The “fiduciary rule” is officially dead.
The Labor Department rule, conceived by the Obama administration, was meant to ensure that advisers put their clients’ financial interests ahead of their own when recommending retirement investments.
The rule’s fate was all but sealed with the election of President Donald Trump, who generally opposes financial regulations. Just two weeks into his presidency, he ordered a review of the rule “to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.”
Then this past March, the rule was dealt a serious blow when a federal appeals court hearing a challenge to the rule by business groups vacated it in a split decision, overturning a lower court. The majority argued, in part, that the Labor Department had overstepped its authority in reinterpreting a fiduciary standard that had been on the books for decades.
In late April, the Trump administration allowed a deadline to seek a rehearing to pass without taking action. A few days later, the rule went on life support after the same court unanimously denied a motion by California, New York, Oregon and AARP to replace the federal government in defending it.
Finally, on Wednesday, the last deadline for resuscitating the fiduciary rule passed when the government declined to ask the U.S. Supreme court to reconsider the appeals court’s decision.
One procedural step remains: The court clerk must formally vacate the fiduciary rule by issuing a so-called mandate. To resurrect the rule before that occurs, the Fifth Circuit would have to take the unlikely step of challenging its own decision.
“As a literal matter, anything’s possible, but we regard the mandate as a mere formality,” says Andrew Oringer, a lawyer in Dechert LLP’s fiduciary practice.
The prospect of holding advisers accountable to retirement savers hasn’t disappeared entirely, though. The Securities and Exchange Commission is considering its own version of the fiduciary rule, known as the best-interest rule.
Dechert’s Oringer says the SEC’s effort will be daunting. “The SEC can now write its rule on a clean slate,” he said. “But without the Labor Department rule lurking in the background, the SEC is likely to find it even more daunting to find consensus and compromise as the various parts of the market continue to fight and claw and scratch over their different views of what’s best.”
A Labor Department spokesman referred questions to the Justice Department, noting that it represents the government in such cases. The Justice Department declined to comment.
Business groups, including the U.S. Chamber of Commerce, were fierce opponents of the rule, while many groups representing small investors, including AARP, had supported it.
Wall Street spent years preparing to comply with the Labor Department fiduciary rule. The government estimated that preparation would cost banks and investment advisers as much as $3 billion. An industry group said the number was closer to $5 billion.
Bank of America Corp.’s Merrill Lynch is among the financial companies that started moving toward fee-based advisory models in response to the emerging Labor Department rule and continued on that path even after Trump ordered his review.
“At the very least, from a PR standpoint, it would be difficult to go back to the old ways of doing business,” Brian Gardner, an analyst at Keefe, Bruyette & Woods Inc., told Bloomberg Businessweek. “It just looks bad.”
"Oh my God, we dropped her!" Sandra Snipes said she heard the nursing home aides yell as she fell to the floor.
She landed on her right side where her hip had recently been replaced. She cried out in pain.
A hospital clinician later discovered her hip was dislocated.
That was not the only injury Snipes, then 61, said she suffered in 2011 at Richmond Pines Healthcare & Rehabilitation Center in Hamlet, N.C. Nurses allegedly had been injecting her twice a day with a potent blood thinner despite written instructions to stop.
"She said, 'I just feel so tired,' " her daughter, Laura Clark, said in an interview. "The nurses were saying she's depressed and wasn't doing her exercises. I said no, something is wrong."
Her children also discovered Snipes' surgical wound had become infected and infested with insects. Just 11 days after she arrived at the nursing home to heal from her hip surgery, she was back in the hospital.
The fall and these other alleged lapses in care led Clark and the family to file a lawsuit against the nursing home. Richmond Pines declined to discuss the case beyond saying it disputed the allegations at the time. The home agreed in 2017 to pay Snipes' family $1.4 million to settle their lawsuit.
While the confluence of complications in Snipes' case was extreme, return trips from nursing homes to hospitals are far from unusual.
With hospitals pushing patients out the door earlier, nursing homes are deluged with increasingly frail patients. But many homes, with their sometimes-skeletal medical staffing, often fail to handle post-hospital complications — or create new problems by not heeding or receiving accurate hospital and physician instructions.
Patients, caught in the middle, may suffer. One in 5 Medicare patients sent from the hospital to a nursing home boomerangs back within 30 days, often for potentially preventable conditions such as dehydration, infections and medication errors, federal records show. Such rehospitalizations occur 27 percent more frequently than for the Medicare population at large.
Nursing homes have been unintentionally rewarded by decades of colliding government payment policies, which gave both hospitals and nursing homes financial incentives for the transfers. That has left the most vulnerable patients often ping-ponging between institutions, wreaking havoc with patients' care.
