Medicaid Fraud: Who’s in on the Act and How They’re Getting Away With It

A single mom with five kids living in Brooklyn with no income on record and struggling to make ends meet sounds like an eligible candidate for government subsidy programs. She signs up for the SNAP (Supplemental Nutrition Assistance Program) and Medicaid for herself and her children and gets government assistance to help cover her rent.

But in reality, she’s married, her husband has an all-cash business, which allows her to rake in thousands of dollars a month via welfare programs and remain undetected by the government.

Todd Spodek says this scenario is common, and that people try to milk entitlement programs all the time.

Spodek, an attorney at New York City-based Spodek Law Firm, represents fraudsters like the client he described above, when they finally get busted for Medicaid fraud. The defense attorney says he sees the “crème-de-la-crème” of Medicaid fraudsters, and that New York City is one of the biggest hubs for both Medicaid and Medicare schemes in the nation.

“There are savvy individuals out there—I see clients get married under religious law and not under New York state law, and they wind up scamming the government time and time again,” he says.  “In New York, we are knee-deep in fraud.”

A National Concern

The federal government is projected to lose $19.6 billion in “improper payments” under the Medicaid program. Accurate fraud figures can be hard to calculate since  improper payments aren’t necessarily fraudulent--they could be due to an error either by the government or recipient. Fraud estimates for fiscal year 2014 are up from last year’s $17.4 billion, but down from 2010’s $22.5 billion estimation of improper payments.

Federal Medicaid Spending is projected to be $298 billion in 2014, and Medicare is projected to be $603 billion. The SNAP program cost $79.9 billion in 2013.

The federal government estimates it loses nearly $60 billion a year to both fraud and waste within its Medicare program. The White House requested $389 million to fund the Department of Health and Human Services’ Office of the Inspector General in an attempt to better curb waste in the 2104 budget.

Earlier this week, the Departments of Justice and Health and Human Services touted its beefed up efforts to combat health-care fraud nationwide. The team recovered $4.3 billion in taxpayer dollars in 2013, and $19.2 billion over the last five years. Both the FBI and DOJ were not available for interview at press time.

And just last week, the Washington D.C. U.S. attorney’s office announced the largest health-care fraud takedown in the history of the District. The multi-year effort led to more than 20 arrests and schemes involving millions of dollars in fraud, kickbacks and false billings in the home health-care services field throughout the nation’s capital.

Ron Machen, U.S. attorney for Washington, D.C., says there were more than 200 enforcement agents spread out across the region, and were tipped off to the scheme when certain agencies requesting 300% more than other Medicaid beneficiaries over the past several years.

“We were wondering what the reason was for such a skyrocket in growth,” Machen says. “We used wires, cover agents and beneficiaries to uncover them.”

And what they found was eye-opening, he says. The investigation busted personal care assistants misrepresenting the amount of time they spent with beneficiaries.

“The reason it was ripe for fraud is that the beneficiaries would fill out bogus time sheets and submit them to home care agencies,” he says. “They would say they were being seen by assistance for up to eight hours a day, when the personal care assistants were never seeing them.”

The beneficiaries were elderly, disabled and low-income, he says, and recruiters would offer them kickbacks of $200 a week and coach the patients on what to say if someone asked about their work.

Eligibility and Expansion under the Affordable Care Act

The Affordable Care Act expanded Medicaid eligibility requirement to those making up to 133% of the federal poverty level, or about $15,850 a year. The law leaves it up to states as to whether or not to expand their Medicaid programs—25 states and the District of Columbia have done so.  By opting in, the government pays 100% of the expansion, and funding then drops to 90% by 2020.

The Congressional Budget Office estimates the number of Americans on Medicaid will hit 8 million this year, thanks to the expansion, including those who were previously eligible for care.

Timothy Jost, professor at Washington and Lee University School of Law, says the ACA expansion streamlines eligibility for parents, children and pregnant women, because it calculates based on modified adjusted gross income (MAGI). There are no asset requirements for people in this category, meaning you can own cars, homes and still apply and qualify for Medicaid.

