It is becoming more and more common, and encouraged, for those who are in increasing need of medical services to stay at home and receive the needed care in-home. What are the rules when someone is providing such care?
Anyone can provide care to an individual in need, but states have different rules for payment for such care depending on the relationship of the caregiver to the care receiver. Every state has such programs, but the rules vary by state.
For Medicaid purposes, in Pennsylvania, when a close family member such a child or sibling provides in-home care for a person who needs or may in the future need skilled nursing level of care, such as provided in a nursing home, the state presumes that care is provided out of love and affection, and the state will not recognize payments made to that care-giver for such care.
That rule can be very costly to a person who is applying for Medicaid to pay for skilled nursing level of care. However, there is an exception: if the caregiver and the care receiver have an appropriate written caregiver agreement, the state will approve payments under that agreement.
Caregiver agreements need to meet certain criteria to pass muster for Medicaid. Essentially, they must be drafted the same as contracts for care between professional caregivers and care receivers. They should specifically and in detail spell out the services provided, such as room and board if the care receiver is living in the care-giver’s home, and specific services to be provided by the caregiver, such as meals, specific chores or tasks provided, and the like.
The agreement should also set out the time spent on each such service, and determine a value for, or an hourly rate at which, those services are provided, which cannot be any more than the rate that professional third party providers or agencies would charge for the same or similar services. The agreement needs to spell out the duties and responsibilities in a way which Medicaid will approve. Thus, it is important that such agreements are prepared by an attorney who is familiar with the requirements for Medicaid eligibility.
It is even possible to have a Medicaid-compliant caregiver agreement if the care receiver is giving a lump sum, and not a monthly payment, to the caregiver, such as, for example, when a parent gives a child a cash payment to add an addition onto the child’s house for the care receiver to live in, commonly known as “in-law quarters”.
However, these types of payments are tricky, and the caregiver agreement has to be carefully drafted to avoid having all or some of the payment disallowed by Medicaid, and a penalty imposed on the care receiver when he or she applies for Medicaid for skilled nursing level of care.
Even non-professional third parties who provide care, such as loving friends or more distant relatives, should have a written caregiver agreement with the care receiver, to assure that, in the event that the care receiver applies for Medicaid, the payments made for such care will be approved, and not be considered benefit-delaying gifts.
The importance of properly drafted caregiver agreements cannot be overstated, as a poorly or inadequately drafted agreement will result in penalties or delay in Medicaid benefits. Thus, if you are considering the need to provide care to someone in need of some level of care, you should consult with an attorney who is quite familiar with the requirements for Medicaid eligibility as early as possible to discuss the appropriateness of a caregiver agreement. We can help! Just fill out our short online form by clicking here and we'll be in touch.
Jeffrey Bellomo, Esq.
