State Takes Restrictive Position on Caretaker Agreements

State Takes Restrictive Position on Caretaker Agreements

Post 6 and Post 34 have discussed caretaker agreements extensively. Basically, we are talking about an agreement pursuant to which a child agrees, prior to rendering services, to care for a parent in consideration for the parent’s compensation to the child for such care.

The prior posts have indicated that in addition to the agreement, there should be a schedule of activities performed by the child and an independent valuation of services by a geriatric care manager or agency.

Properly structured, the payment by the applicant to the child for such services would not result in Medicaid transfers.

In early March, 2009, Medicaid, at a meeting of supervisors, set forth the following restrictions:

1. The amount that the child should be reimbursed for care is the amount of monies that an aide would receive for the relevant time period and not the amount of monies that the aide’s agency receives. For example, if the agency receives $20.00 per hour and the aide receives $10.00 per hour, the proper reimbursement for the child is $10.00 per hour. As the prior posts indicate, compensation in excess of that considered reasonable by the respective Board of Social Services is deemed a transfer.

2. Child must report any monies received from parent on income tax return.

3. There shall be no payments for future care. That is, some agreements have allowed the parent to make substantial payments “up front” rather than on a recurrent basis. This would not be acceptable to Medicaid.

Comment: Such an approach seems unduly restrictive. I have had clients who have provided virtually round-the-clock care for a parent and rendered services such as daily testing, taking the parent to the doctor, providing and administering medicines, coordinating care of the parent with the various physicians, taking the parent on a short vacation or stay (if possible), etc. The compensation for such services should not be limited to that received by an aide, but should be based upon an appropriate valuation by a geriatric care manager. Another example of additional compensation would be a situation in which the child actually builds a wing on his or her home or hires an architect to make the home accessible to a disabled parent. Restricting the compensation to the child as proposed by Medicaid appears to be unfair. Hopefully, the structure allowed for a caretaker agreement will be loosened.

Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.


© August 2009, Post 52