This “aligns eligibility requirements under new Medicaid programs with traditional requirements for Medicaid coverage for long-term care,” Jost explained in an email message. “Assets are irrelevant under MAGI categories, I believe, because the administrative costs of investigating the assets of individuals who apply for Medicaid because they have very low incomes would be unreasonable, given the few very-low income individuals with significant assets.”

He says on the flip side, critics say this is why the program enables fraudsters.

“Although the problem is probably overblown, there is a long-standing concern that middle-class individuals might divest themselves of assets to become eligible for nursing home coverage,” he says. “There may be a few people who take advantage of these programs, but the real problems with Medicare and Medicaid fraud are elsewhere with providers and insurers,” he points out, like the bust seen in D.C.

Spodek says the fact that there are no asset caps on eligibility is concerning, and one of the reasons the program is so rife with scammers.

“I have seen people live in million dollar apartments, on the books, while on Medicaid,” Spodek says. “The burden is on you to provide information [in New York] and recertify every year. The whole thing is not scrutinized. If it turns out you weren’t eligible, you just owe a tremendous amount of money.”

When asked how the ACA will factor into the big-picture of putting a cap on fraud in the Medicaid system, Machen declined to comment. But he did say national agencies are realistic about what is going on and are continuing coordinated efforts to reel it in.

“The program is big—but it’s all about controls,” he says of the national Medicaid system. “We are interested in weeding out fraud, and sure there are questions about what you can do to sure up internal controls, but we do have people who need these services and are vulnerable.”

Source: FoxBusiness.com

Medicaid Fraud investigations in New York - Interview with attorney Inna Fershteyn

New York Top Medicaid Fraud Attorney Inna Fershteyn provides details on Medicaid Fraud - what it is, the investigation process, and what you should do if you become the target of Medicaid investigation and prosecution.

Do you believe that you're receiving Medicaid coverage that you're not eligible for? Are you subject to an investigation? If the answer is yes, then it's imperative that you speak to an experienced attorney before speaking with any Medicaid Investigators. Due to the increase in Medicaid investigating people, you should be represented by a Medicaid Fraud attorney.

You want to prevent yourself from unintentionally incriminating yourself or unknowingly confessing to a crime. Voluntarily appearing at an interview and providing the requested documentation can lead to criminal prosecution where what you said and provided at the interview can be used against you in a court of law.

The Law Office of Inna Fershteyn and Associates, P.C. is a New York City law firm that represents residents from New York and New Jersey experiencing Medicaid Fraud and any other health care fraud criminal charges.

For more information see http://www.BrooklynTrustAndWill.com

Law Office of Inna Fershteyn and Associates
1517 Voorhies Avenue, Suite 4
Brooklyn, NY 11235
(718) 333-2394

7 Tips we can learn from Nelson Mandela’s will

It was announced today that Nelson Mandela’s estate is valued at $4.1 million, excluding royalties and potentially other sources, to be split among his family, members of his staff, schools he attended, and the African National Congress, the movement with which he was intimately involved for decades and which now rules post-apartheid South Africa.

How do we know that Mandela’s estate is worth $4.1 million or more, and how do we know who is entitled to what he left behind? Shouldn’t that be private information? Wouldn’t a man of his stature and wealth want it to be private information? It probably won’t be long before we know about Philip Seymour Hoffman’s estate depending on how seriously he took estate planning before his surprising and unfortunate passing at only 46 years old.

We would know these intimate details about one’s estate if Mandela or Seymour Hoffman did the only most basic of estate planning—leaving only a last will and nothing else.

We can learn 7 tips from the fact that Nelson Mandela had what appears to be only a last will.

1. Dying without a will—and in fact dying only with a last will—puts your family through the same probate court process in either case. This is a common myth: people believe, perhaps given the prevalence of fill-in-the-blank software and cheap websites, that a will is enough. There is a sense of false security by relying on a robotic process versus someone with whom you can engage and interact and truly seek advice from. In either case, will or no will, your family has to navigate the public, timely probate court process.

2. Probate takes an average 12-18 months, and longer in more complicated estates or when beneficiaries dispute over assets. And unfortunately, beneficiary disputes have been known to happen and hold up the process even in the smallest of estates where only a few thousand dollars are at stake. This is, after all, a public process and all family members and potentially other interested parties are entitled to notice (even people specifically disinherited in a will), which prompts people to get involved and make a ruckus who might otherwise have gone about their day disrupting someone else’s plans.

