Pennsylvania veterans’ homes seizing patients’ savings

When Rosella Stitzell checked into the state-run Southwestern Veterans Center in 2002, the World War II veteran was told 80 percent of her monthly pension would pay for her stay. Twenty percent would go into a personal savings account maintained by the home in Lincoln-Lemington.

Over the next seven years, the savings account grew, eventually topping $20,000.

But when Stitzell, 97, checked out late last year, she and her three children got a surprise. Not only did the state Department of Military and Veterans Affairs refuse to let her have the $20,000, the family learned she owed more than $200,000 for her stay.

The Stitzells had run headlong into a little-known knot of state bureaucracy, a knot that grabbed up the savings of dozens of deceased veterans, including homes and a coin collection.

What’s more, some relatives must go to court to fight the state for money to bury their kin.

A review of court records across the state and interviews with family members show many were unaware they would be billed for thousands of dollars after their loved ones died.

State officials say the practices are fair and legal.

Attorneys say the policies appear contradictory. Some question whether veterans and their loved ones realize when they sign key documents what it will mean.

“I can’t believe that people believe they are signing away their rights to access their own funds. It does seem pernicious,” said Kyle Fisher of the Pennsylvania Health Law Project.

Full cost demanded

Downtown attorney Carol Sikov, who specializes in elder law and represented two veterans’ families, said the restrictions placed on the savings accounts of veterans exceed those imposed on the personal-needs money provided to nursing home patients under the state and federally funded Medicaid program.

Rep. Russell Fairchild, minority chairman of the House Committee on Military and Veterans Affairs, said he was not aware of the policy but planned to look into it.

“It needs to be clarified,” said Fairchild, R-Snyder County.

Dennis Guise, chief counsel for the state Department of Military and Veterans Affairs, said patients and their families are supposed to be informed upon admission that they ultimately are responsible for the full cost of care.

The homes charge veterans at a rate equal to 80 percent of their monthly retirement incomes, he said. The state computes the actual costs annually and seeks to recover the difference between the amount paid and the actual cost under its Estate Recovery Program after a patient dies.

“I do think the homes make a real effort to inform the patients,” Guise said. “I think it is a very fair system.”

He said the repayment policy typically is waived when there is a surviving spouse, though that is relatively rare.

Deciding not to fight

Collections from former patients’ estates total about $3 million per year, which goes toward the $172 million annual funding for the six-home system.

Tribune-Review interviews with dozens of family members reveal that although patients are encouraged to use savings accounts at the veterans homes, the state sharply restricts use of the money.

Most families the Trib contacted said they decided not to contest the state’s efforts to seize savings accounts and other assets.

Sikov, who represented survivors of two veterans who died at Southwestern, said she recovered some money to at least cover administrative and funeral expenses.

“What they do is send out a letter stating that they are holding this money but there are financial obligations that have to be addressed. It’s really frightening. People think that if they say something, they’ll have to pay the whole bill,” she said.

One of her clients was Barry Kochuba of California, whose father died at Southwestern a little over two years ago.

Court records show that John Kochuba, 81, had accumulated $7,262.91 in his personal savings account before he died.

“They tried to keep it, and I had to hire an attorney to get it back,” Barry Kochuba said, adding that state officials “had me at a disadvantage because I was 3,000 miles away. It took me a year to get it back.”

When Gerald L. Hall died after an eight-year stay at the Hollidaysburg Veterans Home in Blair County, his sister, Betty Sue Clouse of Williamsburg, said the state took the proceeds from the sale of his house and other assets.

“They said, ‘You paid so much, but you still owe us more.’ I still owed $140,000,” she said. She was paying Hall’s bills every month from his pension.

Jason Sipes of Hollidaysburg said that when his father George died at Southwestern in 2007, he was told he had money in a savings account and “unless you challenge it, we’re going to take it. I didn’t want to get into a fight, and they were saying he really owed a quarter of a million dollars. I was thinking, ‘Isn’t that what veterans homes are for?’ I decided not to fight it.”

‘Over a barrel’

Sharon McMullen’s uncle Joseph Marek, 80, died at Southwestern in 2008 after a four-year stay.

Within months, state officials went to court to seize the $8,199.51 he had accumulated in his savings account. According to the petition, Marek owed the home $122,611.95.

