Adult children and grandchildren of nursing home patients are often integrally involved with handling all of the patient’s non-custodial care needs and even spend considerable time with the patient providing transportation or tending to his or her other needs. Family members do this for the patient but often at considerable personal loss of their free time or earning potential. Most people who get this kind of care long before they get to a nursing home like to give the helpful family member payment to defray expenses or show appreciation. Medicaid views the care taking of the patient to be gratis; and payment for such a gift, subject to a penalty.
To avoid this, a legal contract can be created between the patient and the caregiver that formalizes the relationship and turns what would be a penalizing gift into a fair-value payment for services. It may be best to formalize this type of relationship with a contract going forward to make sure that future payments do not trigger unfavorable treatment when Medicaid eligibility is needed. Contracts can only be prospective; any services provided before the contract was made effective are considered gratis, and the contract cannot go backwards and authorize payment for these previous services – nor change the treatment of pre-contract payments to alleviate divestment penalties.
Formalization triggers a host of other important issues that must be addressed. The contract itself should be formally prepared and executed, following all professionally-accepted standards. The types of services to be paid for and expected to be performed should be enumerated in the contract, as well as a fair-market value rate for those services that are comparable to the rates paid for similar services from commercial agencies. If a person overpays the care provider, the difference between the payment and going rate will be considered a divestment, subject to a penalty. A detailed work log should be kept documenting services so no overpayment can be alleged, and all payments should follow IRS regulations on reporting and taxation. A CPA or qualified tax preparer may need to be consulted to make sure payments do not run afoul of these rules.
Personal-service contracts are considered quid pro quo in real time. Payments made under the contracts are normally for services rendered now – not completed in the distant past and not to be done in the future. A list of common activities performed by family care givers may include the following:
- Monitor the health status.
- Have doctors, home health care agencies, nurses, nurses’ assistants, aides, homemakers, attendants and other care providers provide treatment and care services.
- Attempt to secure hospital, nursing home and rehabilitation services and treatment based on assessments of needs, wishes, and advance health care directives.
- Oversee care afforded by care providers, hospitals, nursing homes and rehabilitation facilities to attempt to assure the adequacy and quality thereof.
- Visit periodically, at least once weekly, except at such times as Provider shall be ill or on vacation or on business trips.
- Attempt to amuse and entertain to a reasonable extent and offer, or attempt to furnish to extent reasonable, efficient, and practical, books, videos, television viewing opportunities, and visits with family and friends.
- Purchase entertainment, clothing, personal effects, food and drinks, personal hygiene items, goods and wares as the deemed necessary, practical and reasonable for the maintenance, amusement and comfort.
- Chauffeur to care providers, visitations with family and friends, amusements, for shopping, food and drink purchases, and other locations.
- Shave, cut and set hair, wash and dress unless services of others are available.
- Aid Client in letter writing and telephonic communication to others or relay messages.
- Arrange for funeral arrangements per wishes.
- Oversee the efficacy and accounting of investments.
- See that all costs and expenses of care, entertainment, household, housing, personal needs and obligations are met.