3. Probate puts creditors on a pedestal while beneficiaries have to wait. The person who passed away may have owed money to the bank, credit card companies, or a neighbor down the street. It won’t necessarily be known to the survivors who all are valid creditors with a claim against the estate. So, the court process automatically gives creditors time to make their claim. In Colorado creditors have a four-month period from the time notice is published to the time they are legally obligated to make, or forever lose, their claim. But while the family is waiting on creditors to show up, only a very little amount of the estate is available to cover the family’s and the children’s immediate financial needs, and many times the small amount available (the “statutory allowance”) simply isn’t enough to cover the costs of living, which means another family member or loved one has to front the cost while the creditors get the first bite at the apple.

4. Probate is a public process, hence why we know how much is in Nelson Mandela’s estate and who he left it to. Probate is a court process and courts are public. Anyone can go down to any courthouse and look up any probate record and use that information however they prefer. This is why one can see Anna Nicole Smith’s will or James Gandolfini’s will for example. Whether or not you were a private person during life makes no difference as to whether people have access to your last will and other probate documents, such as an inventory of your assets and accounting of who gets what, after your passing.

5. The probate court leaves your children in charge at 18. It’s also prime territory for the unscrupulous. When a minor inherits via a basic will, the probate court not only has to initially get title/ownership of the inherited assets transferred into her name (a six-month old or 17 year-old can indeed own property), but the probate court subsequently has to choose a “conservator” to manage the property until the minor becomes an adult legally at 18 years old. When that happens is on the public records. If you’re a predatory lender or a get-rich-quick schemer, would you rather target a vulnerable 18 year-old or a savvy 40 year-old?

6. Assets that go through probate could end up in the hands of someone you’ve never met before. When you do no estate planning or only basic estate planning, there are little to no protections you can put in place for your children. Once they inherit through a will, or under the default state law if you don’t leave a will, every up-and-down in your child’s life can leave their inheritance exposed. If they go through a divorce, a soon-to-be ex-spouse potentially has a claim to half of the inheritance. If they have creditor issues or end up in a bankruptcy, the creditor can make a claim against the inheritance. And even they are as straight as an arrow, a car accident at the end of a long day at work can result in wiping out the whole inheritance if they are at fault and someone sues them for medical bills. In short, what you worked hard to earn and leave to your children could end up in the hands of someone you’ve never met before.

7. Probate costs a lot of money. The national average cost of probate is 5% of the fair market value (i.e., not counting debt) of what you leave behind. The cost of probate skyrockets the younger your children are as a conservator has to potentially serve in a court-appointed role—with the associated fees they’re paid, plus court fees, attorney fees, and bond premiums—for a longer amount of time until the youngest child reaches 18. Doing an estate plan now where you lay out the clear plan for your family and how they can handle everything without involving the court system of course still costs money on the back end (the “administration”) but in almost all cases not nearly as much as 5% of the estate. The smaller amount spent on fees the more that is available for your loved ones.

Source: Examiner.com

 

Top 5 Mistakes in Estate Planning

1. Not having an Estate Plan in Place and Waiting Until The Last Minute

We can’t plan for every little thing that occurs in our lifetime and there is certainly no ‘right’ time to start planning. Thinking you’re too young to make one is no excuse for not having a plan. What are you waiting for? If you wind up in the hospital or become incapacitated, what happens next? With no guidelines and no plan you will be at a dead end. Seek a professional to help draft and review your estate plan. Which shall include a trust, a will, and a healthcare proxy.

2. Not Seeking Professional Help

With today’s technology and wide results easily provided by the Internet, there has been a huge increase in the number of people who take to the Web to prepare their documents. But there are many laws and issues that only a professional can provide accurate help and information with. Experience, knowledge, and skill are something the Web cannot provide. Moreover, only an attorney can notarize a will!    

3. Failing to Update Your Documents

If you start something be sure to finish it, or at least keep up with it. Having estate planning documents is one thing, making sure they will be correct is another. There are too many changes that can happen over the course of a lifetime to rely on the same documents you started with.  

