Category Archives: Medicaid Attorney

Managed Care Ruins Medicaid and Terminates Providers at Whim!

If you receive a letter from CMS or your State Department terminating your Medicare or Medicaid contract, would that affect you financially? I ask this rhetorical question because providers’ rights to a Medicare or Medicaid contract or to reimbursements for services rendered is a split in the Circuit Courts. Thankfully, I reside in the 4th Circuit, which has unambiguously held that providers and recipients have a property right in reimbursements for services rendered, a Medicare/caid contract and the right to the freedom of choice of provider. If you live in the 8th Circuit Court of Appeals, I am sorry. You have no rights.

Usually when there is split decision among the Circuit Courts, the Supreme Court weighs in. But, it has not. In fact, it declined to opine. Timing is everything. A 4th Circuit court of Decision giving providers property rights requested the Supreme Court to weigh in and finally end this rift amongst the Circuits. But, sadly, Justice Ginsburg died on September 18, 2020. The Supreme Court declined to review the Fourth Circuit decision on October 13, 2020.  Justice Barrett was confirmed by the Senate on October 26, 2020 and was sworn in on October 27, 2020. So, the certiorari was denied – I assume – due to the vacant seat at the time.

In 40 States, managed care manages Medicaid. The contracts they write are Draconian, saying that either party may terminate at will for no cause but for convenience. Termination at will is all fine and good in the private sector. However, Medicare and Medicaid are highly regulated, and when tax dollars and access to care are at issue, property rights are created.

In NC State Court, against the judgment of the 4th Circuit, a November 5, 2021, unpublished case determined that providers have no property rights to a Medicaid contract and an MCO can terminate at whim. Family Innovations v. Cardinal Innovations Healthcare Solutions, No. COA20-681 (June 1, 2021). Unpublished decisions are supposed to carry no weight. Unpublished decisions are not supposed to be controlling. Citation is disfavored.

Yet, in a strange turn of events, our State administrative courts have rendered, in the last week and in violation of 4th Circuit and administrative case law, that the termination-at-will clause in the MCO contract that a provider is forced to sign stands and is enforceable. These were new Judges and obviously were not well-versed in Medicaid law. Both came from employment law backgrounds, which is completely different than the health care world. But their rash and uneducated decisions bankrupt companies and shut down access to care for medically necessary behavioral health care services.

The upshot? If you have managed care companies in charge of your Medicaid or Medicare contracts, review your contracts now. Is there a termination-at-will clause? Because if there is, you too could lose your contract at any time. Depending on where you reside, you may or may not have property rights in the Medicare Medicaid contract. This is an issue that the Supreme Court must decide. Too many providers are getting erroneously and discriminatorily terminated for no reason and given no due process.

We must bring litigation to thwart the Courts that uphold termination-at-will clauses. Especially, in the era of COVID, we need our health care providers. We certainly do not need the MCOs, which kill access to care.

New Report Points to More Audits of Hospitals

Hospitals across the nation are seeing lower profits, and it’s all because of a sudden, tsunami of Medicare and Medicaid provider audits. Whether it be RAC, MAC, UPIC, or Program Integrity, hospital audits are rampant. Billing errors, especially ‘supposed bundling,’ are causing a high rate of insurance claims denials, hurting the finances of hospitals and providers.

A recent report from American Hospital Association (AHA) found “Under an optimistic scenario, hospitals would lose $53 billion in revenue this year. Under a more pessimistic scenario, hospitals would lose $122 billion thanks to a $64 billion decline in outpatient revenue”*[1]

The “Health Care Auditing and Revenue Integrity—2021 Benchmarking and Trends Report” is an insider’s look at billing and claims issues but reveals insights into health care costs trends and why administrative issues continue to play an outsize role in the nation’s high costs in this area. The data used covers 900+ facilities, 50,000 providers, 1500 coders, and 700 auditors – what could go wrong?

