How to Appeal a Medicare Prescription Drug Denial

If your Medicare drug plan denies coverage for a drug you need, you don’t have to simply accept it. There are several steps you can take to fight the decision.

The insurers offering Medicare drug plans choose the medicines — both brand-name and generic — that they will include in a plan’s “formulary,” the roster of drugs the plan covers and will pay for that changes year-to-year. If a drug you need is not in the plan’s formulary or has been dropped from the formulary, the plan can deny coverage. Plans may also charge more for a drug than you think you should have to pay or deny you coverage for a drug in the formulary because it doesn’t believe you need the drug. If any of these things happens, you can appeal the decision.

Before you can start the formal appeals process, you need to file an exception request with your plan. The plan should provide instructions on how to request an exception. The plan must respond within 72 hours or 24 hours if your doctor explains that waiting 72 hours would be detrimental to your health. If your exception is denied, the plan should send you a written denial-of-coverage notice and a five-step appeals process can begin.

  1. The first step in appealing a coverage determination is to go back to the insurer and ask for a redetermination, following the instructions provided by your plan. You should submit a statement from your doctor or prescriber that explains why you need the drug you are requesting, along with any medical records to support your argument. If your doctor informs the plan that you need an expedited decision due to your health, the plan must notify you within 72 hours. For a standard redetermination, the plan must notify you within seven days.
  2. If you disagree with the drug plan’s decision, you have the right to reconsideration by an independent board. To request reconsideration, follow the instructions in the written redetermination notice you receive from the insurer. You have 60 days from the redetermination notice to request reconsideration. An independent review entity (IRE) will review the case and issue a decision either within 72 hours or seven days. If you receive a negative decision, you can keep appealing.
  3. The third level of appeal is to request a hearing with an administrative law judge (ALJ), which allows you to present your case either over the phone or in person. To request a hearing, the amount in controversy must be at least $160 (in 2018). The amount in controversy is calculated by subtracting any allowed amount under Part D, and any deductible, co-payments, and coinsurance amounts applicable to the Part D drug at issue, from the projected value of the drug benefits in dispute. Your request for a hearing must be sent in writing to the Office of Medicare Hearings and Appeals (OMHA). The ALJ is supposed to issue an expedited decision within 10 days or a standard decision within 90 days.
  4. If the ALJ does not rule in your favor, the next step is a review by the Medicare Appeals Council. The appeal form must be filed within 60 days after the ALJ’s decision. You will need a statement explaining why you disagree with the ALJ’s decision. The appeals council will issue an expedited decision in 10 days or a standard decision within 90 days.
  5. The final step is review by a federal district court. To be able to request review, the amount in controversy must be $1,600 (in 2018). Follow the directions in the letter from the appeals council and file the request in writing within 60 calendar days.

For information about other Medicare appeals, click here.

This article was reprinted with the permission of  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

Choosing Retirement Account Beneficiaries Requires Some Thought

While the execution of wills requires formalities like witnesses and a notary, the reality is that most property passes to heirs through other, less formal means.

Many bank and investments accounts, as well as real estate, have joint owners who take ownership automatically at the death of the primary owner. Other banks and investment companies offer payable on death accounts that permit owners to name the person or people who will receive them when the owners die. Life insurance, of course, permits the owner to name beneficiaries.

All of these types of ownership and beneficiary designations permit these accounts and types of property to avoid probate, meaning that they will not be governed by the terms of a will. When taking advantage of these simplified procedures, owners need to be sure that the decisions they make are consistent with their overall estate planning. It’s not unusual for a will to direct that an estate be equally divided among the decedent’s children, but to find that because of joint accounts or beneficiary designations the estate is distributed totally unequally, or even to non-family members, such as new boyfriends and girlfriends.

It’s also important to review beneficiary designations every few years to make sure that they are still correct. An out-of-date designation may leave property to an ex-spouse, to ex-girlfriends or -boyfriends, and to people who died before the owner. All of these can thoroughly undermine an estate plan and leave a legacy of resentment that most people would prefer to avoid.

These concerns are heightened when dealing with retirement plans, whether IRAs, SEPs or 401(k) plans, because the choice of beneficiary can have significant tax implications. These types of retirement plans benefit from deferred taxation in that the income deposited into them as well as the earnings on the investments are not taxed until the funds are withdrawn. In addition, owners may withdraw funds based more or less on their life expectancy, so the younger the owner the smaller the annual required distribution.  Further, in most cases, withdrawals do not have to begin until after the owner reaches age 70 1/2. However, this is not always the case for inherited IRAs.