4. Not Being Aware of Taxes

If you anticipate that your designated beneficiaries will owe large sums to tax, you might want to look into efficient strategies to minimize estate and income taxes. For better insight, seek an experienced estate attorney to best negotiate your plan.

5. Not Focusing on the Basic Components

Don’t beat around the bush. Declare who gets what, what goes where, what happens when. Carefully and clearly draft how you want your assets to be distributed. The more detail, the better. After all, these are your life possessions at hand.

Call or visit the Law Office of Inna Fershteyn today.

(718) 333-2394

www.BrooklynTrustAndWill.com

1517 Voorhies Avenue Suite 4

Brooklyn, NY 11235

Five Estate Planning Lessons From The Paul Walker Estate

Paul William Walker IV was the star of the Fast & Furious movies, until his unfortunate — and ironic — death in a high-speed car accident on November 30, 2013.  The car, in which Walker was a passenger, was found to have been doing at least 100 mph.  Walker was 40 years old when he died, survived by his parents and his 15-year old daughter, Meadow Rain Walker.

Recently, Paul Walker’s father filed to open the estate, including Walker’s Last Will and Testament, which you can read here: Read Paul Walker’s Will.  It sheds some interesting information about the Paul Walker Estate and highlights some valuable estate planning lessons.

First, the probate filing and will reveal that Walker had assets of about 25 million dollars, including 8 million in personal property (which would include cash and investments), $8.5 in expected income, and another $8.5 million in real estate (after subtracting mortgages).

Second, the filing shows that Walker had a revocable living trust, benefiting his daughter as the sole beneficiary.  Trusts, unlike wills, are private documents — so we do not get to see the actual trust document.  The probate documents only reveal that the trust exists and that Meadow is the sole beneficiary of it.

Third, instead of naming Meadow’s mother as the guardian and caretaker of the money, Walker’s will nominated his mother, Meadow’s grandmother. 

Paul Walker at the Fast & Furious premiere at Leicester Square

What lessons can we draw from this?  Good question!

Here are Trial & Heirs’ Top 5 Estate Planning Lessons from Paul Walker’s Estate.

1.  Paul Walker Placed His Trust In A Trust.

Having a will is only the start.  A revocable living trust is the best estate planning tool for most people.  Walker’s will left all of his assets to a trust he created, which means the probate process will be much simpler and less onerous than it could have been.

Hopefully, the trust also means that his young daughter will receive Walker’s millions in a controlled fashion, over time — not all at once when she turns 18.  Trusts done by good estate planning attorneys typically stretch out distributions for young adults, but we don’t know for certain with Paul Walker’s trust because it is a private document.

2.  To Be Most Effective, Trusts Need To Be Fully Funded During Life.

The reason we do know that Walker had a will, trust, and 25 million in assets is because he didn’t fully fund his trust.  When trusts are fully funded — meaning that assets are transferred into the name of the trust during lifetime — then there is nothing left to pass through the will.  This means the probate court process can be completely avoided.

Instead of this, Paul Walker relied on his will, which is a pour-over will that passed everything along to his trust.  The end result is the same, because the trust — not the will– dictates who receives the assets and when.  However, the public scrutiny, cost and hassle are much higher than if he had completed the proper funding ahead of time.  Had he done so, it would have kept his family’s affairs private — wills and all probate filings are public record.

3.  Naming A Guardian For Minor Children Is Always A Good Idea.

Paul Walker gets a big point for naming a guardian for his daughter, Meadow, in his will.  Does that mean that Meadow’s mother will now lose custody of her?  Not necessarily.   The law still favors the custodial parents, meaning that Meadow’s grandmother will not take over guardianship unless the mother agrees or is found to be unfit.  It was still smart for Walker to address guardianship though, in case Meadow’s mother isn’t able or suitable to keep custody for any reason.

That may prove to be the case here, if media reports about the mother’s alleged drinking problems are true.  Reportedly, Meadow was already living with her grandmother and she may in fact become the guardian.  This report may not be accurate, however, because the probate filing indicates that Meadow lives with her mother, not her grandmother.

4.  No One Should Wait Until They Are Old To Do Estate Planning.

Paul Walker’s will was signed in August of 2001, when he was only 28 years old.  This is the same year his first Fast & Furious movie was released.  Walker is to be commended for preparing a will and trust at a young age, before he was well-known movie star.  Far too many adults in this country wait until “someday” to prepare even a basic will.  No one should ever procrastinate with estate planning!  Walker certainly didn’t plan to die in a car accident.