According to the report,

  • 40% of COVID-19-related charges were denied and 40% of professional outpatient audits for COVID-19 and 20% of hospital inpatient audits failed.
  • Undercoding poses a significant revenue risk, with audits indicating the average value of underpayment is $3,200 for a hospital claim and $64 for a professional claim.
  • Overcoding remains problematic, with Medicare Advantage plans and payers under scrutiny for expensive inpatient medical necessity claims, drug charges, and clinical documentation to justify the final reimbursement.
  • Missing modifiers resulted in an average denied amount of $900 for hospital outpatient claims, $690 for inpatient claims, and $170 for professional claims.
  • 33% of charges submitted with hierarchical condition category (HCC) codes were initially denied by payers, highlighting increased scrutiny of complex inpatient stays and higher financial risk exposure to hospitals.

The top fields being audited were diagnoses, present on admission indicator, diagnosis position, CPT/HCPCS coding, units billed, and date of service. The average outcome from the audits was 70.5% satisfactory. So, as a whole, they got a ‘C’.

While this report did not in it of itself lead to any alleged overpayments and recoupments, guess who else is reading this audit and salivating like Pavlov’s dogs? The RACs, MACs, UPICs, and all other alphabet soup auditors. The 900 facilities and 50,000 health care providers need to be prepared for audits with consequences. Get those legal defenses ready!!!!


[1] * https://www.fiercehealthcare.com/hospitals/kaufman-hall-hospitals-close-between-53-and-122b-year-due-to-pandemic

Medicare Provider Appeals: Premature Recoupment Is Not OK!

A ZPIC audited a client of mine a few years ago and found an alleged overpayment of over $7 million. Prior to them hiring my team, they obtained a preliminary injunction in federal court – like I always preach to do – remember, that between the levels 2 and 3 of a Medicare provider appeal, CMS can recoup the alleged overpayment. This is sheer balderdash; the government should not be able to recoup funds that the provider, most likely, doesn’t owe. But this is the law. I guess we need to petition Congress to change this tomfoolery.

Going back to the case, an injunction stops the premature recoupments, but it does nothing regarding the actual alleged overpayments. In fact, the very reason that you can go to federal court based on an administrative action is because the injunction is ancillary to the merits of the contested case. Otherwise, you would have to exhaust your administrative remedies.

Here, we asserted, the premature recoupments (1) violated its rights to procedural due process, (2) infringed its substantive due-process rights, (3) established an “ultra vires” cause of action, and (4) entitled it to a “preservation of rights” injunction under the Administrative Procedure Act, 5 U.S.C. §§ 704–05. We won the battle, but not the war. To date, we have no date for an administrative law judge (“ALJ”) – or level 3 – hearing on the merits.

For those of you who have participated in a third-level, Medicare provider appeal will know that, many times, no one shows for the other side. The other side being the entity claiming that you owe $7million. For such an outlandish claim of $7 million, would you not think that the side protesting that you owe $7 million would appear and try to prove it? At my most recent ALJ hearing, no one appeared for the government. Literally, my client – a facility in NJ that serves the MS population – me and the ALJ were the only participants. Are the auditors so falsely confident that they believe their audits speaks for itself?

In this particular case, the questionable issue was whether the MS provider’s consumers met the qualifications for the skilled rehabilitation due to no exacerbated physical issues. However, we all know from the Jimmo settlement, that having exacerbated issues or improvement is not a requirement to requiring skilled rehab versus exercising with your spouse. The ALJ actually said – “I cannot believe this issue has gotten this far.” I agree.

TPE and Prepay Audits: Speak Softly, But Carry a Big Stick

Audits have now resumed to 100% capacity – or even 150% capacity. All audits that were suspended during COVID are reinstated. As you all know, RAC and MAC audits were reinstated back in August. CMS announced that Targeted Probe and Educate (TPE) audits would resume on Sept. 1, 2021. Unlike RAC audits, the stated goal of TPE audits is to help providers reduce claim denials and appeals with one-on-one education, focused on the documentation and coding of the services they provide. However, do not let the stated mission fool you. Failing a TPE audit can result in onerous actions such as 100 percent prepay review, extrapolation, referral to a RAC, or other action, a carefully crafted response to a TPE audit is critical. TPEs can be prepay or post-pay.