"There's this saying in nursing homes, and it's really unfortunate: 'When in doubt, ship them out,' " said David Grabowski, a professor of health care policy at Harvard Medical School. "It's a short-run, cost-minimizing strategy, but it ends up costing the system and the individual a lot more."
In recent years, the government has begun to tackle the problem. In 2013, Medicare began fining hospitals for high readmission rates in an attempt to curtail premature discharges and to encourage hospitals to refer patients to nursing homes with good track records.
Starting this October, the government will address the other side of the equation, giving nursing homes bonuses or assessing penalties based on their Medicare rehospitalization rates. The goal is to accelerate early signs of progress: The rate of potentially avoidable readmissions dropped to 10.8 percent in 2016 from 12.4 percent in 2011, according to Congress' Medicare Payment Advisory Commission.
"We're better, but not well," Grabowski said. "There's still a high rate of inappropriate readmissions."
The revolving door is an unintended byproduct of long-standing payment policies. Medicare pays hospitals a set rate to care for a patient depending on the average time it takes to treat a typical patient with a given diagnosis. That means that hospitals effectively profit by earlier discharge and lose money by keeping patients longer, even though an elderly patient may require a few extra days.
But nursing homes have their own incentives to hospitalize patients. For one thing, keeping patients out of hospitals requires frequent examinations and speedy laboratory tests — all of which add costs to nursing homes.
Plus, most nursing home residents are covered by Medicaid, the state-federal program for the poor that is usually the lowest-paying form of insurance. If a nursing home sends a Medicaid resident to the hospital, she usually returns with up to 100 days covered by Medicare, which pays more. On top of all that, in some states, Medicaid pays a "bed-hold" fee when a patient is hospitalized.
None of this is good for the patients. Nursing home residents often return from the hospital more confused or with a new infection, said Dr. David Gifford, a senior vice president of quality and regulatory affairs at the American Health Care Association, a nursing home trade group.
"And they never quite get back to normal," he said.
'She Looked Like A Wet Washcloth'
Communication lapses between physicians and nursing homes is one recurring cause of rehospitalizations. Elaine Essa had been taking thyroid medication ever since that gland was removed when she was a teenager. Essa, 82, was living at a nursing home in Lancaster, Calif., in 2013 when a bout of pneumonia sent her to the hospital.
When she returned to the nursing home — now named Wellsprings Post-Acute Care Center — her doctor omitted a crucial instruction from her admission order: to resume the thyroid medication, according to a lawsuit filed by her family. The nursing home telephoned Essa's doctor to order the medication, but he never called them back, the suit said.
Without the medication, Essa's appetite diminished, her weight increased and her energy vanished — all indications of a thyroid imbalance, said the family's attorney, Ben Yeroushalmi, discussing the lawsuit. Her doctors from Garrison Family Medical Group never visited her, sending instead their nurse practitioner. He, like the nursing home employees, did not grasp the cause of her decline, although her thyroid condition was prominently noted in her medical records, the lawsuit said.
Three months after her return from the hospital, "she looked like a wet washcloth. She had no color in her face," said Donna Jo Duncan, a daughter, in a deposition. Duncan said she demanded the home's nurses check her mother's blood pressure. When they did, a supervisor ran over and said, "Call an ambulance right away," Duncan said in the deposition.
At the hospital, a physician said tests showed "zero" thyroid hormone levels, Deborah Ann Favorite, a daughter, recalled in an interview. She testified in her deposition that the doctor told her, "I can't believe that this woman is still alive."
Essa died the next month. The nursing home and the medical practice settled the case for confidential amounts. Cynthia Schein, an attorney for the home, declined to discuss the case beyond saying it was "settled to everyone's satisfaction." The suit is still ongoing against one other doctor, who did not respond to requests for comment.
Dangers In Discouraging Hospitalization
Out of the nation's 15,630 nursing homes, one-fifth send 25 percent or more of their patients back to the hospital, according to a Kaiser Health News analysis of data on Medicare's Nursing Home Compare website. On the other end of the spectrum, the fifth of homes with the lowest readmission rates return fewer than 17 percent of residents to the hospital.
Many health policy experts say that spread shows how much improvement is possible. But patient advocates fear the campaign against hospitalizing nursing home patients may backfire, especially when Medicare begins linking readmission rates to its payments.
"We're always worried the bad nursing homes are going to get the message 'Don't send anyone to the hospital,' " said Tony Chicotel, a staff attorney at California Advocates for Nursing Home Reform, a nonprofit based in San Francisco.