McMullen said her uncle had Alzheimer’s, and she was with him when he was admitted and signed the documents. She did not recall any discussion about what would happen to his savings account or other assets when he died.

“I don’t think that subject ever came up,” said McMullen, who lives in Florida.

She said she was concerned that if she didn’t get him admitted, he would lose his spot on a long waiting list.

“They have you over a barrel,” she said. “They didn’t give you a choice.”

Once her uncle was admitted, McMullen discovered department rules strictly limited how much he could withdraw from the savings account.

“He could only take so much out at a time,” she said.

She said she never got a clear explanation of what would be done with the account after he died. The state took the money.

“It was sort of a rip-off. I’m not sure what was supposed to happen. They were really vague,” she said.

Robert M. Stanley died at Southwestern in 2006 with nearly $36,000 in his savings account. State lawyers went to court in Allegheny County to seize the money, contending they could not locate his survivors, records show.

William Stanley of Palm Coast, Fla., the late veteran’s brother who looked out for his sibling and arranged his funeral, said no one contacted him. He said he was not aware of the savings account.

“If I had $35,000 lying around in a bank account, I’d like to know about it,” William Stanley said.

The state says the money will go to the $161,388.45 in unpaid bills that remain from Robert Stanley’s six-year stay. A judge will decide the case.

When Johnny John died at Southwestern in 2008, he had $23,817 in his savings. His niece, Anna Maria Tristani of O’Hara, said he was not allowed to spend it. She said officials never told her some of his savings could be used for funeral expenses.

“He was told he was only allowed $50 a month. The bottom line is that they keep it,” she said.

Annual limits

Guise said the department put annual limits on withdrawals from savings accounts in 2004 to prevent abuses and protect patients’ assets.

“It was not designed to prevent people from getting their own money,” he said.

Two families said they had no problems with the state keeping money in the savings accounts. The widow of another patient said she was allowed to keep the money she and her late husband had in a joint savings account.

Alexis Shipman of New Kensington, whose uncle, Francis Becohsky, 65, was a patient at Southwestern, said she thought he got good care and the state deserved to keep the money.

“We were lucky to get him in there,” she said.

Freeze on money

Rosella Stitzell’s family first became concerned about her savings account when the Navy veteran tried to withdraw money for Christmas gifts.

In a Dec. 18, 2009, memo, a Southwestern official wrote: “Please be advised that your $3,000 request does not meet DMVA policy regarding personal use monies over a 12-month period.”

Stitzell’s daughter, Nancy Economou, was told the policy was set in a 2004 memo from then-Deputy Adjutant General Cecil B. Hungerford.

“The policy set forth in accordance with our rules and regulation is designed to encourage residents to save monies to achieve their goals and insure their monies are utilized on their behalf,” the memo states.

The one-page directive caps the annual amount of money any resident can withdraw at the total received during that year, thus freezing money saved from prior years.

In late 2009, after she encountered recurring health problems, Stitzell’s family sought and gained her admission to a federal Department of Veterans Affairs facility.

When they tried to get back the more than $20,000 in her Southwestern savings account, state officials balked, contending she owed about $217,000 for her care.

After several months, then-Southwestern Commandant Charles Rhoads told the Stitzells in a letter that $10,124.49 in accumulated Social Security payments would be returned to the Social Security Administration and $10,116.19 in veterans benefits would be returned to the U.S. Department of Veterans Affairs.

The authorization Rosella Stitzell signed to set up a savings account under control of the home when she was admitted includes provisions that allow using unclaimed money in the account to pay “any balance that may be due to the home” after the patient’s death.

Economou, a Virginia resident, said that neither she or her mother realized what the agreement meant when she signed it in 2002.

Guise said the details of the savings agreements are fully explained to patients and their families upon admission. He stressed that participating in the savings accounts “is strictly voluntary.”

“Absolutely, it is fully explained. I’m not saying they always understand,” Guise said.

Sikov said the system effectively forces families of deceased veterans to hire lawyers to protect their rights, a step which can be expensive and that many are either afraid or unwilling to take.

She noted that Medicaid patients in private nursing homes get $45 a month in personal needs money that they can spend any way they want.

Giving the veterans money and then not allowing them to spend it “doesn’t make sense,” she said.

Guise said the 2004 memo could be revised as part of an effort to qualify some patients for the federally funded Medicaid program.

“We are now looking at this policy as part of that process,” Guise said.