Speaking of prepayments, these bad babies are back in full swing. CareSource is one of the companies contracted with CMS to conduct prepayment reviews and urgent care centers seem to be a target. Prepayment review is technically and legally not a penalty; therefore being placed on prepayment review is not appealable. But do not believe these legalities – prepay is Draconian in nature and puts many providers out of business, especially if they fail to seek legal counsel immediately and believe that they will pass without any problem. When it comes to prepay, believing that everything will be ok, is a death trap. Instead get a big stick.

            42 CFR §447.45 requires 90% of clean claims to be paid to a provider within 30 days of receipt. 99% must be paid within 90 days. The same regulations mandate the agency to conduct prepayment review of claims to ensure that the claims are not duplicative, the consumer is eligible for Medicare, or that the number of visits and services delivered are logically consistent with the beneficiary’s characteristics and circumstances, such as type of illness, age, sex, and service location. This standard prepayment review is dissimilar from a true prepayment review.

            Chapter 3 of the Medicare Program Integrity Manual lays out the rules for a prepayment review audit. The Manual states that MACs shall deal with serious problems using the most substantial administrative actions available, such as 100 percent prepayment review of claims. Minor or isolated inappropriate billing shall be remediated through provider notification or feedback with reevaluation after notification. The new prepay review rules comments closed 9/13/21, so it will take effect soon.

            If a 100% prepay is considered the most substantial administrative action, then why is it not considered an appealable sanction? I have, however, been successful in obtaining an injunction enjoining the suspension of payments without appealing being placed on prepay.

When requesting documentation for prepayment review, the MACs and UPICs shall notify providers when they expect documentation to be received. It is normally 30-days. The Manual does not allow for time extensions to providers who need more time to comply with the request. Reviewers shall deny claims when the requested documentation to support payment is not received by the expected timeframe. Any audit, but especially prepay audits can lead to termination under 42 CFR §424.535. You may choose to speak softly, but always carry a big stick.

Instead of Orange, Medicare Advantage Audits Are the New Black

In case you didn’t know, instead of orange, Medicare Advantage is the new black. Since MA plans are paid more for sicker patients, there are huge incentives to fabricate co-morbidities that may or may not exist.

Medicare Advantage will be the next most audited arena. Home health, BH, and the two-midnight rule had held the gold medal for highest number of audits, but MA will soon prevail.

As an example, last week- a New York health insurance plan for seniors, along with amedical analytics company the insurer is affiliated with, was accused by the Justice Department of committing health care fraud to the tune of tens of millions of dollars. The dollar amounts are exceedingly high, which also attracts auditors, especially the auditors who are paid on contingency fee, which is almost all the auditors.

CMS pays Medicare Advantage plans using a complex formula called a “risk score,” which is intended to render higher rates for sicker patients and less for those in good health. The data mining company combed electronic medical records to identify missed diagnoses — pocketing up to 20% of new revenue it generated for the health plan. But the Department of Justice alleges that DxID’s reviews triggered “tens of millions” of dollars in overcharges when those missing diagnoses were filled in with exaggerations of how sick patients were or with charges for medical conditions the patients did not have. “All problems are boring until they’re your own.” – Red

MA plans have grown to now cover more than 40% of all Medicare beneficiaries, so too has fraud and abuse. A 2020 OIG report found that MA paid $2.6 billion a year for diagnoses unrelated to any clinical services.

Diagnoses fraud is the main issue that auditors are focusing on. Juxtapose the other alphabet soup auditors – MACs, SMRCs, UPICs, ZPICs, MCOs, TPEs, RACs – they concentrate on documentation nitpicking. I had a client accused of FWA for using purple ink. “Yeah I said stupid twice, only to emphasize how stupid that is!” – Pennsatucky. Other examples include purported failing of writing the times “in or out” when the CPT code definition includes the amount of time.