Following are some of the rules and concerns when designating retirement account beneficiaries:

  • Name your spouse, usually. Surviving husbands and wives may roll over retirement plans inherited from their spouses into their own plans. This means that they can defer withdrawals until after they reach age 70 1/2 and take minimum distributions based on their age. Non-spouses of retirement plans must begin taking distributions immediately, but they can base them on their own presumably younger ages.
  • But not always. There are a few reasons you might not want to name your spouse, including the following:
    • He or she is incapacitated and can’t manage the account
    • Doing so would add to his or her taxable estate
    • You are in a second marriage and want the investments to benefit your first family
    • Your children need the money more than your spouse
  • Consider a trust. In a number of the above circumstances, a trust can solve the problem, providing for management in the case of an incapacitated spouse, permitting assets to benefit a surviving spouse while being preserved for the next generation, and providing estate tax planning opportunities. Those in first marriages may want to name their spouse as the primary beneficiary and a trust as the secondary, or contingent, beneficiary. This permits the surviving spouse, or spouse’s agent if the spouse is incapacitated, to refuse some or all of the inheritance through a “disclaimer” so it will pass to the trust. Known as “post mortem” estate planning, this approach permits flexibility to respond to “facts on the ground” after the death of the first spouse.
  • But check the trust. Most trusts are not designed to accept retirement fund assets. If they are missing key provisions, they might not be treated as “designated beneficiaries” for retirement plan purposes. In such cases, rather than being able to stretch out distributions during the beneficiary’s lifetime, the IRA or 401(k) will have to be liquidated within five years of the decedent’s death, resulting in accelerated taxation.
  • Be careful with charities. While there are some tax benefits to naming charities as beneficiaries of retirement plans, if a charity is a partial beneficiary of an account or of a trust, the other beneficiaries may not be able to stretch the distributions during their life expectancies and will have to withdraw the funds and pay the taxes within five years of the owner’s death. One solution is to dedicate some retirement plans exclusively to charities and others to family members.
  • Consider special needs planning. It can be unfortunate if retirement plans pass to individuals with special needs who cannot manage the accounts or who may lose vital public benefits as a result of receiving the funds. This can be resolved by naming a special needs trust as the beneficiary of the funds, although this gets a bit more complicated than most trusts designed to receive retirement funds. Another alternative is not to name the individual with special needs or his trust as beneficiary, but to make up the difference with other assets of the estate or through life insurance.
  • Keep copies of your beneficiary designation forms. Don’t count on your retirement plan administrator to maintain records of your beneficiary designations, especially if the plan is connected with a company you worked for in the past, which may or may not still exist upon your death. Keep copies of all of your forms and provide your estate planning attorney with a copy to keep with your estate plan.
  • But name beneficiaries! The biggest mistake many people make is not to name beneficiaries at all, or they end up in this position by not updating their plan after the originally-named beneficiary passes away. This means that the plan will have to go through probate at some expense and delay and that the funds will have to be withdrawn and taxes paid within five years of the owner’s death.

In short, while wills are important, in large part because they name a personal representative to take charge of your estate and they name guardians for minor children, they are only a small part of the picture. A comprehensive plan needs to include consideration of beneficiary designations, especially those for retirement plans.

This article was reprinted with the permission of  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

If We Want to Make Changes to Our Will, Do We Have to Use the Same Attorney Who Drafted It?


My wife and I drafted our wills with an attorney when our two children were young. We would now like to make some minor tweaks to the will. The attorney who drafted it kept a copy, and we have the original. However, we didn’t like the attorney and thought he acted unprofessionally. Do my wife and I need to contact that previous attorney to request he return or destroy the original document or can we simply have a new lawyer update our will and invalidate the old one?


There is no reason to go back to the old attorney. Your new documents simply supersede the old ones. In your case, you have the original documents. In some instances, the attorney holds them. If that were the case, it would be helpful to the original attorney to let him know after you execute your new estate plan so that he doesn’t have to keep the old estate planning documents secure. Most law offices have several fireproof safes stuffed with estate planning instruments, some of them for people the office hasn’t interacted with in decades. The law office could use the additional space.

For the five components of a good estate plan, click here.

This article was reprinted with the permission of  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

Dealing with Retirement Accounts in Crisis Planning

Thank you to our guest blogger Thomas Krause, of Krause Financial Services, for leading this conversation on dealing with retirement accounts in crisis planning.

When dealing with crisis planning for Medicaid or VA, one of the trickiest assets to handle is an IRA. In select states, IRAs are considered exempt assets. In a few others, IRAs of the community spouse are considered exempt assets. However, in most states, IRAs belonging to either spouse are countable assets for Medicaid purposes, and they must be spent-down. Additionally, in VA planning, IRAs count toward a claimant’s net worth.

So, how should one handle a client’s retirement account?

Rather than liquidate the account and incur large tax consequences, your client should consider investing the IRA funds into a Medicaid Compliant Annuity (MCA) or a VA Annuity as part of their spend-down plan for eligibility. The transfer of the funds is not a taxable event, and the funds are taxed as payments are made within each calendar year.

