopted with the passage of the Affordable Care Act (“ACA”) effective March 23, 2011 (see 42 U.S.C. § 1320b-25), requires “covered individuals” -- including an owner, operator, employee or agent, of a long term care facility -- to [A] report to HHS (or the State Survey Agency) and one or more law enforcement entities any reasonable suspicion of a “crime” against any individual who is a resident of the facility; and [B] make such report within two hours after forming the suspicion that the resident suffered serious bodily injury, or within 24 hours if there is no serious bodily injury. 

Failure to make the required reports could result in civil monetary penalties of up to $300,000 and exclusion from participation in the Medicare and Medicaid programs.  Id.  Although the law went into effect in 2011, the corresponding regulations requiring skilled nursing facilities to develop and implement conforming policies and procedures do not go into effect until November 28, 2017.  See 42 C.F.R. § 483.12(b).

Separately, skilled nursing facilities must also report resident abuse, neglect, mistreatment, injuries of unknown origin, and misappropriation of resident property to the administrator of the facility and the State Survey Agency.  See 42 C.F.R. § 483.12(c); see also N.Y. Public Health Law § 2803-d and 10 N.Y.C.R.R. § 81.1 et seq.

OIG’s Audit

Although its review of skilled nursing facility abuse reporting is not yet complete, OIG issued its preliminary audit results through the Early Alert because of the “importance of detecting and combating elder abuse.”

Audit Methodology and Findings:  To conduct this audit, OIG reviewed hospital emergency room records of 134 residents of skilled nursing facilities transferred to the hospital, in which the emergency room staff assigned one of 12 primary diagnoses codes utilized for Medicare reimbursement claims that indicate potential abuse or neglect (e.g., adult sexual abuse, adult physical abuse, adult maltreatment).  OIG also reviewed the State Survey Agency records for each of the relevant skilled nursing facilities.  Based on these records, OIG found that, for 28% of these cases, there was no evidence that the underlying incident had been reported to law enforcement.  Notably, OIG assumed that every emergency room visit associated with one of the 12 “abuse” diagnostic codes was an incident reportable under the Elder Justice Act.  OIG, however, did not independently verify whether there was actual abuse or neglect of these individuals. 

Based on its findings, OIG concluded that CMS lacks procedures to enforce the Elder Justice Act, and specifically to ensure that incidents of abuse or neglect of nursing facility residents are being properly reported to law enforcement.  In particular, OIG noted that CMS does not “match” hospital Medicare claims for emergency room services with claims for nursing home reimbursement, to identify instances of potential abuse or neglect.

CMS acknowledged that it has not identified any instances in which a covered individual failed to make a report to law enforcement.  In its defense, CMS informed OIG that it has not taken any enforcement action yet because HHS has not yet delegated enforcement authority to CMS.
  
Furthermore, CMS stated that it has recently updated the State Operations Manual, used by the State Survey Agencies, to reference the applicable Elder Justice Act regulations, with an effective date of November 28, 2017. 

OIG’s Recommendations to CMS

In the Early Alert, OIG provided the following “suggestions” for CMS to take immediately:
  • Implement procedures to compare hospital Medicare claims for emergency room treatment with nursing home claims to identify incidents of potential abuse or neglect and to periodically provide the details of this analysis to the State Survey Agencies for further investigation of compliance with Elder Justice Act reporting obligations;
  • Continue to work with HHS to secure the authority to impose the civil monetary penalties and exclusion of providers pursuant to the Elder Justice Act;
  • Promulgate additional regulations, if necessary, to impose penalties for non-compliance with the reporting requirements;
  • Impose penalties when appropriate; and
  • Direct State Survey Agencies to refer suspected violations of the reporting obligations to CMS for appropriate action.