Audits will be ramping up, especially since HHS has reduced the Medicare appeals backlog at the Administrative Judge Level by 79 percent, which puts the department on track to clear the backlog by the end of the 2022 fiscal year.

 As of June 30, 2021, the end of the third quarter of FY 2021, HHS had 86,063 pending appeals remaining at OMHA, according to the latest status report, acquired by the American Hospital Association. The department started with 426,594 appeals. This is progress!!

Medicare Appeals: Time Is of the Essence!

Timing is everything. Missing a deadline germane to any type of Medicare or Medicaid audit is deadly. Miss an appeal deadline by one, single day, and you lose your right to appeal an overpayment.

 If anyone has watched Schitt’s Creek, then you know that when Johnny and Moira Rose missed their deadline to file for and pay taxes, they lost their mansion, their money, and way of life. The same catastrophic loss can occur if a provider misses an appeal deadline. Then that provider will be up Schitt’s Creek.

Importantly, when it comes to Medicare appeals, your appeal is due 60 days after the reconsideration review decision. 42 CFR § 405.1014 – Request for an ALJ hearing or a review of a QIC dismissal. A third-level, Medicare provider appeal is considered “filed” upon receipt of the complete appeal at the Office of Medicare Hearings and Appeals, instead of the normal standard acceptance that an appeal is filed upon the mailing stamped date. As in, once you mail your appeal, it will be retroactively filed per the date of mailing. Not true for the third-level, Medicare provider appeal. It is considered filed the date of receipt.

Also, the regulatory clock starts ticking 5 days after the date the of the reconsideration review decision, because, the thought is that the U.S. Post Office will not take more than 5 days to deliver correspondence. Well, that assumption nowadays is inaccurate. The Post Office is a mess, and that’s an understatement. My friend, Dr. Ronald Hirsh told me that his overnighted packages have been received weeks later. More times than not, mail is received weeks after it was mailed, which makes the date of delivery imperative. Yet this regulation forces you to rely on the U.S. Post Office; it makes no logical sense.

We actually had a case in which the ALJ dismissed our appeal because the Post Office delivered the appeal on the 61st day after the reconsideration review decision, including the 5 days window. Literally, the 61st day. The reason that the appeal was received on the 61st day is because the 60th day fell on a holiday, a weekend, or a closure due to COVID – I cannot recall – but OMHA was closed. The mail delivery person had to return the next day to deliver the appeal. Yet, our appeal was dismissed based on the US Post Office! We filed a Motion to Reconsider, but the ALJ denied it. Our only chance at presenting to the ALJ was squashed – due to the Post Office.

We appealed the ALJ’s denial to the Medicare Appeals Council with hope of reasonableness. We have no decision yet. It certainly makes me want to say: Eww, David!

Ewww, David!

Medicare Provider Appeals: “Get Thee to an ALJ!”

Get thee to a nunnery!” screamed Hamlet to Ophelia in frustration of his mother marrying Claudius so quickly after his father’s death. Similarly any provider who has undergone a Medicare appeal understands the frustration of getting the appeal to the administrative law judge level (the 3rd level). It takes years to do so, and it is the imperative step instead of the lower level rubber stamps. “Get thee to an ALJ!”

Per regulation, once you appeal an alleged Medicare overpayment, no recoupment of the disputed funds occurs until after you receive the second level review, which is usually the QIC upholding the overpayment. It is no secret that the Medicare provider appeals’ level one and two are basically an automatic approval process of the decision to recoup. “Something is rotten in the state of Denmark.” Hence, the importance of the ALJ level.

