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Medicaid and "The Granny's Lawyer Goes to Jail" Law: Questioning the Criminalization of Attorney's Advice

NCJ Number
Criminal Justice Policy Review Volume: 14 Issue: 1 Dated: March 2003 Pages: 96-105
J. Mitchell Miller; J. Eagle Shutt; J. Matthew Miller
Nanci Koser Wilson
Date Published
March 2003
10 pages
This article examines the controversies created by Section 4734 of the Balanced Budget Act of 1997 criminalizing paid legal advice facilitating Medicaid eligibility and reviews and discusses whether Section 4734 is sound public policy.
The United States Medicaid program was established to assist States in providing medical services to the vulnerable young, the elderly, the blind, and the disabled. With the elderly population, under long-term care Medicaid consuming the largest portion of Federal and State Medicaid assistance, the cost of administering the program has escalated over the last two decades, threatening the viability of the Medicaid program. To control the runaway costs, Congress, in 1980, enacted several rules and regulations intended at preventing elderly applicants from qualifying when they have intentionally impoverished themselves through asset transfers. By Section 4734 of the Balanced Budget Act of 1997, Congress prohibited attorneys from advising clients (elderly), for pay, on disposing of assets to create Medicaid eligibility. Under Section 4734, five events are discussed which must transpire before an attorney is criminally liable for violating the statute. The objective was to minimize fraudulent asset transfers toward the perpetuation of a viable Medicaid system. However, criminal penalties will not resolve the crisis period that the Medicaid system has entered. In addition, the implications for virtually all legal advisor-advisee relationships are far-reaching. References