5.  Wills, Trusts, And Other Estate Planning Documents Need To Be Updated.

While Walker gets kudos for planning ahead, he loses points for failing to update his estate planning documents before he died.  His death was more than twelve years after he signed his will.  There are too many changes in life over the course of twelve years — especially when Walker’s net worth grew so much during that time — to rely on the same old documents. 

What if Paul Walker did not want his young daughter to inherit so much?  What about his girlfriend of seven years, Jasmine Pilchard Gosnell?  Didn’t he want Gosnell to receive something from his will and trust, considering they were planning to marry one day?  What if Walker’s parents were not physically able to act as executor or guardian?  These are all reasons to revisit and update estate planning documents.

On the other hand, Walker could have provided for Gosnell in other ways, like a joint bank account or life insurance policy.  However, even if none of his wishes expressed in his will and trust had changed, his tax status certainly did.  Twenty-five million dollars is well over the federal estate tax threshold.  Likely, Paul Walker’s assets were not worth that much in 2001.  He could have taken advantage of any number of tax-avoidance strategies to reduce the estate tax bill.  Because he didn’t do so, the tax consequences will ultimately be paid by his daughter.

These are all good lessons to share with loved ones, clients and prospects — or even to think about yourself.  How does your will and trust measure up to Paul Walker’s?  Why not visit an experienced estate planning attorney and find out?

By Danielle and Andrew Mayoras, co-authors of Trial & Heirs: Famous Fortune Fights!

Source: Forbes.com

 

Medicaid Fraud investigations in New York - Interview with attorney Inna Fershteyn, Feb 4, 2014

NY Top Medicaid Fraud attorney Inna Fershteyn discusses medicaid fraud in NY by providers such as doctors, pharmacies, ambulette companies and by recipients - TV Appearance with Alexander Grant and Inna Fershteyn discussing Medicaid Fraud by Providers and Recipients on Feb 4, 2014.

* Medicaid Fraud Help starting at $1,500 - Hundreds of successful results.

The New York Medicaid Fraud Defense Lawyers with Law Office of Inna Fershteyn & Associates provide details on Medicaid Fraud Investigations (as well as Family Health Plus and other Health Insurance programs), Arrests & Procedures and what you should do if targeted by the NY Bureau of Fraud Investigations or Attorney General. For more information see

www.brooklyntrustandwill.com
Phone: (718) 333-2394

Freeing Workers From the Insurance Trap

The Congressional Budget Office estimated on Tuesday that the Affordable Care Act will reduce the number of full-time workers by 2.5 million over the next decade. That is mostly a good thing, a liberating result of the law. Of course, Republicans immediately tried to brand the findings as “devastating” and stark evidence of President Obama’s health care reform as a failure and a job killer. It is no such thing.

The report estimated that — thanks to an increase in insurance coverage under the act and the availability of subsidies to help pay the premiums — many workers who felt obliged to stay in a job that provided health benefits would now be able to leave those jobs or choose to work fewer hours than they otherwise would have. In other words, the report is about the choices workers can make when they are no longer tethered to an employer because of health benefits. The cumulative effect on the labor supply is the equivalent of 2.5 million fewer full-time workers by 2024.

Some workers may have had a pre-existing condition and will now be able to leave work because insurers must accept all applicants without regard to health status and charge premiums unrelated to health status. Some may have felt they needed to keep working to pay for health insurance, but now new government subsidies will help pay premiums, making it more possible for them to leave their jobs. 

The report clearly stated that health reform would not produce an increase in unemployment (workers unable to find jobs) or underemployment (part-time workers who would prefer to work more hours per week). It also found “no compelling evidence” that, as of now, part-time employment has increased as a result of the reform law, a frequent claim of critics. Whether that will hold up after a mandate that requires employers to provide coverage, which was delayed until 2015, kicks in is uncertain.