Richmond Pines, where Sandra Snipes stayed, has a higher than average rehospitalization rate of 25 percent, according to federal records. But the family's lawyer, Kyle Nutt, said the lawsuit claimed the nurses initially resisted sending Snipes back, insisting she was "just drowsy."
After Snipes was rehospitalized, her blood thinner was discontinued, her hip was reset, and she was discharged to a different nursing home, according to the family's lawsuit. But her hospital trips were not over: When she showed signs of recurrent infection, the second home sent her to yet another hospital, the lawsuit alleged.
Ultimately, the lawsuit claimed that doctors removed her prosthetic hip and more than a liter of infected blood clots and tissues. Nutt said if Richmond Pines' nurses had "caught the over-administration of the blood thinner right off the bat, we don't think any of this would have happened."
Snipes returned home but was never able to walk again, according to the lawsuit. Her husband, William, cared for her until she died in 2015, her daughter, Clark, said.
"She didn't want to go back into the nursing home," Clark said. "She was terrified."
Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation that is not affiliated with Kaiser Permanente.
KHN's coverage related to aging and improving care of older adults is supported in part by The John A. Hartford Foundation. KHN's coverage of end-of-life and serious illness issues is supported in part by the Gordon and Betty Moore Foundation.
(CNN)The US government is warning insurance companies to be on the lookout for suspicious prescriptions of a drug being used in nursing homes across the country.
The medication, called Nuedexta, is the only drug approved by the Food and Drug Administration to treat a rare condition marked by uncontrollable laughing and crying, called pseudobulbar affect (PBA).
While drugmaker Avanir Pharmaceuticals has said that many dementia patients suffer from PBA, regulators are concerned that Medicare may be paying for the drug for unapproved and potentially fraudulent uses.
Prescribing for unapproved uses is not illegal, but diagnosing a patient with a condition in order to secure Medicare coverage is considered fraud.
A CNN investigation published in October found that Nuedexta's maker had been aggressively targeting frail and elderly nursing home residents for whom the drug may be unnecessary or even unsafe. CNN found multiple examples in which doctors had inappropriately prescribed Nuedexta to dementia patients, using a PBA diagnosis when it was actually being prescribed to control unruly behaviors.
In one case of alleged misprescribing, an Ohio physician who was a top prescriber of the drug was accused of accepting kickbacks in exchange for prescribing Nuedexta and fraudulently diagnosing patients with PBA to secure Medicare coverage. The physician has denied these allegations. The government previously confirmed that a federal investigation into his alleged conduct was launched, but it wouldn't comment on the current status. Read the original investigation into Nuedexta
Since Nuedexta came on the market in 2011, Avanir has generated millions of dollars in annual sales from prescriptions of the drug in nursing homes. And the federal government has been footing a large portion of the bill in the form of Medicare Part D prescription drug funding, for people 65 and over and the disabled.
Documents recently obtained by CNN through a public records request show that red flags have been raised to federal authorities about Nuedexta for years. Complaints filed to the FDA specifically related to marketing and advertising date back to 2012, when the agency received a strongly-worded letter from BlueCross BlueShield of Arizona.
"We would like to confidentially express concern about the marketing and 'educational efforts' by representatives/employees of Avanir Pharmaceuticals, Inc.," the insurance provider said in its letter. The insurer raised questions about whether PBA occurs in dementia patients and expressed concern that the drugmaker was misrepresenting Nuedexta as safe and effective in populations where it had not been adequately studied.
"We believe that the manufacturer appears to be marketing Nuedexta far beyond the scope of the clinical evidence," the company stated in the letter. BlueCross BlueShield of Arizona said in a statement to CNN that it felt compelled to detail these issues for the FDA. "As with any concern where member health and medical guidelines could potentially be compromised, it's our responsibility to act," it said.
In other complaints submitted to the FDA, individual names were redacted but several appeared to be from doctors or other medical professionals working in nursing homes.
"I am concerned with the off label promotion of Nuedexta for diagnosis other than PBA," stated a 2016 complaint. "Specifically they are targetting [sic] residents with Dementia with Behavioral Disturbances."
The person who submitted the complaint also described how they had overheard a salesperson "clearly but cleverly" promoting the drug for unapproved uses, which is illegal. This representative, the complaint said, would try to draw nurses' attention to a document listing PBA symptoms by leaving the pamphlet at nursing stations. The hope was that the nurses would then identify potential candidates to prescribe the drug.
"I want to know what can be done to stop this," the complaint stated. "Recently, things have really gotten out of control."
