Elder penalized for wages paid to family caregiver, due to insufficient evidence

When a person applies for Medicaid to pay for home care or nursing home care, a penalty will be imposed if assets were given away during the preceding five year “look-back” period. There are numerous regulations in federal and state law  concerning “uncompensated transfers,” which are gifts.  A “gift” is distinguished by law from a “payment for goods and services at fair market value.” In general, any transfer of money from a Medicaid applicant to their family members during the look-back period will be suspected to be a gift unless there is credible proof that it was payment for something. For example, the child may be employed by the parent, or the child may have sold something to the parent. The applicant must show that the payment was not a gift.

In situations where the elder is paying their family member on an ongoing basis to provide home care services, the proofs become very important, so as to prove that this is wages and not a “gift.”  Greater scrutiny is given to those situations than to the situation where a non-family member is the paid Aide. Extensive evidence is needed to satisfy the agency that the work was actually done, that there was specified terms of employment, and that the wage was consistent with prevailing wages (i.e. not a wage of $70 an hour for work which is normally paid for at $15 an hour). A written contract isn’t explicitly required, but a recent case strongly suggests that it is needed.

Suppose, though, that the child is being paid now for caregiving services that were allegedly provided in the past? A payment made after the fact to a family member for alleged caregiving services is presumed to be a gift, if services were performed for free before the payment was made and there was no pre-existing written contract spelling it all out.  For such situations, the burden of proof is on the applicant to produce “credible documentary evidence preexisting the delivery of the care or services indicating the type and terms of compensation,” as well as proof that the wage was at “prevailing rates for similar care or services in the community.”  N.J.A.C. 10:71-4.10(b)6.ii.

The recent decision in E.B. vs. DMAHS  illustrates the common problem all too well. The decision is not approved for publication, which means it is non-precedential and is limited to its facts and the parties in the case.

E.B. moved into her daughter’s home, and the daughter began providing some  caregiving services when she was not at her job. After two years,  the daughter quit her job and became the full-time aide. The absence of income began to create a hardship for her. She was the Agent under Power of Attorney for her mother. She did some research about prevailing wage for this kind of work, and then using her mother’s funds,  she began to pay herself $10 per hour for 40 hours a week of home care companionship services plus $25 per week for the two-and-a-half hours she claimed she spent each week to shop for petitioner’s food, medication, and toiletries, “for a total of  $425 per week from April 2011 to May 2013, when petitioner entered the nursing home. J.W. did not keep a ledger of the services she provided and the days and hours she performed them. J.W. claimed that, when lucid, her mother understood and agreed to J.W. paying herself from petitioner’s funds to compensate J.W. for her services.”

When E.B.  applied for Medicaid to pay for her care, she was penalized for the $69,211.90 she had paid her daughter. (note that this amount divided by $425 is just over 36 months, so part of the payment must have reflected post-facto payment for work previously done). After a hearing with testimony and other evidence at the Office of Administrative Law, the penalty was upheld by the Division (DMAHS), and this appeal followed. The Appellate Court upheld the penalty.

The Administrative Law Judge found that (1) there was insufficient proof of the actual tasks performed, (2) there was insufficient proof that  rate selected was prevailing wage, and (3) there was no pre-existing written contract. The Judge held it against her that she began receiving wages when it was “foreseeable that [petitioner’s] advanced age and deteriorating condition would require intensive care and the possibility of entering a nursing care facility.”  This is a completely irrelevant consideration, as a person receiving care in the home would otherwise have to BE in the nursing home!!  The Director of Medicaid affirmed those conclusions.

The primary problem for E.B. was that the Medicaid Agency was not satisfied with the proofs provided.  The Appellate Court emphasized that there was no written agreement specifying terms of employment, and there were no records showing exactly what work was done, when and how. However, the Court was harsh, criticizing the daughter for choosing to be the caregiver rather than hiring somebody outside the family. I find this criticism deeply disturbing and unfair. National and state policy encourages people to take care of their family members, and in fact, the Medicaid home care program is only part time because it is presumed that there is someone available to fill in the gaps. Further, the Court did not distinguish between the payments for ongoing work and the payment for work previously done.  The Court found that “Petitioner did not rebut this presumption. She did not provide the requisite “convincing evidence” the asset was transferred exclusively for some purpose other than to establish eligibility. First, J.W. did not show why she could not have paid a competent professional ten dollars per hour to take care of her mother, which would have freed her up to return to work. As a former claims adjuster, presumably J.W. was capable of earning more than ten dollars per hour and, thus, would have been in a better position to address her budget needs. Further, while a third party may not have been a relative, that does not mean a competent professional caretaker could not have been located to meet petitioner’s needs.amount of proof that this was payment of wages for work that was actually done.”