In separate estimates, the budget office predicted that two million fewer people will get insurance coverage in 2014 than it had previously predicted, mostly because of technical problems with the rollout of new insurance exchanges and other implementation glitches. The shortfall includes one million fewer people enrolling in private insurance (the 2014 projection is reduced from seven million to six million) and one million fewer enrolling in Medicaid and a related children’s health insurance program (reduced from nine million to eight million).

Given the rocky start, 14 million additional Americans covered by insurance through the exchanges and Medicaid is sound progress; and the budget office projects a sharp increase in enrollment in 2015 and 2016 and a bigger net reduction in the number of uninsured. Its projections for subsequent years remain essentially unchanged. In 2017, it predicts 12 million more in Medicaid and 24 million more in private coverage through the exchanges. 

The new law will free people, young and old, to pursue careers or retirement without having to worry about health coverage. Workers can seek positions they are most qualified for and will no longer need to feel locked into a job they don’t like because they need insurance for themselves or their families. It is hard to view this as any kind of disaster.

Source: NYTimes.com

 

Doctors Abusing Medicare Face Fines and Expulsion

Marilyn B. Tavenner, the administrator of the Centers for Medicare and Medicaid Services, testifying on Capitol Hill last fall.

WASHINGTON — The Obama administration is cracking down on doctors who repeatedly overcharge Medicare patients, and for the first time in more than 30 years the government may disclose how much is paid to individual doctors treating Medicare patients.

Marilyn B. Tavenner, the administrator of the Centers for Medicare and Medicaid Services, said that “recalcitrant providers” would face civil fines and could be expelled from Medicare and other federal health programs.

In a directive that took effect on Jan. 15 but received little attention, Ms. Tavenner indicated that the agency was losing patience with habitual offenders. She ordered new steps to identify and punish such doctors.

A recalcitrant provider is defined as one who is “abusing the program and not changing inappropriate behavior even after extensive education to address these behaviors.” Cases will be referred to Daniel R. Levinson, the inspector general at the Department of Health and Human Services, who has authority to impose civil fines and exclude doctors from Medicare, Medicaid and other programs.

Federal officials estimate that 10 percent of payments in the traditional fee-for-service Medicare program are improper. That would suggest at least $6 billion a year in improper payments under Medicare’s physician fee schedule. But Malcolm K. Sparrow, a Harvard professor and an expert on health care fraud, has said the losses could be greater because the official statistics “fail to accurately capture fraud rates” in Medicare.

A new section of the Medicare manual encourages the use of fines to penalize doctors who generate a pattern of claims for goods and services that they know or “should know” are not medically necessary. Providers can also be barred from Medicare if they bill the program for “excessive charges” or for services substantially in excess of patients’ needs.

In a new report, Mr. Levinson said Medicare officials and contractors should focus on doctors with the highest Medicare billings because they often received improper payments. He said that about 300 doctors received more than $3 million each in yearly Medicare payments and that one-third of them had been singled out for special reviews because of questionable billings.

Mr. Levinson recommended that Medicare officials “establish a cumulative payment threshold” and closely examine claims filed by any doctor whose total exceeded that amount.

Ms. Tavenner, the top Medicare official, said, “High cumulative payments are not necessarily indicative of improper payments or fraud,” but she accepted the recommendation. “Reviewing claims from providers with high cumulative payments could be a valuable screening tool,” Ms. Tavenner said, and it may be appropriate to set the threshold at different levels for doctors in different specialties.

Most of the high-billing doctors specialize in internal medicine, radiation oncology or ophthalmology, investigators said.

Carrie Valiant, a lawyer who represents health care providers, said the new enforcement policy showed what she described as the administration’s “propensity to throw providers out of federal health care programs, rather than work with them to correct mistakes” in billings and claims.

In many cases, Ms. Valiant said, federal investigators assert that a service was medically unnecessary when the real problem was that a doctor or a hospital did not adequately document the need for it.

In a related action, the Obama administration this month scrapped a policy that broadly prohibited the release of federal data showing how much Medicare paid individual doctors each year. The administration said it would consider releasing payment data in response to Freedom of Information Act requests.

The policy, which goes into effect on March 18, says Medicare officials will, in each case, “weigh the balance between the privacy interest of individual physicians and the public interest in disclosure of such information.”