When choosing a term for the annuity, utilizing a longer term is typically recommended. The longer the annuity is structured, the more spread out the tax consequences are, and the greater the economic benefit will be for the client. Should the client need to spend-down both non-qualified (checking account, savings, etc.) and tax-qualified assets, they can purchase two annuities. Non-qualified and tax-qualified accounts cannot be mixed; therefore, they cannot be funded into the same contract.

Preferential Treatment by the DRA

Some may be weary of using MCAs due to their restrictive provisions, however the Deficit Reduction Act of 2005 (DRA) provides preferential treatment to annuities funded with retirement accounts. In most states, a tax-qualified immediate annuity is not required to be irrevocable, non-assignable, provide equal monthly payments, or be actuarially sound. However, it does usually need to designate the state Medicaid agency as a beneficiary, though certain states do have exceptions to this. Annuities funded with retirement accounts are non-assignable and irrevocable by nature, however the client may be able to take advantage of an annuity term longer than their Medicaid life expectancy or structure the annuity with payments other than equal (balloon-style) and monthly (quarterly, annually, etc.).

Transferring the Funds

If your client resides in a state where their IRA is countable, and they do not want to liquidate the account, they have three options to fund the account to an annuity: a trustee-to-trustee transfer, a direct rollover, or a 60-day rollover.

  1. A trustee-to-trustee transfer consists of a direct plan-administrator to plan-administrator transfer. The client fills out an authorization form for the transfer, and the insurance company issuing the annuity obtains the funds directly from the custodian company. The IRS does not limit the number of times an individual can transfer his or her IRA.
  1. A direct rollover consists of the applicant requesting that the current custodian company make the payment directly to the insurance company issuing the annuity. Note some custodians will not issue a check payable to another custodian without transfer paperwork.
  1. A 60-day rollover consists of the applicant contacting the company holding the tax-qualified funds and initiating a complete liquidation of the account, without withholding any taxes. As long as the funds are reinvested into the tax-qualified annuity within 60 days, immediate tax consequences would usually be avoided. The IRS limits the number of times an individual can rollover his or her IRA to once each fiscal year.

This article was reprinted with the permission of  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

Proving That a Transfer Was Not Made in Order to Qualify for Medicaid

Medicaid law imposes a penalty period if you transferred assets within five years of applying, but what if the transfers had nothing to do with Medicaid? It is difficult to do, but if you can prove you made the transfers for a purpose other than to qualify for Medicaid, you can avoid a penalty.

You are not supposed to move into a nursing home on Monday, give all your money away on Tuesday, and qualify for Medicaid on Wednesday. So the government looks back five years for any asset transfers, and levies a penalty on people who transferred assets without receiving fair value in return. This penalty is a period of time during which the person transferring the assets will be ineligible for Medicaid. The penalty period is determined by dividing the amount transferred by what Medicaid determines to be the average private pay cost of a nursing home in your state.

The penalty period can seem very unfair to someone who made gifts without thinking about the potential for needing Medicaid. For example, what if you made a gift to your daughter to help her through a hard time? If you unexpectedly fall ill and need Medicaid to pay for long-term care, the state will likely impose a penalty period based on the transfer to your daughter.

To avoid a penalty period, you will need to prove that you made the transfer for a reason other than qualifying for Medicaid. The burden of proof is on the Medicaid applicant and it can be difficult to prove. The following evidence can be used to prove the transfer was not for Medicaid planning purposes:

  • The Medicaid applicant was in good health at the time of the transfer. It is important to show that the applicant did not anticipate needing long-term care at the time of the gift.
  • The applicant has a pattern of giving. For example, the applicant has a history of helping his or her children when they are in need or giving annual gifts to family or charity.
  • The applicant had plenty of other assets at the time of the gift. An applicant giving away all of his or her money would be evidence that the applicant was anticipating the need for Medicaid.
  • The transfer was made for estate planning purposes or on the advice of an accountant.

Proving that a transfer was made for a purpose other than to qualify for Medicaid is difficult. If you innocently made transfers in the past and are now applying for Medicaid, consult with your elder law attorney.

For more information on Medicaid rules, click here.

This article was reprinted with the permission of  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

When a Guardian Is Appointed, Is the Spouse’s Income Protected?

Question:  What happens to the spouse when a guardian is appointed? Specifically, my mother can no longer care for my stepfather. He had a stroke and it has taken a toll on her. If the court appoints a guardian, will the guardian take away my stepfather’s income? My mother cannot survive without his income.