Lessons for Skilled Nursing Facilities

  • With the issuance of the Early Alert, the mandate to report to law enforcement, suspected crimes against residents, including abuse and neglect, will continue to be a compliance focus of OIG and will likely be an enforcement priority for CMS going forward. Nursing facilities need to revisit and, to the extent they have not done so already, update their policies and procedures to comply with the reporting obligations contained in the Elder Justice Act -- before the applicable regulations go into effect on November 28, 2017.
  • OIG focused its attention on skilled nursing facility residents receiving emergency room services. Skilled nursing facilities should likewise be particularly focused on resident transfers for emergency care for potential incident reporting pursuant to the Elder Justice Act.
  • OIG equated any emergency room visit associated with one of the 12 “abuse” diagnosis codes to be reportable under the Elder Justice Act. However, at the time of an emergency room transfer, nursing facilities in some cases may not have identified evidence of potential abuse of a criminal nature, and would not have the benefit of the emergency room physicians’ evaluation when the resident arrives at the hospital.  As a matter of course, skilled nursing facilities should consider requesting records of the emergency room diagnoses and, whenever one of the 12 codes has been assigned, presume that the incident should be reported to law enforcement if it has not been already, unless the evidence clearly indicates the coding is mistaken and no abuse took place.

Bottom Line:  Nursing facilities -- and “covered individuals” -- that fail to heed OIG’s alarm may be putting themselves in regulatory jeopardy.

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OIG Issues Stark Warning to Skilled Nursing Facilities: Potential Abuse or Neglect of Residents Receiving Emergency Room Services is Being Underreported to Law Enforcement

Question raised about conflict of interest for lawyers

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ALBUQUERQUE, N.M. — Should New Mexico attorneys petition the court for people seeking professional guardians or conservators when they also represent the prospective guardian or conservator company in other matters?

That’s among the sticky ethical questions that guardianship commission Chairwoman Wendy York has posed to the state’s chief disciplinary counsel, William Slease, for an opinion.

York announced at a Friday commission meeting in Albuquerque that her research on guardianship issues has raised questions about potential conflicts of interest and other ethical issues that can arise in cases involving third-party corporate guardians and conservators.

“I wanted to know whether our current rules address this issue,” York said.

Attorneys play a major role in guardianship/conservator cases, which are cloaked in secrecy under state law. All records, except for a brief court docket sheet summarizing actions in the case, are sealed. All hearings in the case are sequestered.

To file a guardianship request, a petitioner, often a family member, typically needs an attorney. Judges often rely on the petitioner and his or her attorney to recommend a guardian or conservator for appointment.

At times, those companies’ attorneys also represent the petitioner.

A petitioner’s attorney, for example, might be reticent to challenge or try to remove a guardian or conservator on behalf of a client if that same lawyer also represents the guardianship company in other cases. Sometimes clients aren’t told about such potential conflicts beforehand and find themselves having to hire a new attorney.

Adds York, now a private mediator, “I think the guidance (from the chief disciplinary counsel) might be helpful.”

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Question raised about conflict of interest for lawyers

Couple ‘churns' thousands from elderly clients

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LAGRANGE, Ga. – The Livingstons have a picture-perfect family of five on Facebook—but the couple smiling in the photos with their three children have a secret, and it’s a secret that authorities said, have ripped off thousands of dollars in fraudulent insurance policies.

Independent insurance agent Amy Livingston, 34, and her husband, 48-year-old Matthew, were arrested Wednesday morning for exploitation and fraud scheme. A scheme that, Troup County’s Insurance and Fire Safety commissioner Ralph Hudgens’ said, likely reeled in more than $100,000.

Matthew, a former insurance agent himself, posted to his Facebook page: 0% LUCK. 100% HUSTLE.

It’s this alleged hustle, however, that landed him and his wife in jail, thanks to a consumer tip.

During a six-month investigation by the commission’s fraud division, the LaGrange, Ga., couple allegedly found that Amy was using the identities of Matthew’s former clients to create applications for fake life insurance policies.

According to Hudgens, those fraudulent applications collected $11,453 in advanced first-year commission payments through four different insurance companies. But, Hudgens said that he believes the duo has racked up more than $100,000 in their scheme.