Thomas S. Crane, a lawyer who used to work at the Department of Health and Human Services, said, “The Medicare payment data, combined with data from other sources, could be enormously useful to consumers, researchers and whistle-blowers analyzing patterns of health spending.”

In 1979, a federal district judge in Jacksonville, Fla., issued an injunction that prohibited Medicare officials from divulging payments to individual doctors. The ruling, in a lawsuit filed by doctors, said such disclosures would violate the Privacy Act and “constitute a clearly unwarranted invasion of personal privacy.”

But in May last year, the judge now handling the decades-old case, Marcia Morales Howard, lifted the injunction. Her decision does not require the wholesale release of Medicare payment data but allows Medicare officials and courts to consider the merits of each request.

Consumer advocates, journalists, insurers and employers are urging the administration to release as much data as possible, saying it could help them evaluate providers and spot abusive billing practices.

“The compelling need for public access to physician data far outweighs privacy concerns of physicians,” said David M. Certner, legislative policy director of AARP, the lobby group for older Americans.

Doctors are urging the administration to proceed with caution. 

“The unfettered release of raw data could easily result in inaccurate and misleading information that could ultimately undermine the quality of care for patients,” the American Medical Association and other physician groups wrote to Medicare officials.

The American Society for Radiation Oncology said it feared that the Medicare payment data would give a distorted picture, not showing “the substantial expenses associated with operating a radiation oncology clinic.” 

Source:  NYTimes.com

Some States Are Moving to Loosen Their Estate Taxes

FOR most of the United States, the estate tax is now something only the very wealthy have to plan for. The federal exemption for an individual this year is now $5.34 million, or $10.68 million for a married couple. And that amount is indexed to inflation, so it will continue to rise.

The exception is in the 16 states, mostly in the North, where state estate taxes remain and ensnare middle- and upper-middle-class residents — the very people the high federal exemption was supposed to protect.

The worst for taxpayers is New Jersey, with the lowest exemption in the country, $675,000 a person, and a rate that tops out at 16 percent. (Rhode Island is second.) New Jersey also has an inheritance tax — for bequests to, say, a niece or friend — which starts to be applied at $500. The rate is 15 percent until the amount reaches $700,000 and then it rises to 16 percent. (One concession: The estate pays the higher of the two taxes, not both.)

This week, New York’s governor, Andrew M. Cuomo, took a step toward bringing the state’s estate tax in line with the federal one. And he is not alone among governors of cold-weather states (along with the District of Columbia) that have realized affluent residents are moving to states without estate taxes (and in some cases, income taxes) and in doing so, depriving their old state of the other taxes they paid, like property, sales and income tax.

This week, Gov. Andrew M. Cuomo of New York proposed raising the state’s estate tax exemption. Gov. Chris Christie’s state, New Jersey, has the lowest estate tax exemption in the country at $675,000 a person.

“We have a lot of people moving out of these jurisdictions to avoid the state estate tax entirely,” said Samuel Weiner, co-chairman of the tax, trusts and estates department at Cole Schotz, which has offices in New York and New Jersey. “I have people all over Florida. We even wrote a book on how to establish a residency in Florida.”

New York’s current exemption is $1 million a person with a top rate of 16 percent. Governor Cuomo proposed raising the exemption to $5.25 million by 2019, indexing that to inflation and lowering the top rate to 10 percent. (That tax is still in addition to the 40 percent federal estate tax rate.)

New York is not alone in re-evaluating this. Indiana repealed its inheritance tax, and Ohio ended its estate tax. Tennessee is in the process of phasing out its inheritance tax, and Maryland and the District of Columbia are reviewing their estate taxes.

“There is a strong possibility that the gap is going to be closed over a few years,” said Jamie C. Yesnowitz, a principal at Grant Thornton and chairman of the American Institute of Certified Public Accountant’s state and local tax technical resource panel. “Once some of these other states see New York and D.C. are doing this, I would find it unsurprising if some of these other states join the bandwagon.”

Until — or if — that happens, people who have more money than their state’s exemption but less than the federal exemption generally have three options: set up trusts to reduce or defer the tax, start making gifts to reduce the estate or move. All have complications and pitfalls.

