URGENT - ACTION NEEDED: Anti-Combo Legislation Officially Unveiled

After months of searching, the cemeteries have finally found an author for their legislation to repeal Wisconsin’s anti-combo law.

On Wednesday, January 4th, Rep. Evan Wynn (R-Whitewater) circulated a memo to his legislative colleagues asking them to support LRB 3490 (see attached pdf). This is the first step in formally introducing legislation. Rep. Wynn gave legislators until Wednesday, January 18^th to contact him to become co-authors.

The WFDA needs your help! It is urgent that you contact your State Representative and your State Senator as soon as possible and express your opposition to LRB 3490 which repeals the anti-combo law.

You can click on the link below, enter your home address and the website will provide you with contact information for your Representative and Senator.

http://legis.wisconsin.gov/w3asp/waml/waml.aspx

Simply call your legislator, provide them with your name, address, funeral home name and make the following request "Please do not co-sponsor LRB 3490”.

Here are some talking points on why the WFDA and its members oppose any changes to Wisconsin’s anti-combo law:

• LRB 3490/1 would decrease funeral service competition in Wisconsin.

Historically, laws were established in many states, including Wisconsin, to improve competition and expand consumer choice and protection in the death-care marketplace. Due to the necessity of burying human remains, cemeteries at that time were able to set prices and other market conditions that left consumers with few choices and high prices. Cemeteries were prohibited from owning funeral homes in Wisconsin so the funeral services industry could flourish, and consumers would benefit, through market competition.

• LRB 3490/1 would increase cemeteries existing financial (competitive) advantages in the marketplace.

Cemetery Advantage #1 – Trusting: Funeral homes are required to place into trust 100% of the funds paid by the consumer for future products and services. Cemeteries are only required to trust 40% of the consumers money for the same purpose. That means cemeteries can pocket 60% of the consumers money entrusted to them. Removing the anti-combo law would represent a major expansion of this existing marketplace advantage and would reduce ‘trusting’ for funeral expenses to little more than a Ponzi scheme.

The State of Missouri bet on this approach to trusting and its consumers lost big in 2008/2009. Missouri only required 80% trusting of funeral expenses and the entire system collapsed during the severe downturn in the financial markets at that time. Many consumers lost large portions of monies they had placed into trust for their funeral expenses.

Cemetery Advantage #2 – Tax Exemption: Funeral homes pay taxes, cemeteries do not. If cemeteries own funeral homes the staff and operational expenses for running that home will shift to the tax exempt cemetery and providing yet another competitive advantage.

A funeral home not owned by a cemetery could not compete with the marketplace advantages provided by LRB 3490/1.

• LRB 3490/1 will decrease consumer choices.

Fewer choices means higher prices. In other states that have removed the anti-combo laws the markets have become quickly dominated by a few large corporate owners. Consumers are offered high-priced single packages for funeral services and cemetery space. Higher prices and few consumer choices are a result of less competition.

• Wisconsin’s Anti-Combo law has been challenged and upheld by Wisconsin courts.

The anti-combo law was challenged in Wisconsin by a large out-of-state cemetery corporation in the late 1990s. The law was upheld by three separate courts beginning in 1995 and including the State Supreme Court in 1999. In addition, the law was supported in an opinion issued by Attorney General Hathaway in 1989.

• LRB 3490/1 will diminish federal consumer protections.

Consumer Protections in the death-care industry are established around the premise of separate cemetery and funeral services. Most consumer protections at both the state and federal level are built around funeral service not cemeteries. For example, only funeral homes, not cemeteries, are regulated by the Federal Trade Commission under the "funeral rule” that requires such things as making your price list publicly available. Under LRB 3490/1 consumers will find themselves planning funerals with a cemetery authority where federal consumer protections do not apply.

• LRB 3490/1 would undermine Wisconsin consumer protections.

In Wisconsin, consumer protections in death-care are also focused on funeral homes not cemeteries. Requirements for proper handling of the body (licensed funeral directors are part of the public health system) as well as high standards in handling of funds, establishing trusts or insurance products for final expenses are aimed at funeral homes. The cemetery/funeral home authority that consumers would have to do business with would operate outside these protections.

IMPORTANT MEMO FROM SCOTT PETERSON,
EXECUTIVE DIRECTOR WFDA

I have forwarded to all WFDA members the memo I received Wednesday night (Dec. 21st)  from the DHS, Wisconsin Funeral and Cemetery Aids Program (WFCAP). This is the name of the state’s medicaid (Title 19) program for funeral and cemetery reimbursement. The memo announces that the administration of claims for reimbursement will change rather abruptly on January 1, 2012. We sent this to all member funeral homes just as soon as we received it. We will continue to communicate additional information as it develops.

We have summarized some of the issues below but we encourage you to read the DHS memo first. After that the issues below will make more sense.

Here are some of the key issues:

1. Starting January 1, 2012 all claims for Medicaid reimbursement will be made directly to the state using the information detailed in the attached memorandum from the State Department of Health Services.

2. This change does not apply to Milwaukee County. Funeral homes providing service to residents of Milwaukee County will continue to make claims with Milwaukee County as usual.

3. Funeral Homes making claims on residents outside of Milwaukee County will make their claims directly to the state using the contact information detailed in the attached memo from DHS.

4. Each funeral home should send a copy of its federal W-9 form to the address in the memo. The W-9 contains your basic business information the Department will use in processing and sending out the claim. The Department has poor records of funeral homes as compared to the counties and they need to build this information.

Scott Peterson

What is the new process?

(exerpted from D.H.S. memo to WFDA on 12-21-2011)

As of January 1, 2012, funeral and cemetery directors outside Milwaukee County should begin to use the following telephone number, fax number and/or email address to check the deceased individual's Medicaid eligibility, submit request and check on reimbursement requests that have been submitted.  The telephone will be answered from 7:45 a.m. to 4:30 p.m., Monday through Friday, and will have a voicemail box for any messages left after hours.

Payment for services will be made twice monthly.  In order to issue payment, DHS requires a W-9 for each funeral or cemetery business.  Please provide a copy of a W-9 for your business to the following:

Please contact Pang Xiong at (888) 859-0611. if you have any questions regarding this change.

Thank you.