The lesson here is that it is still perfectly legal for children to be employed by their parents to provide senior care in the home. However, the demands of the Medicaid program for elaborate proofs to disprove the notion that a payment was a gift require the applicant to prepare a strong paper trail coupled with  enough corroborating formal evidence to satisfy a state auditor. Informal verbal arrangements will not be sufficient. Assembling proof beyond a reasonable doubt is the safest approach to take.

Call for advice about home care plans, employment contracts, Medicaid applications and appeals …. 732-382-6070

What if the Medicaid home care services aren’t provided? part II

Previously I blogged about the problems faced by Medicaid-eligible people living in home and community-based settings when there isn’t a sufficient provider network to provide the services needed to maintain them in their residences, or there is substantial delay in getting the services started. The issue is that the government is obligated to provide the services in the least-restrictive setting under the Olmstead decision and the Americans with Disabilities Act (“ADA”) Now there are developments in Ohio which deal with that problem. In Ball, Burba et al. v. Kasich, Governor of Ohio, the  plaintiffs alleged that “ the failure of defendants, Ohio’s governor and several state agencies, to provide them with home- and community-based services forces plaintiffs to rely on volunteer family caregivers to remain at home and places them at serious risk of institutionalization in a large Intermediate Care Facility (“ICF”).” The State moved to dismiss, saying that being ‘at risk” doesn’t give them standing to sue. The U.S. Department of Justice has now filed a Statement of Interest, asking to intervene (i.e., participate) in the case.

The USA wrote to the Judge that “The United States files this Statement of Interest to clarify that non-institutionalized individuals with disabilities who are not currently receiving state-funded home- and community-based services may bring a claim that a public entity has placed them at risk of institutionalization or segregation in violation of the “integration mandate” of Title II of the Americans with Disabilities Act. See 28 U.S.C. § 517. “

To me, this is an exciting development. Eligible people who aren’t receiving services to which they are entitled are clearly being injured by such governmental delay. People who need 24/7 care and lack sufficient care services in their homes are clearly at risk of nursing home placement. The injury could be irreparable.

Call us for advice and assistance with Medicaid applications and advocacy for services … 732-382-6070

When the caregiving ends, new problems to tackle as Executor

In our legal practice, we advise  many family caregivers who are managing and supporting the lives of their frail loved ones, and  we also advise executors in the administration of estates. Very often, the person who was our client in their role of caregiver is now the client in the role of executor. It’s a very tender time when that transition occurs.

They  may have spent years involved with their parent who  had dementia or chronic illness, and the client’s life has been intertwined with the parent’s on a day to day basis. It’s been an emotional roller coaster for several years. The sense of self, role and identity have been strongly defined by the responsibilities of the caregiving. In these situations, the loss of the parent often leaves a gaping void that makes them feel as if they are drowning. They have trouble managing their day to day life because the focus of their activity is gone. There is a deep grieving process. They may have become isolated. And now, other family members are expecting them to jump and handle all  the dry and technical tasks of wrapping up the estate and distributing the money.

The challenge is that the executor has duties under the law to marshall the assets, resolve or pay the creditors, and distribute the estate in a reasonable period of time. There may be ambiguities in the Will that require court action to resolve. It may be that a beneficiary is disabled and a trust has to be established for them. It’s a big job and there can be serious repercussions when the job isn’t done.

There is help available. The National Family Caregivers Association has a Bereavement Program that could be of great use to someone caught in this situation. Ask for their article “Who am I Now that I am not a Caregiver?” Check out this website at AARP, Certain local family counselling services may be specially designed to help you with this unique issue, and enable you to start moving ahead, one step at a time..

Call us for advice and assistance with estate administration, probate and executor work … 732-382-6070

It could happen here — wages paid for caregiver services can be treated as gifts

A recent appellate case in Michigan involved a Medicaid applicant who was paying a private home caregiver during the years just preceding his Medicaid application. The employee was not related to him. He paid a rate that was reasonable and necessary to maintain him at home. However, there was no advance written contract for the work to be done. When she applied for Medicaid benefits, all of those payments were reclassified as “gifts” or “uncompensated transfers.” Why? because the State’s Medicaid regulations stated that payments to caregivers would be treated as gifts unless — among other things — there was a written and signed contract. Jensen v. Department of Human Services, (Mich. Ct. App. No. 319098, Feb. 19, 2015)  2015-319098 2015-319098

You know by now from reading this Blog that when a Medicaid application is filed, they look to see whether the applicant made any “gifts” during the prior five years, and the applicant gets penalized for most gifts. New Jersey has a specific rule concerning payments that people make to in-home caregivers. The rule is N.J.A.C. 10:71-4.10(b).6.i. By its terms, the rule applies to after-the-fact payments “intended to compensate a friend or relative for care or services provided in the past … for free.” An after-the-fact payment is presumed to be a gift. Very often, people think that they can be just be paid later on (during the spend-down for Medicaid). Doing it that way can create a problem.