There are 5 levels of Medicare appeals available to providers:

  • Redetermination
  • Reconsideration
  • Administrative Law Judge (ALJ)
  • Departmental Appeals Board (DAB) Review
  • Federal Court (Judicial) Review

The third level is the level in which you present your case to an ALJ, who is an impartial independent tribunal. Unfortunately, right now, it takes about five years between levels two and three, although with CMS hiring 70 new ALJs, the Office of Medicare Hearings and Appeals (OMHA) is optimistic that the backlog will quickly dissipate. Last week, I attended an ALJ hearing for a client based on an audit conducted in 2016. Five years later, we finally presented to the ALJ. When the ALJ was presented with our evidence which clearly demonstrated that the provider should not pay anything, he actually said, “I’m shocked this issue got this far.” As in, this should have been reversed before this level. “O what a noble mind is here o’erthrown!”

In many cases, a premature recoupment of funds in dispute will financially destroy the health care provider, which should not be the purpose of any overpayment nor the consequence of any fraud, waste, and abuse program. We are talking about documentation nit-picking. Not fraud. Such as services notes signed late, according to best practices. Or quibbles about medical necessity or the definition of in patient and the two-midnight rule.

You have all probably read my blogs about the Family Rehab case that came out in TX in 2019. A Court found that Family Rehab, a health care facility, which faced a $7 million alleged overpayment required an injunction. The Judge Ordered that CMS be enjoined from prematurely recouping Medicare reimbursements from Family Rehab. Now, be mindful, the Judge did not enjoin CMS the first time Family Rehab requested an injunction; Superior Court initially dismissed the case for lack of jurisdiction based on failure to exhaust its administrative remedies. But instead of giving up, which is what most providers would do when faced with a dismissed injunction request due to emotional turmoil and finances. “To be, or not to be: that is the question:” Instead, Family Rehab appealed the dismissal to the Court of Appeals and won. The 5th Circuit held that Superior Court does have jurisdiction to hear a collateral challenge on both procedural due process grounds as well as an ultra vires action. On remand, Family Rehab successfully obtained a permanent injunction.

The clinical issues supposedly in support of the overpayment are silly. In Family Rehab’s case, the ZPIC claims homebound criteria was not met when it is clearly met by a reasonable review of the documents.

Homebound is defined as:

Criteria One:

The patient must either:

  • Because of illness or injury, need the aid of supportive devices such as crutches, canes, wheelchairs, and walkers; the use of special transportation; or the assistance of another person in order to leave their place of residence

OR

  • Have a condition such that leaving his or her home is medically contraindicated.

If the patient meets one of the Criteria One conditions, then the patient must ALSO meet two additional requirements in Criteria Two below:

Criteria Two:

  • There must exist a normal inability to leave home;

AND

  • Leaving home must require a considerable and taxing effort.

In one of the claims that the ZPIC found no homebound status, the consumer was legally blind and in a wheelchair! The injunction hinged on the Court’s finding that because the ALJ stage is critical in decreasing the risk of erroneous deprivation, an injunction was necessary. I look forward to the ALJ hearing. “The rest is silence.”

Audits Surge with Medicare Advantage and TPE Audits Increased!

Everyone knows about audits of health care providers. But what about the billing companies? Or a data-analytics company? In a complaint filed last week, a New York data-mining company DxID is accused of allegedly helping a Medicare Advantage program game federal billing regulations in a way that enabled the plan to overcharge for patient treatment. As you know, Medicare Advantage plans are paid more for sicker patients. Supposedly, DxID combed medical records for “missed” diagnoses. For example, adding major depression to an otherwise happy consumer. A few years ago, I won an injunction for a provider who 100% relied on the billing company to bill. Because this company aggressively upcoded, we used the victims’ rights statutes in the SSA to defend the provider. And it worked. Providers often forget about the safety net found in the victims’ rights statutes if they wholly rely on a billing company.

This DXID complaint cites medical conditions that it says either were exaggerated or weren’t supported by the medical records, such as billing for treating allegedly unsupported claims for renal failure, the most severe form of chronic kidney disease. The Justice Department is seeking treble damages in the False Claims Act suit, plus an unspecified civil penalty for each violation of the law.

