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State Bar Association sues over Medicaid law

December 4, 1997

ALBANY, N.Y. (AP) _ The New York State Bar Association sued the federal government Thursday over a law that prohibits attorneys from helping senior citizens transfer their assets to relatives to qualify for Medicaid.

The law, approved this year, makes it illegal to accept a fee to counsel people on how to make those transfers, a common practice known as spending down.

The lawyers’ group called the law a ``gag order″ that keeps people from seeking professional help.

``This `Catch-22′ legislation says to the 80-year-old Alzheimers patient, `Sure, you can make lawful transfers, but no one can help or advise you,‴ state bar President Joshua Pruzansky said.

The suit, filed in U.S. District Court in Albany, claims the law violates First Amendment protections of free speech. Several other bar associations have expressed interest in joining the lawsuit, said Frank Ciervo, a spokesman for the New York bar.

The current law replaced a 1996 law that made it a crime to apply for Medicaid, under certain circumstances, after transferring significant assets. It was quickly dubbed the ``Granny Goes to Jail″ law by critics. Congress repealed the unpopular law in its Balanced Budget Act of 1997, but substituted the new language.

The misdemeanor offense carries a penalty of up to a year in jail or a fine of up to $10,000, or both.

There was no immediate response from the U.S. Justice Department.

But a spokeswoman for Rep. Steven LaTourette, R-Ohio, who fought to kill the ``Granny Goes to Jail″ provision, defended the new law.

Debbie Winston said not many people will be caught by the new provision; a lawyer would have to counsel someone to essentially break the law.

``You would have to counsel the person to do something you knew Medicaid doesn’t allow,″ she said. ``My boss is a lawyer. He doesn’t think they have a whole lot to worry about it.″

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