“My fraud investigators discovered that the couple worked together to illegally obtain approximately $11,453 in commission fees by issuing fraudulent documents to insurance companies,” Hudgens said. “With additional evidence still coming in, we expect the amount stolen to increase to well over $100,000.”

This type of fraudulent activity is known as “churning.”

“[Churning is] taking insurance policies, existing policies, canceling them and then re-writing new policies so they could get an insurance commission off writing the new policies… converting these policies for their own personal use without the people that were being covered without their knowledge,” Hudgens said.

The Livingstons are accused of churning life insurance policies of their elderly clients—at least seven so far, but there could be more victims. Those clients who have had fake policies created in their name, may have further insurance issues down the road.

“Unfortunately, they are elderly and they're going to have a hard time getting new policies, maybe their health situation has declined and they are not eligible to get coverage again,” Hudgens said.
His agency, he said, is going to the insurance companies, asking them to restore the policy holders’ previous policies.

“Otherwise, what do they do? It puts these people, the victims, in a very, very precarious position, because they don't know whether they're going to have coverage if something happens… This is really a tragedy,” Hudgens said.

Troup County Sheriff’s deputies arrested the couple Wednesday morning at 9 a.m., in their driveway and took them to the Troup County Jail.

Amy was charged with seven counts of insurance fraud, five counts of exploitation of the elder, 12 counts of forgery and seven counts of identity fraud. Matthew was charged with three counts of insurance fraud and two counts of exploitation of an elder.

Amy, who has been licensed as a life and health insurance agent since 2010, faces possible suspension or revocation of her license. Matthew, however, has not been a licensed insurance agent since November 2016.

If found guilty, insurance fraud is a felony and the couple could face two to 10 years and a fine up to $10,000.

The investigation is ongoing. The couple remains in the jail. No bond has been set.

If you suspect an insurance fraud or if you were one of the Livingstons’ clients, call to verify your coverage with the insurance company listed on the policy, or contact Hudgens’ Consumer Services Division at (800) 656-2298.

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Couple ‘churns' thousands from elderly clients

Keokuk woman sentenced to probation in theft case

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Laura Hawkins
QUINCY -- A Keokuk, Iowa, woman must pay $18,000 in restitution for stealing from an elderly family member living in a Quincy nursing home.

Laura Hawkins, 56, was sentenced Wednesday by Judge Charles Burch in Adams County Circuit Court to 30 months of second-chance probation, a form of probation where a conviction will be removed from a person's record if probation is successfully completed. The terms were agreed to by Assistant State's Attorney Anita Rodriguez and Hawkins' attorney, Curtis Dial.

A hearing was expected to Wednesday to review restitution, but both sides agreed to the $18,000 in restitution. The probation will end early if Hawkins pays the restitution, and Burch agreed to let her transfer probation to Iowa.

Hawkins was found guilty of theft in a stipulated bench trial last month before Burch. Two counts of financial exploitation of the elderly were dismissed.

After Hawkins' arrest in February 2016, the Quincy Police Department said it was notified by Sycamore Healthcare of a 77-year-old resident who was possibly being exploited by a family member with power of attorney for the resident. An investigation found that several thousand dollars had been misused.

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Keokuk woman sentenced to probation in theft case

See Also:
Keokuk woman convicted of theft from elderly relative

Keokuk woman convicted on theft charge

Editorial: Red flags should matter in NM guardianship cases

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Asleep at the wheel.

That’s a polite way to describe oversight by the courts and the Attorney General’s Office of New Mexico’s scandal-rocked guardianship system over the years – a point hammered home by the revelation that independent audits of Ayudando Guardians Inc. in 2011 and 2012 pointed to clear financial impropriety. That’s impropriety in the form of top company executives “borrowing” tens of thousands of dollars from client accounts.

“There is no justification for any organization to borrow money from clients,” said Wendy York, who chairs a commission appointed by the state Supreme Court to recommend ways to improve the state’s guardianship system.