Medicare Advantage has been the target of multiple government investigations, Justice Department and whistleblower lawsuits and Medicare audits. One 2020 report estimated improper payments to the plans topped $16 billion the previous year. In July, the Justice Department consolidated six such cases against Kaiser Permanente health plans. In August, California-based Sutter Health agreed to pay $90 million to settle a similar fraud case. Previous settlements have totaled more than $300 million.

Breaking news: Targeted Probe and Educate audits (TPE) resumed September 1, 2021. Due to COVID, TPE audits had been suspended. Unlike recovery audits, the stated goal of TPE audits is to help providers reduce claim denials and appeals with one-on-one education focused on the documentation and coding of the services they provide. TPE audits are conducted by MACs. While originally limited in scope to hospital inpatient admissions and home health claims, CMS expanded the program to allow MACs to perform TPE audits of all Medicare providers for all items and services billed to Medicare. Beware the TPE audits; they are not as friendly as they purport. A TPE audit can result in a 100 percent prepay review, extrapolation, referral to a Recovery Auditor, or other action, so a carefully crafted response to a TPE audit is critical.  

The TPE audit process begins when a provider receives a “Notice of Review” letter from the MAC which states the reasons the provider has been selected for review and requests 20-40 records be produced. Once the records are produced, the MAC will review the 20-40 claims against the supporting medical records and send the provider a letter detailing the results of their review. If the claims are found to be compliant, the TPE audit ends and the provider cannot be selected for review again for a year unless the MAC detects significant changes in provider billing. However, if the claims are found not to be compliant, the MAC will invite the provider to a one-on-one education session specific to the provider’s documentation and coding practices. The provider is then given 45 days to make changes and a second round of 20-40 records will be requested with dates of service no earlier than 45 days after the one-on-one education. 

The provider will be given three rounds of TPE to pass. Do not use all three rounds; get it right the first time. If the provider fails pass after three rounds, they will be referred to CMS for further action. With MA, TPE, and audits of data-analytics companies ramping up, 2022 is going to be an audit frenzy.

Defenses Against Medicare Audits: Arm Yourself!

To defend against RAC, MAC, or TPE audits, we always fight clinically claim by claim. We show that the clinical records do support the service billed despite what an auditor says. But there are other more broad defenses that apply to providers found in the Social Security Act (SSA), even if the clinical arguments are weak.

When faced with an alleged overpayment, look to the SSA. Within the SSA, we have three, strong, provider defenses:

  1. Waiver of liability
  2. Providers without fault
  3. Treating physician rule

The “waiver of liability” defense provides that, even if payment for claims is deemed not reasonable and necessary, payment may be rendered if the provider did not know, and could not have been reasonably expected to know payment would not be made. SSA, § 1879(a); 42 U.S.C. §1395pp; see also Medicare Claims Processing Manual (CMS-Pub. 100-04), Chapter 30, §20. If a provider could not have been reasonably expected to know payment would not be made as the services were medically necessary and covered by Medicare.

Section 1870 of the SSA states that payment will be made to a provider, if the provider was without “fault” with regard for the billing for and accepting payment for disputed services. As a general rule, a provider would be considered without fault if he/she exercised reasonable care in billing for and accepting payment; i.e., the provider complied with all pertinent regulations, made full disclosure of all material facts, and on the basis of the information available, had a reasonable basis for assuming the payment was correct. Here, there is no allegation of fraud; medically necessary services were rendered. The doctors performed a medically necessary service and should be paid for the service despite nominal documentation nit-picking. The SSA does not require Medicare documents to be perfect; there is no requirement of error-free.

            It is well-settled law that the treating physician’s medical judgment as to the medical necessity of the services provided should prevail absent substantial contradictory evidence. Meaning, the doctor who actually physically or virtually treat the consumer has a better vantage point than any desk review audit. Therefore, substantial deference should be given to the treating physician. This is especially important in proving medical necessity.