So, the rule says that “this presumption can be rebutted” if there is  “credible preexisting documentary evidence preexisting the delivery of the care or services indicating the type and terms of compensation.”  In plain English, this means that people who are hiring caregivers in their homes should establish written employment agreements before the services are rendered. The rule also requires that the payment be “not greater than the prevailing rate for similar care or services.” Although the word “relative” may be easy to define and limit, the word “friend” is potentially troublesome, so it should be assumed that this rule has broader scope than it might appear.

The New Jersey rule only imposes the two requirements that are written in it — an advance written agreement, and fair market rates. Other states, such as Michigan, impose many additional requirements. Nevertheless, you may encounter situations where a local NJ Medicaid agency endeavors to add requirements that are not contained in the State’s rules. Legal advice can be helpful at such times.

Careful planning can prevent a crisis .. for legal advice about Medicaid eligibility and elder care, call 732-382-6070

“I am spending so much time caring for him that I can’t take care of myself.”

A few days ago, I overheard a conversation between two women who I think are in their  80’s. Evidently, the husband of one of them has been ill for about a year. It sounded like among other things, he may have diabetes mellitus that has progressively caused deterioration including retinopathy (impaired and blurry vision) (“he can barely see” and “I have to give him his insulin now”), skin deterioration and wounds that don’t heal (“I have to call the doctor anytime his skin changes color”) , and peripheral neuropathy in the feet (“he can hardly walk” and “I have to stay nearby him all the time.”). It also sounded like he had some kind of heart condition so that any kind of exertion is now fatiguing. She told her friend that she was utterly exhausted and had medical problems of her own that needed to be treated but because they would require convalescence, she just felt she had to keep putting them off.

Caregiver spouses need more support. People shouldn’t have to make such choices. There is a tremendous need for hospital discharge planners and even doctors in the community to provide information and guidance about the availability of services and the benefits to the both the family caregiver and the patient. Medical insurance plans generally will not provide in-home home health maintenance services, and this level of health care is seen as somehow different than curative health care. Patients in the community are often left to cobble together their own arrangements. There are endless choices,  and it’s emotionally complicated for the caregiver.

In-home caregiving can be an all- consuming responsibility. The caregiver may find it impossible to go out to do errands or handle their own appointments. The caregiver may have no time during the day that they aren’t on duty. They may be wakened during the night to care for the patient.

There are many ways for people to get help with this kind of complex inhome nursing care, but the process can be daunting and emotionally difficult. Some people just aren’t aware of the options. Other people have trouble getting comfortable with the idea of a stranger being in their home every day. Still other  people feel that no matter how great the personal sacrifice, no one would provide as good a level of care as they could provide to their loved one.Yet, the patient is at risk when the family caregiver’s health and mental well being are fraying.

For patients whose medical needs are moderate but who require supervision and cueing due to dementia and memory impairment, many assisted living facilities can provide periodic short stays that are called “respite care.” For patients whose medical and nursing needs are more complex, there is no reason they couldn’t receive that care in a nursing home. Of course there is a cost, but if the caregiver is on the brink of collapse, the cost could be well worth it. There is also a state funded respite care program. It can be contacted through local social services agencies and visiting nurses agencies.

Home care can be arranged  to supplement what the family member provides. ltc_guide   An aide can be hired for a predictable schedule such as certain afternoons every week from 12 to 4. Agencies will always require that there be a block of at least 3 hours per day nd that the schedule be predictable. Having a system like this will enable the caregiver to make their own appointments with doctors, dentist, shopping, and so on, knowing that their loved one is protected and not being left alone. Also in this way, the caregiver will be spared the hassle of making multiple phone calls to friends, family, church volunteers etc to see who might be available on a certain day at a certain time so that the caregiver can get out and take care of something that’s necessary. Some caregivers are reluctant to commit to a regular schedule with an agency because they feel they may be wasting money if there’s no need to go out of the house for an appointmen t or errand on that day. However, my clients who have integrated regular supplemental home care find that it gives them a cherished break, and they feel they are less stressed and less tired when they are “on duty.”

If you are a family caregiver, there are many places you can turn to for support and respite. By taking good care of yourself, you can be a better caregiver for your loved one.

 Call us for legal assistance with elder care planning and government benefits programs … 732-382-6070