The two independent audits filed with the AG’s Office also noted Ayudando hadn’t complied with generally accepted accounting procedures. The 2011 audit noted $72,321 in employee advances, with only $23,766 in repayments during the audit year.

But despite the fact auditors red-flagged Ayudando – and despite being delinquent in filing its annual AG registration every year since 2012 – there is no indication the AG’s Office did anything, and judges in New Mexico went right on appointing the company as guardians and conservators in charge of the lives and finances of people who had been declared incapacitated and unable to care for themselves.

Perhaps that’s because the system isn’t set up in a way that the needed information gets to those judges – some of whom previously have defended the system and dismissed complaints as coming from “emotional” family members.

It was York who asked a forensic accountant to look at Ayudando’s audits and then relayed findings to the commission. The AG’s Office says it is reviewing the issues.

And Ayudando was slick. A company representative even showed up at one of the commission hearings chaired by York to defend the system by pointing to the fact that – get ready for this – it was audited every year by the state.

Ayudando had more than 176 guardianship or conservator appointments outstanding in Bernalillo County District Court in July when federal law enforcement filed a massive money laundering and fraud indictment that named the company and its two top officials – president Susan Harris and chief financial officer Sharon Moore. Federal investigators have identified more than $4 million in client money that was allegedly diverted to finance a “lavish lifestyle” by the two women and their family members. The U.S. Marshals Office says the company had about 1,400 clients, some of whom received financial management or representative payee services.

One federal agent in a search warrant affidavit described the company as “permeated by crime.”
But there is hope.

York says there are important lessons to be learned from the Ayudando debacle, including the need for an accountant who reports to the court. Improving the annual forms required of guardians/conservators to include more detailed financial information would also help.

Those are among the many reforms under consideration by York’s commission.

And York has asked the state’s chief disciplinary counsel to weigh in because her research has raised questions about potential conflicts of interest and other ethical issues surrounding lawyers that can arise in cases involving third-party corporate guardians and conservators. That’s an important step in a system in which professional guardianships involve a relatively small group of insiders.

Going forward, the courts can make some meaningful reforms. Others will require legislative action. But in the aftermath of the Ayudando case, one thing is clear: We can no longer accept being asleep at the wheel.

Full Article & Source:
Editorial: Red flags should matter in NM guardianship cases

How to leave no doubt about how you want your money distributed when you’re dead or incapacitated

Federal court dismisses lawsuit filed by woman accused of elder exploitation

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BENTON – An Illinois woman charged with elder exploitation has lost her bid to sue Madison County after the U.S District Court for the Southern District of Illinois dismissed her lawsuit with prejudice.

Cynthia M. Crawford-Green held the health care power of attorney for her uncle, Carl Dickerson, and was the executor and beneficiary according to the terms of his will. He died in 2010. She was charged with exploitation of an elderly person and a warrant was issued for her arrest. The order states she was pulled over in Missouri in January.

According to Illinois Legal Aid online, “The Elder Abuse and Neglect Act assures that local agencies will be funded by the Illinois Department on Aging in order to offer help to persons age 60 and older who may be abused, neglected, or exploited by family, household members, or caregivers. Any person who suspects the abuse, neglect, or financial exploitation of such a person may report this suspicion to the designated local agency.”

Crawford-Green filed suit against Madison County over allegations that she had been deprived of her constitutional rights pursuant to pursuant to 42 U.S.C. § 1983. The complaint alleged that the people of Madison County wanted her to pay her uncle’s medical bills after his death, and there was no probable cause to issue the warrant.

She sought a reversal of her state court sentence, plus compensatory and punitive monetary damages. After her arrest, she lost her job, lost her home to foreclosure, and her property was seized, the order states.

On Aug. 17, the case was dismissed by the district court. Judge J. Phil Gilbert ordered that the plaintiff would recover nothing and the case was dismissed on the merits with prejudice.