Lastly, even though this is not in the SSA, question the expertise of your auditors. If you are an MD and provide bariatric services, the auditor should be similarly qualified. Likewise, a dental hygienist should not audit medical necessity for a dental practice. Even if, clinically, your records are not stellar, you still have the broad legal defenses found in the SSA.

Medicare Consumers May Be Great House-Flippers: Keep Your Mind Wise

I have a guest blogger today – what an honor! Teresa Greenhill is the co-creator of MentalHealthforSeniors.com, which is dedicated to providing seniors with information on physical and mental fitness. Being a senior herself, Teresa, with some help from her granddaughter, manages the website as a way to keep her busy and help other seniors be active and happy in their golden years.

Teresa’s blog today is about Medicare consumers creating a “senior” business…make money as a senior! Think it can’t be done?? Read Teresa’s blog below.

Breaking Into the House-Flipping Business: A Guide for Seniors

House-flipping can be a lucrative and rewarding venture for seniors. Maybe you are a retiree looking for a second career. Maybe you’ve always wanted to get competitive in the world of real estate. Or maybe you’re just trying to stay occupied and active while bringing in a little extra cash. Whatever the case, if you’re considering trying your hand at house-flipping, here are some of the basics you should know.

Seniors tend to thrive in the field of real estate.

Success in real estate can hinge very much on how well you deal with people. And this is something that many seniors have become adept at, over the years. You’ve probably had your share of managing difficult personalities. You can often anticipate issues before they arise. And most importantly, your own life experience sets you up to empathize with what others may be going through. Individuals who are selling or buying a home will appreciate the chance to deal with someone who is competent and calm, and who understands their worries. The bonus for seniors is that the work is relatively undemanding and allows you to set your own schedule.

You don’t need to be a real estate agent.

You don’t need to train to be an agent, or be certified as an agent, in order to get into flipping houses. That doesn’t mean there aren’t benefits to getting your real estate agent’s license, however. As a licensed agent, you will save money on commissions. You will also have better and earlier access to real estate listings. And being educated in the ins and outs of home buying and selling will make the entire process run more smoothly for you.

You will need to start with a certain amount of funding.

House-flipping is not one of those fields you can leap into without preparation, and this includes financial preparation. Before you decide that house-flipping is right for you, check to see whether you are financially ready to make a good start. The biggest expense you will face is the acquisition cost, which will vary depending on location, the size of the property, and its condition. You will also have to deal with renovation expenses and property taxes. Other costs involved in house-flipping include utilities, inspections, permits, and closing costs. So yes, this is a field that is easier to break into if you have plenty of cash on hand. But seniors who don’t have much expendable income still may be able to get a bank or home equity loan to start off.

Should you buy fixer-uppers?

When going into house flipping, the idea is that you will sell a house for more than you spent on it – so, yes, some renovation is a given. But there’s a limit to how much renovation and repair is a good idea. Even a home that looks decent at first glance could have a host of problems including expensive issues pertaining to the foundation, the roof, or the structure itself. Look out for mold, asbestos, termite damage, and wiring problems. A good choice is a home that will benefit immensely from less expensive aesthetic updates such as a good paint job, new cabinets, or improved landscaping. Of course, much depends on how skilled you are at home renovations and repairs, yourself.

Will you have to hire employees?

If you plan on making this a business, you may want to bring on more permanent hires. Or you may prefer simply to deal with contractors. Either way, make sure you hire individuals or companies that have good reviews and are well regarded. Don’t forget that you will need to manage payroll, as soon as you start hiring others. So make sure anyone you bring on fills out the appropriate paperwork, and have an organized system for paying them promptly and correctly.

If you feel you have what it takes to succeed at – and enjoy – house-flipping, this may be the beginning of an exciting new phase in your life. Just be sure you are well informed, and sufficiently financially equipped to get your start safely. If you are a senior interested in real estate and also have legal questions pertaining to Medicaid or Medicare in the Raleigh area, contact Knicole C. Emanuel of Medicaid Law NC.

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