Long Term Care Planner: Individual
Caregiver Contracts that Protect Elders,
and Their Family Members
A written Caregiver Contract is a good idea for every family that wants to protect family harmony, and make sure everyone in the family understands how care is being provided to an elder.
The family member who provides care can save an elder from needing nursing home services, and may also protect assets if nursing home care is needed in the future. Elders who want to cover all of these bases must have a written Caregiver Contract. Whenever adult children and other family members are providing valuable care, only a written agreement will protect assets from nursing home care costs and qualify the elder for Medicaid.
The Appeals Court concluded: “we are not in any way suggesting that all lump-sum prepaid contracts or all contracts between family members for personal services are disqualified. Our decision is limited to those contracts in which compensation does not reflect fair market value, as was the case here.” If you are interested in a Caregiver Contract that would be accepted by Medicaid if nursing home care is ever needed in the future, call us today. >> Read the 5 page case. >> Case status.
The Massachusetts Legislature is considering guidelines for home care contracts that protect elders from incurring a transfer penalty if they need to apply for Medicaid nursing home benefits. Legislation Protecting Family Members Who Provide Personal Care to Elders has been proposed by Representative Kahn and Senator Montigny, that would set guidelines for caregiver contracts in Massachusetts. House bill, HB 1097 and Senate bill SB 278, would allow elders to contract and pay family members for personal care and management services, without fearing that MassHealth would later hit them with a transfer penalty. The legislation does require that the contract services be necessary to prevent an assisted living or nursing home placement. The contract would have to include details of the services, frequently and duration of the services. Payment would have to be fair market value based on the experience and qualifications of the caregiver. Last year, the. Office of Medicaid urged restrictions on personal care contracts, based on rules in other states that put restrictions on
• reimbursement rates, such as $10 per hour allowed in Vermont, or minimum wage allowed in Kansas
• documentation of the agreement, such as rules in New York which presumes that all resources were transferred for the purpose of establishing eligibility for Medicaid and requires the member to supply convincing evidence to the contrary
• time of payment rules requiring services be rendered before payments are made, rather than advance payments for future services
• prescription requirements allowing only reimbursement for services recommended in writing by a physician (as required in Maine)
• payment ceilings limiting the total amount paid for care to no more than $30,000 (as in Vermont)
Read Complete Letter>>> Because official guideline have not been established by the state, it is very important to carefully document home care agreements with family members:
With Elder Law Counsel and Planning: |
Without Elder Law Counsel and Planning: |
Example of a Caregiver Contract that covers all the bases.
Care Giver Contract Example: Pam and Patricia are sisters who want to make sure that Marge, their mother, is receiving care and attention at home. Pam lives close to her mother's home,
and can budget time to provide regular care. Patricia lives in another state and
is busy with a career that prevents
her from visiting her mother regularly. A written agreement providing compensation to Pam for the hours she provides care will recognize the work that Pam is doing, and prevent misunderstandings with Patricia over the extent of Pam's responsibilities. • If Marge needs nursing home care in the future, Medicaid cannot disqualify Marge for the money she paid to Pam. There is a written agreement! Plus, the caregiver contract helps the family: • provide an organized schedule for care and other services • prevent arguments and misunderstandings among family members |
February, 2010 - Norfolk County Superior Court rejects a Mother-Son caregiver contract that was intended to protect $182,000. The judge declared the agreement invalid because the mother did not have mental capacity when the agreement was signed, and there was no conservator appointed to sign for her. The court had no evidence showing the transfer of money was intended to pay for her care. Son intended to keep his mother comfortable and safe in his home, but could not meet the burden of proof required to persuade Medicaid hearing officer that his mother intended, at the time the services were rendered, to pay for the work. The family that provided round the clock elder care at home now had a $182,000 Medicaid transfer penalty. Read the case. February, 2007 - Massachusetts Appeals Court rules that proceeds from sale of elder's house in Swampscott must go to nursing home care, even though her daughter and son-in-law had spent their money and vacation time renovating the house so it could be sold. "No evidence at all that the plaintiff intended to pay her daughter and son-in-law for their labor . . . .services rendered to an elder by a family member are presumed to be gratuitous and without expectation of compensation unless the applicant can prove that he or she intended, at the time those services were rendered, to pay for them." Read the case: Andrews v. Div of Medical Assistance |
These cases illustrate the reasons to consult an elder law attorney to protect your interests if family members are providing valuable elder care services. The agreement cannot be a last minute deal among family members. The agreement must be carefully prepared, in case the elder eventually needs Medicaid eligibility to pay for nursing home care in the future. Medicaid in Massachusetts has issued a memo that requires review of all Caregiver Contracts by the Office of Medicaid legal department in Boston.
The care that you provide can range from part time services to 24 / 7 care and supervision of professional paid care givers. If an adult child or daughter in law takes responsibility for meeting an elder's needs, a caregiver contract can prevent Medicaid from disregarding the value of those services. When the care giver agreement is accepted by Medicaid, it can reduce the size of an elder’s estate, and allow earlier eligibility for Medicaid long term care nursing home coverage. Call us at 567-5600 if you would like us to prepare a Caregiver Contract that suits your specific needs.
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