In its decision, the court notes that “The named defendant in this case is 'people of Madison County Illinois.' In order to obtain relief against a municipality or other local government unit, a plaintiff must allege that the constitutional deprivations were the result of an official policy, custom, or practice of the local government.”

Crawford-Green failed to prove her case, the court ruled.

“Plaintiff has not alleged that the deprivations she complains of were made pursuant to an official policy or custom, and has provided no facts that would make such an allegation plausible. Therefore Plaintiff has not adequately pleaded a claim against Madison County,” the memorandum and order stated.

Full Article & Source:
Federal court dismisses lawsuit filed by woman accused of elder exploitation

Alzheimer’s patient was sexually abused, state says. Now nursing home says it’s closing

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Eagle Crest nursing home
A large Carmichael nursing home that was targeted for years by government regulators for poor quality care has decided to voluntarily close after state inspectors determined that a female resident was sexually abused multiple times by another resident at the facility.

For 37 months, the Eagle Crest nursing home, formerly known as Carmichael Care & Rehabilitation Center, was on the federal government’s consumer-beware list of troubled facilities. Other facilities nationwide came and went from the list, but Eagle Crest remained, supposedly operating under stepped-up scrutiny intended to nudge it back into compliance.

In June, the state had had enough.

Documents obtained late Friday from the California Department of Public Health show that the state recommended this summer that federal regulators drop the facility from its Medicare provider rolls, a drastic action that strips a nursing home of its critical government funding.

Instead, the nursing home’s owner acted first.

In a business move that will upend the daily lives of dozens of patients and their families – and significantly reduce the number of skilled nursing beds in the Sacramento region – Pennsylvania-based Genesis HealthCare Inc. recently notified the state it would voluntarily close Eagle Crest in October.

The company took issue with the state, though, noting that the 126-bed facility had self-reported the allegation of sexual abuse in February. The company disputed the state’s findings that an “immediate jeopardy” citation was warranted or even that the facility was out of compliance at all.

A finding of immediate jeopardy, known as an IJ, is a heart-stopper for nursing home operators and can carry among the steepest penalties. Immediate jeopardy is called when a provider’s noncompliance has caused, or is likely to cause, serious harm or death to a resident.

In its investigation, the state found that the female patient, who had Alzheimer’s disease, had been fondled, kissed and abused by a male resident who was known to be a risk for inappropriate sexual behaviors and had a “history of inappropriate touching of a confused patient,” state documents show. Even so, the male resident, who the state report described as “cognitively intact,” was not receiving one-on-one monitoring, the report says.

The facility’s failure to safeguard the woman had placed all 36 female residents at risk for sexual abuse, the state found.

The facility had self-reported to the state that the man had been found in February in the woman’s room, pulling up his pants while she lay fully undressed in her bed, documents show.

On June 22, the state notified Eagle Crest administrator Harumi Hurrianko it was recommending that the Centers for Medicare and Medicaid Services terminate its provider agreement. A month later, a lawyer for Genesis notified the state it would voluntarily close, calling the immediate jeopardy citation the “straw that brings us to make this difficult decision.”

The closure of one of the region’s largest skilled nursing facilities startled elder care advocates this week. They say they are worried about the loss of beds and the stress placed on vulnerable residents suddenly being forced to relocate, possibly out of the county. The single-story beige building is located along a busy stretch of Fair Oaks Boulevard, about a mile west of the boundary between Carmichael and Fair Oaks.

Over the years, Eagle Crest has had its share of notoriety, including a rash of state citations and fines, numerous federal deficiencies and generally poor ratings. Some recent inspection reports show the facility has been written up and penalized for inadequately treating or preventing bed sores, failing to self-report possible abuse and not attempting CPR on a resident who wished to be resuscitated.

But none of the health care advocates contacted by The Bee late this week was aware of the sexual abuse allegations that preceded the company’s decision to close.

“This really caught us off-guard,” said California’s long-term care ombudsman, Joe Rodrigues, reacting to the closure news. He noted that the local ombudman’s office first learned about the company’s closure plans around mid-August.

