The Issue
The use of a Caregiver Agreement is an extremely important topic that most people don’t learn about it until it’s too late. Did you know that prior to making any payments for caregiver services you must have a signed Caregiver Agreement that was ordered by a doctor in writing? If you or someone you know wishes to stay out of a nursing home and receive paid caregiver services at home – beware of the consequences!
The Law
The need for a Medicaid-compliant Caregiver Agreement comes from a very important Michigan Court of Appeals case, Jensen v Department of Human Services (Unpublished Opinion, dated February 19, 2015, No. 319098).
In this case, the Court of Appeals interpreted a Medicaid Agency policy regarding the payment for caregiver services. This case got to the Court of Appeals after the Michigan Department of Human Services (DHS or the Medicaid Agency) denied Betty Jensen Medicaid benefits because she had spent her own money paying for a non-relative to take care of her at home so she could stay out of a nursing home.
After paying approximately $19,000 for about 10 months of in-home care, Ms. Jensen’s condition worsened and she needed to move into a nursing home. Ms. Jensen’s benefits were denied, in part, due to these private payments for caregiver services.
The Medicaid Agency penalized Ms. Jensen stating that those payments were “divestment” because the payments were not made under a signed, Medicaid-compliant, Caregiver Agreement. When the transfer of funds is considered “divestment” the Medicaid Agency treats it the same as if it were a gift or an attempt to hide money.
Is This an Example of No Good Deed Going Unpunished?
Ms. Jensen’s family tried to keep her out of a nursing home. By doing so, she was given a chance to never need to apply for Medicaid, which would have saved the State money. Just like Ms. Jensen, most people would prefer to remain in their own home for as long as possible since virtually no one prefers to live in a nursing home. Therefore, paying for caregiver services at home is a common alternative choice.
However, just as in the Jensen case, after trying to stay at home it may still become medically or financially necessary to move into a nursing home. If that happens and the person’s money runs out, Medicaid is the payer of last resort to pay for the nursing home costs. Unfortunately, because of the Jensen case, the Medicaid Agency will deny benefits to anyone who paid for caregiver services if payment was made prior to having a fully executed Medicaid-compliant Caregiver Agreement. So, even after spending your money to stay out of a nursing home and saving the State money, if you end up needing Medicaid, you could be punished.
The Good News
The good news is that this problem is easy to avoid by using a Medicaid-compliant Caregiver Agreement. Such an Agreement must include and/or comply with all 10 of the following provisions:
1) Care services must be performed and payment for services must be made after the Agreement is executed and payment cannot be made prospectively;
2) The person receiving services cannot be residing in a nursing facility, adult foster care home, or hospital a the time services are provided;
3) The person receiving services must not be eligible to receive home and community based waiver services, adult home health or home help;
4) The services must be recommended in writing and signed by the person’s physician who states that the services are needed to keep the person out of nursing or residential care;
5) The Agreement must include the type, frequency, and duration of services;
6) Paid for services cannot include the provision of companionship;
7) The Agreement must include the amount of payment in terms of money and/or property for the caregiver to receive;
8) The payment amount for services must be at a rate that is consistent with fair market value for such services in the area;
9) The Agreement must be signed by the care provider and the person who will be receiving services (or his or her legally authorized representative) and, if signed by the legal representative that cannot be the same person as the care provider; and
10) The Agreement must be dated and signatures notarized.
Any payments made before the fully executed Agreement will be deemed by the Medicaid agency as being divestment and cause a period of ineligibility for Medicaid.
More Good News
Even if payment for caregiver services has already been made without having the proper Medicaid-compliant Caregiver Agreement as outlined above, it may still be possible to avoid the punitive presumption that stems from the Jensen case. Unique sympathetic facts may persuade a judge to provide relief. Also, there may by alternative planning options that could avoid or minimize a negative result. Every case is unique involving unique facts and remedies. If you or someone you know can benefit from learning more about Medicaid-compliant Caregiver Agreements we are here to help.
Written by Sanford (Sandy) J. Mall, JD, CELA, CAP, VA Accredited Attorney. Sandy is the founder and senior partner of Mall Malisow & Cooney, P.C – The Holistic ElderCare, Special Needs & Estate Planning Law Firm located in Farmington Hills, Oakland County, Michigan. Attorney Mall and his firm are Featured in ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources to help families plan for and deal with the issues of Aging.