Sharon L. Klein, managing director of family office services and wealth strategies at Wilmington Trust, said a married couple could set up a credit shelter trust for state estate taxes. When the first spouse dies, the amount of the state’s exemption would go into a trust. The remainder would pass free of tax to the surviving spouse and any additional tax owed would be assessed when that spouse died.

Such trusts were commonly used as the federal estate tax exemption rose over the last decade. What complicates this for state estate planning is that the legislation that set the federal estate tax exemption and rate last year included a provision, called portability, that allows surviving spouses to use their deceased spouses’ exemption even if they did not set up a credit shelter trust.

This means that a married couple today would have an exemption of $10.68 million without much planning at all. Not so with states like New York and New Jersey that do not have portability.

In New Jersey, a couple with $1.35 million would owe no estate tax when the first spouse died. If the second spouse died with that same amount, the estate would owe $55,000 in New Jersey tax.

“It’s ironic because you’d think families with smaller estates don’t need a complicated estate plan,” said Laura A. Kelly, a partner at McCarter & English in Newark. “But these are the families that can least afford to pay the tax. If you have a credit shelter trust to get the New Jersey exemption, the surviving spouse can have access to it and get the rest.”

Whereas such estate planning is standard for people worth tens of millions of dollars, it is less common for affluent couples worth several million dollars because of the cost and time needed to set them up. But it is worth it.

Consider a couple in New York with $5 million in assets. They would owe no federal estate tax. But what they would owe to New York would depend on their planning, said Ita M. Rahilly, a partner at the accounting firm Vanacore, DeBenedictus, DiGovanni & Weddell.

If each spouse had $2.5 million in his or her name, $1 million would go into a credit shelter trust upon death and the marginal estate tax rate on the remaining $1.5 million would be 8 percent, she said. If the spouse who died second had all $5 million in her name, that marginal rate would be 11.2 percent on the amount over the exemption.

“This requires a whole rethink,” Ms. Rahilly said.

One upside: People who bought life insurance to cover federal estate taxes could use that policy to pay state estate taxes.

Another option is to give away money while you are still alive. Only Connecticut and Minnesota have state gift taxes that are applied below the federal gift tax exemption, which is the same as the federal estate tax exemption. (This is separate from the annual gift exclusion of $14,000.) Some states, however, consider gifts made close to death for estate tax purposes.

But when you give heirs a gift of, say, appreciated stock, you are also giving them all the unrealized gains the stock has from when you bought it — known as your cost basis. When they sell that gift, they are going to have to pay capital gains on it.

This is where people need to make a calculation. Depending on the recipient’s tax bracket, that rate could be lower than the state estate tax or it could be much higher. (When someone dies, the cost basis goes to what it was on the date of death, called a step-up in basis, and essentially erases all of the embedded gains.)

In Massachusetts, for example, anyone who received an asset with embedded gains and sold it would also be subject to the state’s 5 percent capital gains tax, which is on top of the federal rates, said Beth C. Gamel, managing director at Argent Wealth Management. A person in the highest tax bracket for capital gains and subject to the 3.8 percent Medicare tax would pay a capital-gains tax of 28.8 percent on that asset. The highest rate for Massachusetts’s estate tax is 16 percent, with an exemption of $1 million.

Ms. Gamel added that Massachusetts, unlike many other states and the federal government, allowed people to make large gifts on their deathbed and not have those assets counted for estate tax. This kind of gifting would work if the person had a lot of cash to give. It would also work if the recipient was in a lower tax bracket in a state like New Hampshire, which doesn’t have its own capital gains tax.

None of this is terribly difficult for experts to figure out, but it is time-consuming and requires paying lawyers and accountants for advice. The headache factor is high, particularly when in most states a simple will would do the trick for federal estate taxes. For those dispirited by this, Mr. Weiner of Cole Schotz had simple advice: “Move to Florida.”

But the risk is that people won’t really move: They will spend the winter there and the rest of the year at their home in the Northeast. For the move not to be challenged, they have to establish residency there, with proof like drivers’ licenses, voter registration, country club memberships and church affiliations.

“People want to straddle this gray line,” Mr. Yesnowitz of Grant Thornton said. “But states are looking for that. New York is a hotbed for that kind of litigation because of the stakes involved.”

The trouble could be worth the tax savings — and warmer winters.

Source: NYTimes.com