“This is going to have a big impact; it’s such a large facility,” Rodrigues said. “Where are we going to find homes for these people? And why are they closing this facility in the first place?”

A spokeswoman for Genesis Healthcare, Jeanne Moore, would not say why the facility was closing. But Moore offered assurances in an email that the facility is coordinating the closure with the California Department of Public Heath and “will comply with the requirements for closing a nursing center.” Closure will be around Oct. 20, she said.

“We will continue our day-to-day care and operations during this process until our last patient or resident is transferred and the center is closed,” she stated. “We will take all reasonable precautions to eliminate or reduce any negative effects that may result from the transfer.”

She specifically cited three other facilities owned by Genesis in Northern California that could take residents from Eagle Crest: American River Care Center in Carmichael, Creekside Center in Stockton and Willows Center in Willows.

Two of those facilities have had their own alleged quality issues, with both American River and Willows Center receiving “below-average” ratings in an ongoing statistical analysis of California nursing homes by the University of California, San Francisco. The database, which examines numerous aspects of facilities from staffing ratios to complaints to deficiency trends, was created to help consumers make long-term care choices.

Eagle Crest currently has an overall “poor” rating, while Creekside Center was deemed “superior” in the ratings available on the CalQualityCare.org website.

Of the 59 nursing homes in the four-county region, only 15, or about a quarter, have more licensed beds than Eagle Crest. Genesis informed the California Employment Development Department that 72 jobs also would be lost in the closure.

A spokeswoman for the California Department of Public Health, which licenses and inspects nursing homes, said the state approved the closure and relocation plan on Aug. 4.

Under California law, if 10 or more residents are likely to be moved due to a change in a nursing home’s operation, the facility must submit a proposed relocation plan to the state and cannot proceed until it’s approved. Whenever homes close, advocates worry about possible “transfer trauma,” in which the upheaval and separation from family, friends and known caregivers can cause serious harm and even death to fragile residents.

“People who live in nursing homes are extremely vulnerable,” said Michael Connors of California Advocates for Nursing Home Reform, based in San Francisco. “Separating them from everyone and everything they care about is cruel and traumatic.”

Transfer trauma has become a hot topic in California. Outrage erupted last year in Humboldt County over the prospect of widespread transfer trauma when the state’s largest nursing home owner, Shlomo Rechnitz of Los Angeles, threatened to close three of his facilities in the remote region. Before Rechnitz significantly modified his plan, some patients were facing the possibility of moving hundreds of miles away.

As a result, Assemblymen Jim Wood, D-Healdsburg, introduced a bill that would increase the amount of advance warning that residents and others receive prior to a nursing home closure. AB 275 was signed by the governor on Friday.

Even before the Eagle Crest shutdown, the Genesis chain of nursing homes had been facing widespread regulatory and public-relations problems.

In June, the U.S. Department of Justice announced that Genesis HealthCare Inc. would pay the government nearly $54 million to settle six federal lawsuits. The government alleged that companies and facilities acquired by Genesis had submitted false claims to government health care programs for medically unnecessary services, and “grossly substandard nursing care.”

A 2014 Bee investigation found that nursing homes operated in California by Genesis HealthCare received complaints of abuse at seven times the statewide average. The company is headquartered in Kennett Square, Pa.

The closure of Eagle Crest illustrates the difficulty regulators have in pushing operators to make improvements amid accusations of substandard care – even when they are publicly shamed by government inspectors.

Eagle Crest spent more than three years on the “Special Focus Facility List” maintained by the U.S. Centers for Medicare and Medicaid Services. The list is a kind of improve-or-else warning program aimed at getting operators to correct serious problems, or lose their ability to collect government funding.

Special Focus Facilities are surveyed more frequently and, if problems persist, are subject to possible fines and other penalties, including termination from the Medicare and Medicaid programs.

On the latest list, updated Aug. 17, only one nursing home out of 118 nationwide that were publicly identified had been on the list longer than Eagle Crest.

