Medicaid abuse – looting of a different type

Medicaid case shows systemic abuse, who’s cheating who
Lou Ann Anderson
October 6, 2009
www.EstateofDenial.com

When a cheater cheats soon-to-be cheaters out of services designed to perpetrate cheating, is anyone involved a sympathetic figure?  A group of California seniors think so as they claim victim status at the hands of James A. Walker, an attorney who formerly specialized in coaching seniors on gaining Medi-Cal (state health insurance for the poor) eligibility while simultaneously preserving their assets.  A lucrative revenue stream has been created for estate planning attorneys in California, Texas and elsewhere as they find Medicaid (the federal program’s name) planning a service appealing to many here in the Land of the Gimme-Gimmes and the Home of the I-Want-Mores.  With health care still a hot topic and with long-term care costs consuming a significant portion of health care expenses, this is a subject worth giving some thought.

A Sacramento Bee article describes Walker’s situation as follows:

Handing out his card at nursing homes and blasting his message on radio, Roseville attorney and businessman James A. Walker made millions catering to senior citizens. His specialty: making them eligible for Medi-Cal, the state’s health insurance plan for the poor, while protecting their wealth.

Now Walker, 50, is in bankruptcy and in danger of losing his law license – the victim, he said, of an unjustified state investigation that cost him his fortune. He said he’s served his clients honorably but his reputation has turned “toxic.”

State officials and some clients say that toxic reputation is well deserved. They say Walker exploited seniors who feared having their assets devoured by the costs of nursing home care. What’s more, the state says Walker essentially cheated the Medi-Cal system by concocting an improper scheme to hide clients’ assets. He denies the allegations, but agreed to a civil settlement with the state last year.

Walker’s reputation sounds deservedly harmed, but what of the seniors who claim to have been “exploited”?  It’s an old-fashioned viewpoint, but once upon a time, people took pride in being self-sufficient.  Taking care of oneself and one’s family was common practice.  Today, however, factors like selfishness, laziness and a growing sense of entitlement seem to leave people fine with having someone else pick up their tab.

The seniors are reported to have not wanted their assets “devoured by the cost of nursing home care.”  Then don’t go to a nursing home – plenty of people don’t.  Or, invest in long-term care insurance.  That’s called personal responsibility and for centuries, it served our country well.

If a person doesn’t want to see their weekly budget consumed by food purchases, should they lie about their income to get food stamps?  Maybe that rent or mortgage payment is costing more than you’d like, should a person misrepresent their finances and apply for Section 8 housing?  What about that foreign-born person who doesn’t want to follow the rules for gaining citizenship?  Sounds like it’s time for a sham marriage.

All of these things constitute some degree of defrauding the government and Medicaid planning is no better.  It’s understood that technicalities are used to skirt certain rules.  Maybe that’s enough for some people to rationalize their acts, but the existence of these technicalities is the result of powerful lobbying interests who work at the behest of a legal industry always looking for ways in which to guarantee their own self-enrichment opportunities regardless the problems or burdens created for others.

Walker’s victims, though, have an explanation.  Here’s what was reported:

His financial collapse has stranded hundreds of seniors, in Sacramento and elsewhere, who paid him up to $20,000 apiece and never received his plan to help them qualify for Medi-Cal.

“We really need that money,” said Maureen Clark, 72, of Lincoln, who paid $17,000 for the Walker program with her husband, Joe. “We’re reasonably comfortable, but we’re not wealthy. This isn’t money we could afford to lose.”

Some clients want to see Walker back on his feet so he can deliver the services he promised. But it seems most are angry. About two dozen are suing, claiming they were victims of “elder financial abuse.”

Elder abuse – financial and otherwise – is a real problem in this country, but is this alleged “abuse” deserving of sympathy?  After all, if these folks had $20,000 to pay Walker, they are not necessarily candidates for whom this program was designed.  And as real abuse occurs and too often doesn’t get appropriate attention, it doesn’t need to be competing with a “no honor among thieves” story.

Walker’s tactics were described as such:

In an interview, Walker said “the vast majority, 90 percent” of his clients have already gotten what they paid for. As for the rest, he said he will make good at no extra charge – but only if he can keep his law license and erase his debts through bankruptcy.