Avanir said in a statement that it "is committed to the safe, effective use of NUEDEXTA for the treatment of patients with PBA." The company said its promotional materials, including those used in doctors' offices and medical facilities, are subject to internal review and are submitted to the FDA. "We take seriously our role in educating patients, caregivers and health care providers about NUEDEXTA and PBA and we engage with CMS [Centers for Medicare & Medicaid Services] to ensure communications regarding the use of NUEDEXTA accurately reflect FDA approved labeling," the company stated, adding that Nuedexta is approved for treating PBA in all settings in which it occurs.
In March, CMS issued a memo specifically asking Medicare insurance providers to monitor prescriptions of the drug to ensure that it is being appropriately given to patients. The agency said that this memo, which it provided in a response to a CNN request, was meant to "inform plan sponsors about increases in utilization that may not be readily discerned or may relate to potential fraud."
The CMS memo reminds plan sponsors that Nuedexta is only approved to treat PBA and states that Part D insurers are legally required to ensure the drug is only being covered when prescribed for medically-accepted uses.
Two of the biggest Part D plan sponsors told CNN they had initiated safeguards in an attempt to ensure proper coverage of Nuedexta before receiving the latest CMS memo. CVSHealth introduced a so-called "prior authorization" for Nuedexta prescriptions in 2017, while Aetna said it instituted a prior authorization for 2018 "following an analysis of Nuedexta use over the past few years." Prior authorizations require patients to meet certain conditions and prescribers to provide additional information to the insurer, such as a patient's diagnosis, in order for a medication to be covered. Related: Drugmaker's ties to nonprofits raise 'conflict of interest'
Another insurer, Priority Health, said it currently bars the coverage of Nuedexta for dementia patients on non-Medicare, commercial plans, based on the lack of clinical testing for this population. In response to the CMS memo, the insurer plans to add a prior authorization to its Medicare plans as well, though it said that because CMS is strict about what requirements can be included in these, it is unlikely that the same dementia restriction it has for commercial plans will be allowed. And BlueCross BlueShield of Arizona, the insurer that wrote the letter to the FDA, said it has had a prior authorization for Nuedexta in place since 2011 and requires documentation confirming a PBA diagnosis in order for Nuedexta claims to be approved. It said there are very limited numbers of these prescriptions being filled by its members and that it is "providing adequate oversight."
Avanir said in an email that prior authorization requests are common, and that Avanir wants to make sure that patients suffering from PBA have access to Nuedexta -- working with insurers to help facilitate this access.
These prior authorizations can hurt pharmaceutical sales by making it harder for prescriptions to be approved. Internal emails among Avanir employees, which were reviewed by CNN and detailed in previous reporting, showed that the sales force coached doctors and facility employees on how to fight for Medicare coverage of the drug if it was initially refused, with representatives celebrating when prior authorizations were lifted by specific insurance companies.
"I am really excite(d) to pass on this great news," said one employee in 2013 about a large insurer removing the prior authorization for Nuedexta. The employee said the action meant more than 4 million additional seniors could more easily be prescribed Nuedexta. "The entire field sales team should be proud of the efforts that went into demonstrating the appropriate demand for NUEDEXTA!!...This is a very important win for our company."
Correction: An earlier version of this story stated that an Avanir sales representative was "placing snacks like Slim Jims" on nursing stations to draw attention to lists of PBA symptoms. In the pharmaceutical industry, a "slim jim" can also refer to a marketing pamphlet. This article has been updated to reflect that "slim jim" was a reference to pamphlets.
Do you have information to share about Nuedexta or other drugs targeting the elderly? Email us: firstname.lastname@example.org.
When it comes to retirement planning, both men and women worry about having enough income in the future. But women, in general, face two big challenges that can make it more difficult to achieve the goal of a comfortable flow of retirement income.
The first is longevity. In the U.S., women have a longer life expectancy than men. According to the Social Security Administration, a woman turning 65 today can expect to live, on average, until age 86.6, compared with age 84.3 for a man. Since those are averages, about 25 percent of those turning 65 will live past age 90 and about 10 percent will pass age 95.
A longer lifespan means that women should think about a strategy to maintain their retirement income into their 90s to avoid running out of money. While Social Security payments are likely to cover some of those ongoing expenses, women should also look at how to accumulate more savings and investments earlier in life.
Here’s where the second challenge comes into play. Despite a gradual improvement in gender pay equality, women earned about 82 percent of what men made during a similar week of work in 2016, according to the Institute for Women’s Policy Research. The study noted that black women made 60 cents and Hispanics 55 cents for every dollar paid to a white male.