“It’s a token enforcement program that’s done a poor job of turning around dangerous nursing homes,” said elder-care advocate Connors. “The question is, what’s wrong with the system if the worst of the worst are under all this scrutiny – then why aren’t they getting better?”

California, with 1,241 licensed skilled nursing facilities, currently has seven nursing homes on the feds’ consumer-beware list. One, in Fairfield, has “shown improvement,” the list reveals, while another in Los Angeles is said to have recently graduated.

The other California homes, including Eagle Crest, are defined by the government as having “serious quality issues” and have been assigned to the program to “stimulate improvements,” according to the government’s web page on its Special Focus Facility Initiative.

Read more here: http://www.sacbee.com/news/local/article170894757.html#storylink=cpy

Full Article & Source:
Alzheimer’s patient was sexually abused, state says. Now nursing home says it’s closing

Tonight on T. S. Radio: Mary Bush & Genevieve's Nightmare

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Mary Bush continues to fight to free her mother Genevieve Bush from the ravages of the fraudulent guardianship her mother was sentenced to in 2011.

Chester County Pa Orphans Court continues to extract Genevieve's wealth to feed court appointed profiteers while disregardining multiple petitions filed by Mary for her mother's health care needs not being met. In January 2016 after Mary got her mother out of the nursing facility via 911 with broken bones and untreated heart problems, the nursing home and for profit guardian immediately retaliated by calling Mary a trespasser. Mary who lives about 15 miles from the locked in facility where her mother is, has not seen her mother since January 2016. Mary has since discovered and reported to Chester County Adult Protective Services that her mother again has not seen her cardiologist for a year and a half.

After filing another petition to the court to get her mother to her doctor, the court issued an order stating "I will not micromanage (Guardianship Services of Pennsylvania) care decisions absent compelling reasons". The court also ordered that Mary who is her mother's legal health care agent is to " cease and desist" "scheduling appointments for her mother". If guardianship is about protecting vulnerable older adults, then who is the Court really protecting?

LISTEN to the show live or listen to the archive later

See Also:
NASGA: Genevieve Bush, Pennsylvania Victim

Doctors pressured this woman to die by euthanasia. One year later she is much better.

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Alex Schadenberg
Executive Director - Euthanasia Prevention Coalition
Candice Lewis

Last month Candice Lewis's mother received a disappointing response from the local hospital after sending an official complaint about being pressured by doctors who wanted Candice to die by euthanasia.

Mother upset after doctor urged her to approve assisted suicide for her daughter with disabilities.

An article by Stephen Roberts that was published in the Northern Pen newspaper on August 28 explained that Candice is doing much better after receiving excellent care from a hospital in St Johns's Newfoundland. The article reported:

According to her mom, Sheila Elson, Candice hasn’t been having any seizures, is now able to feed herself, walk with assistance, use her iPad, and is more alert, energetic and communicative since her stay in St. John’s. 
“She’s back to about where she was five or six years ago,” says Elson. 
After a two-week hospital stay, Candice, along with her mother, walked her sister Glennis down the aisle at her wedding in Dildo in August. 
She’s been able to do all this despite the fact that in 2016, doctors suggested that Candice might be dying. 
In September of that year, a doctor at Charles S. Curtis Memorial Hospital in St. Anthony had also suggested to Elson that physician-assisted death could be an option for Candice. 
What is satisfying her these days is her daughter’s health. Since returning to St. Anthony earlier this month, Candice hasn’t required a visit to the hospital. 
Elson believes Candice’s condition has improved because she is now on fewer medications.
Legalizing euthanasia (MAiD) gives physicians the right in law to lethally inject their patients. The doctors attitude toward Candice's "quality of life" were based on negative and discriminatory attitudes towards the lives of people with disabilities. The doctors thought that Candice was better off dead.

Full Article & Source:
Doctors pressured this woman to die by euthanasia. One year later she is much better.
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