Eligibility for Medi-Cal is at the heart of the Walker affair. Generally speaking, recipients can’t have more than $2,000 to qualify, but the rules are complex and there are numerous exceptions.

Walker, through a company he founded called Senior Care Advocates Inc. of Roseville, created a system under which clients gave away assets to make themselves eligible.

Yet state officials, advocates for seniors, and lawyers for some of his clients say Walker took advantage of customers’ fears and misconceptions about Medi-Cal eligibility, selling them an expensive program that many didn’t need.

In particular, clients say Walker scared them into thinking they’d lose practically everything – including their homes – if they needed Medi-Cal to pay for nursing home care. “Find out the best way to stop long-term care from wiping out everything you have!” read a message on Senior Care Advocates’ now-disabled Web site.

The reality is that the state would only confiscate someone’s home for reimbursement of Medi-Cal expenses upon the death of both spouses.  Bernice Yew, a California deputy attorney general, said that “Walker mainly targeted middle-class or lower middle-class seniors who didn’t need his program.”  With the bulk of their wealth being in their homes, she said that many clients “would have had little or no problem qualifying for Medi-Cal without Walker’s assistance.”

Walker seems to have effectively managed this group of clients by scaring people who then appear to have done no further research regarding their eligibility.  The San Francisco Bee article indicates some clients may have been legitimately eligible for Medi-Cal regardless of Walker’s direction, but for others, as he was selling a plan under which clients were directed to divest themselves of assets, that’s contrived eligibility, it may be illegal and it’s certainly dishonest.

The worst of Walker’s actions come with state officials reporting about a second group of clients with significant wealth for which Walker created a system that truly cheated the Medi-Cal program.

In a lawsuit filed last year, culminating a four-year investigation, the state charged that Walker told clients to “gift” assets to others without truly giving them away. Then he had them lie on their applications to Medi-Cal, claiming to be eligible.

While Walker’s clients want to claim victim status, two other groups of people are more deserving of this tag.  First, people who are genuinely poor.  These type programs are theoretically set up as a safety net for those in our society who truly are without resources and have no or limited means for income generation.  When people present bogus claims of “need,” they put at risk the availability of services for those truly requiring assistance.  As comedian Dennis Miller has said, “I’m willing to help the helpless, just not the clueless.”  Perhaps the selfish should also be added.

And secondly, if victims are desired, let’s add taxpayers.  In this context, Medicaid planning is a proclamation that a person is willing to let their friends, neighbors, and other taxpayers pick up the expense of their long-term care so they can retain assets for personal benefit or for that of their family.  Contrived Medicaid eligibility is a slap in the face to everyone goes to work on a daily basis and plays by societal rules including payment of taxes.  Occasional exceptions may exist, but for the most part, this is nothing more than picking your neighbor’s pocket via a governmental program.

Medicaid planning is the diversion of assets so as to feign eligibility for government health care designed for the weakest of our society. In Walker’s application, its goal appears to have usually been long-term health care (i.e., nursing home expenses).  EstateofDenial.com routinely discusses walker stalkers along with grave robbers, property poachers and asset looters who use probate venues and probate instruments like wills, trusts, guardianships and powers of attorney for Involuntary Redistribution of Assets acts that divert assets of the dead, disabled and incapacitated.  As Walker targeted the elderly, the term “walker stalker” seems to have found new usage and some double entendre action.

The bottom line is that our country is in an economic crisis with health care being a major point of contention.  Actions perpetrated by James A. Walker and his clients are harmful to specific people genuinely in need of Medicaid-oriented services, but whose access may be delayed or denied due to these contrived cases.  These actions also harm the taxpaying public as self-sufficient people with pride struggle to take care of their own families and maintain the increasingly onerous tax burden put on them.

This characterization of James A. Walker and his clients may be viewed as harsh, but it’s also quite real. Those who choose to cheat the system make it worse for all honest, hard-working Americans.  But that’s life today and it’s hard to see how we can sustain these attitudes or actions in the future.

More later from the Land of the Gimme-Gimmes and the Home of the I-Want-Mores.

Lou Ann Anderson is an advocate working to create awareness regarding the Texas probate system and its surrounding culture.  She is the Online Producer at www.EstateofDenial.com and a Policy Advisor with Americans for Prosperity – Texas Foundation.  Lou Ann may be contacted at info@EstateofDenial.com.

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