Answer:  That is a difficult question because a lot could happen, depending on the circumstances. The guardian must use your stepfather’s income for your stepfather’s benefit, but to the extent your mother and he share living expenses, what helps him can also help cover your mother’s costs. If he has to move to a nursing home, the Medicaid rules have protections for spouses. So, if your mother’s income is low – which it sounds like it is – she will be able to keep some or all of her husband’s income. These are the general rules. You will have to consult with a local elder law attorney for specific answers to your mother and stepfather’s situation. (It’s better not to wait until the last minute if possible.)

Pearson Bollman Law is the premier estate planning law firm in Iowa, with offices in Des Moines, Marion and Dubuque. Our clients engage us when planning for the two most important aspects of their lives: Everything they own and everyone they love.  If you have any questions regarding the material in this article, please contact Pearson Bollman Law at 515-727-0986.

This article was reprinted with the permission of

Estate Planning and Retirement Consideration for Late-in-Life Parents

Older parents are becoming more common, driven in part by changing cultural mores and surrogate motherhood. Comedian and author Steve Martin had his first child at age 67. Singer Billy Joel just welcomed his third daughter. Janet Jackson had a child at age 50. But later-in-life parents have some special estate planning and retirement considerations.

The first consideration is to make sure you have an estate plan and that the estate plan is up to date. One of the most important functions of an estate plan is to name a guardian for your children in your will, and this goes double for a parent having children late in life. If you don’t name someone to act as guardian, the court will choose the guardian. Because the court doesn’t know your kids like you do, the person they choose may not be ideal.

In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for them when they get older. If the child is the product of a second marriage, a trust may be particularly important. A trust can give your spouse rights, but allow someone else — the trustee — the power to manage the property and protect it for the next generation. If you have older children, a trust could, for example, provide for a younger child’s college education and then divide the remaining amount among all the children.

Another consideration is retirement savings. Financial advisors generally recommend prioritizing saving for your own retirement over saving for college because students have the ability to borrow money for college while it is tougher to borrow for retirement. One advantage of being an older parent is that you may be more financially stable, making it easier to save for both. Also, if you are retired when your children go to college, they may qualify for more financial aid. Older parents should make sure they have a high level of life insurance and extend term policies to last through the college years.

When to take Social Security is another consideration. Children can receive benefits on a parent’s work record if the parent is receiving benefits too. To be eligible, the child must be under age 18, under age 19 but still in elementary school or high school, or over age 18 but have become mentally or physically disabled prior to age 22. Children generally receive an amount equal to one-half of the parent’s primary insurance amount (PIA), up to a “family maximum” benefit. You will need to calculate whether the child’s benefit makes it worth it to collect benefits early rather than wait to collect at your full retirement age or at age 70.

This article was reprinted with the permission of

Pearson Bollman Law is the premier estate planning law firm in Iowa, with offices in Des Moines, Marion and Dubuque. Our clients engage us when planning for the two most important aspects of their lives: Everything they own and everyone they love.  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

Pearson Bollman Law 2018 Kickoff Meeting

Pearson Bollman Law held their Annual Kickoff Meeting in January.  In this meeting we established goals and identified the strategies that align with our mission:

Providing a service that cares for families, everything they own & everyone they love!”

Thank you Tina Howell with ActionCOACH for facilitating yet another successful planning session!

Can I Convert a Revocable Trust to an Irrevocable Trust When I Apply for Medicaid?


I recently had my living trust updated after 20 years. Now I regret that I didn’t convert the trust to an irrevocable trust. I recently had a mini stroke and am scheduled for some surgery. Can I convert the trust to an irrevocable trust at the same time that I submit an application for Medicaid?


No. The creation and funding of an irrevocable trust, whether creating a brand new trust or amending a revocable trust to make it irrevocable, within five years of applying for Medicaid will result in a Medicaid penalty period. You could end up being ineligible for Medicaid benefits for up to five years. To find out if there is anything you can do, we suggest consulting with an elder law attorney in your state.

This article was reprinted with the permission of

Pearson Bollman Law is the premier estate planning law firm in Iowa, with offices in Des Moines, Marion and Dubuque. Our clients engage us when planning for the two most important aspects of their lives: Everything they own and everyone they love.  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

Can My Father Cash in a Life Insurance Policy Without Affecting My Mother’s Medicaid?


My mother is in a nursing home here in California and is on Medi-Cal (Medicaid). My father has almost depleted his bank account and needs money for dental work. He has two life insurance policies (my mom is the beneficiary). One is for $25,000 and the other is for $10,000. He would like to cash in the $10,000 policy (the cash-in value is $5,000). Would the cash-in value be considered my mom’s income? If it is considered her income, would that disqualify her from Medi-Cal?


No, the life insurance policy would not be considered income. The cash value of a life insurance policy is an asset that the state looks at when determining Medicaid eligibility. If your father cashes in the policy, it is no different from him moving money from one account to another. It does not increase the level of your father’s assets, and it should not affect your mother’s Medicaid coverage.

This article was reprinted with the permission of  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.