Of course, there are other financial challenges facing women, such as caring for children or an aging parent, or cracking the “glass ceiling” in the workplace. Other risks include divorce or the death or disability of an income-earning spouse or partner. Returning to the workplace after a long absence can be a hardship for a single woman who needs to generate income to pay the monthly bills.
To address these challenges, it is important for women to plan for their financial future relatively early in life. That might include starting a savings account and putting at least a few dollars away from every paycheck.
Another step to consider is cutting back on nonessential household expenses and adding those dollars to a savings or investment account. That’s usually good advice for women (and men) at any age.
It might also be possible to increase contributions to a qualified retirement plan, such as a 401(k), a SEP-IRA or a Roth IRA account. In some cases, an employer might match those contributions, providing an extra boost to those long-term retirement savings.
Other sources of income may become available later in life, such as a parental inheritance or the proceeds from the sale of a business or professional partnership.
Since everyone faces a unique set of personal issues, a financial advisor can provide helpful assistance in developing a strategy for retirement. To take just one example, life and disability insurance policies can help protect against the sudden loss of a spouse’s income.
A financial advisor can also help women construct a diversified portfolio of assets that can provide a solid foundation for retirement. For women in their 30s, 40s and 50s, there might be an emphasis on assets such as stocks, which historically have provided relatively high returns.
As retirement approaches, that balance might shift toward income-producing assets, such as bonds or real estate holdings that also tend to be less volatile than stocks. After all, asset preservation is a major concern for many women who rely on their investment portfolio, plus Social Security, for their retirement income.
In any case, women should take a careful look at their current financial situation, as well as their long-term goals, and start building a plan for the future.
Most of us understand how pets bring joy to people and why they are important. This is particularly true for older folks who may have lost loved ones and who have also lost regular human companionship. A dog or cat can provide that unconditional love we all need.
More assisted living facilities and homes where elders live independently now allow pets, with certain restrictions, such as size and weight of the pet. When visiting my 95 year old mother in law, Alice, we often see people walking their dogs around the place. It's a senior's community which offers independent living apartments as well as assisted living. Like many of that type, it's pet friendly. In other locations, such as nursing homes, pet programs include bringing in dogs, birds or other small creatures for the residents to hold and play with on scheduled visits. The residents love it. Elders with dementia often relate very well to the creatures who visit.
It's not all fun though. When an older person lives alone in declining health, he or she may not be able to adequately care for the pooch or kitty. Someone has to take their animal to the vet for their shots or for treatment with the various ailments older pets suffer from just as their human counterparts do: arthritis, pneumonia, flu, etc. And a frail elder with balance issues may not be entirely safe with a rambunctious dog that likes to jump up, run around them and increase the risk of tripping or falling on Rover. Canes and walkers don't always mix well with beloved pets.
Families have to consider the pros and cons of keeping the pet on hand as a parent ages, perhaps has vision problems or is unsteady on his feet. Some families take in the parent's cherished animal and bring the pet to visit Mom or Dad at the seniors' residence. Some elders are forced to part with their favorite four legged friend when a move to a new residence and loss of ability to drive makes it impossible to care for the pet properly.
As a dog lover myself, I can only say that all solutions should be considered before the heartbreak of separating anyone from an animal they love. There are dog walkers who can be paid to exercise a loved one's pooch every day, run them to the vet, ensure that pet medication is given and that the dog or cat gets all needed care. Caregivers helping an aging parent may be recruited to care for a pet right along with caring for its owner. When recruiting a caregiver, that additional responsibility could be included in the job description, perhaps with a pay bonus for certain additional chores. Finally, if it is impossible to keep the pet where the parent lives, it is an act of caring to find a way for someone in the family, a neighbor or friend to adopt the animal and bring it for regular visits to see its owner. That's good for the human and good for the pet too.
It's not fair to any pet to allow it to be neglected as an aging parent becomes cognitively impaired. Memory loss might mean forgetting to feed the animal or keep it safe. We don't want to see any pet with less care than it needs because the elder's family forgot about the risks of aging and how the aging parent might do unintentional harm to the animal. Cognitive decline, "early dementia", Alzheimer's disease and many other problems can pose a danger to the pet. Considering long term care plans for your elders, be sure to consider a matching long term care plan for the elder's animals. Their pets are indeed family too and do a lot to comfort and support an aging person with communication difficulty or even with the loneliness that so many elders face. That furry cuddle from the cat or that doggie smile with wagging tail can give your aging parent a lift that goes beyond what words can say.
Carolyn Rosenblatt, RN, Elder Law Attorney, Healthy aging and protecting our elders, AgingParents.com, AgingInvestor.com