Allowable Expenditures Limited by Concept of Reasonableness
Although many expenditures are allowable and are part of the normal spenddown, expenditures which are disproportionate or unreasonable will be denied. This concept is based upon my discussions with Medicaid supervisors rather than personal experience or regulation.
For example, if a single individual has a house and a $100,000 in cash, reasonable expenses on the house in preparation for sale are an acceptable spenddown. However, unjustifiable and unneeded expenses would be denied.
Post 8 indicates that family resources that are not part of the community spouse resource allowance, need not be spent on the nursing home. However, the expenditures that are not part of the protected amount are subject to reasonableness. Assuming $400,000 in resources and a community spouse resource allowance of $109,560, if the community spouse uses the balance to go on a trip around the world, this will be suspect.
Funds set aside for a family funeral plot are traditionally excludable under 10:71-4.4. However, expenditures for a plot during the Medicaid application process which are extraordinary will be carefully reviewed.
Prepaid funeral expenses (i.e. prepaid irrevocable funeral trust) must relate to actual expenses incurred. At one time, funds were paid in excess of the actual costs, and after the applicant received Medicaid, the balance of the monies paid were returned to the family. This is no longer allowable.
As indicated by Post 11, real estate owned by an applicant, spouse of an applicant, or jointly, is not counted as a resource. A spenddown technique which I have used has been to use funds to improve the property. My general approach has been to have the contractor verify the costs and have pictures of the property prior to the expenditure. Merely listing the expenditures on the home without verification could be denied as a spenddown.
Obviously, the list of such excess expenditures is infinite. Other thoughts that come to mind are the purchase of an inordinate amount of health insurance (see Post 1), payments by an applicant to a child in excess of what is reasonable in the community under a caretaker agreement (see Post 52), delay of inheritance to be received by the community spouse or applicant (not really excess funds, but in that category, see Posts 27 and 28), etc.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© September 2009, Post 53
Showing posts with label caretaker agreement. Show all posts
Showing posts with label caretaker agreement. Show all posts
Wednesday, September 9, 2009
Tuesday, August 25, 2009
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
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
Tuesday, August 18, 2009
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
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
Tuesday, July 21, 2009
The Necessity for Other Professionals
The Necessity for Other Professionals
I have often sought the need of other professionals in representing a client before the various County Boards of Social Services in seeking institutional Medicaid for a client. For example, the client may be coming to New Jersey and the family uncertain as to the appropriate type of facility available and appropriate. In such case, I recommend that the family consult with a geriatric care manager as to whether home, assisted living or institutional care might be the most appropriate place of residence. In this regard, the assessment of a geriatric care manager is necessary.
In preparing caretaker agreements (see Post 17), I seek an analysis by a geriatric care manager providing the prevailing rate for the value of services provided by a child. Pursuant to a properly drafted caretaker agreement, a list of services provided by the child is attached as is a valuation by a geriatric care manager. I have also found a geriatric care manager in conjunction with an accountant helpful in this regard.
An accountant is often necessary in the spenddown process. For example, we may want to prepay income taxes, not only for the spenddown, but also to avoid the situation of an individual or a community spouse having to pay income taxes after the date of qualification for Medicaid.
As discussed in Post 6, I often seek the assistance of a physician in describing the care provided by a child. This is helpful in establishing that a child had provided necessary care for two years in order to allow a transfer of the home (see Post 23).
I particularly seek counsel of lawyers from Legal Services. As a Legal Services volunteer, I have the privilege of having some outstanding Legal Services attorneys available for consult (I even call during a conference). The various benefits available to an individual are continually changing and Legal Services attorneys are generally aware of the status of waiver programs and similar issues.
Finally, but not least, no lawyer should function in the Medicaid area by himself or herself. Anonymously discussing complicated issues with various colleagues in the Medicaid area are often helpful to get another slant on a Medicaid plan. As lawyers are aware, many clients seeking Medicaid representation (and, of course, in other areas) anticipate one answer and that the answer will be simple. In this regard, it is my practice to have a telephone conference with a client before meeting, so that I can ascertain the facts as best as possible, so that the meeting is most productive.
That is, another helpful individual is the client. For instance, I am presently conferring with a client who owns the home as to whether the home should be sold and the client move in with one of her daughters who will provide care and the client will pay for such care pursuant to a caretaker agreement (see Post 17) from the proceeds of the sale of the client’s house. Another possibility is for the other daughter to move into the client’s house in hopes that two years pass so that the house can be transferred to the child as part of the Medicaid planning process (see Post 6). These issues were generated during telephone conference, not for purposes of resolving the issue, but for purposes of the client’s receptivity to discussing these alternatives.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2009, Post 46
I have often sought the need of other professionals in representing a client before the various County Boards of Social Services in seeking institutional Medicaid for a client. For example, the client may be coming to New Jersey and the family uncertain as to the appropriate type of facility available and appropriate. In such case, I recommend that the family consult with a geriatric care manager as to whether home, assisted living or institutional care might be the most appropriate place of residence. In this regard, the assessment of a geriatric care manager is necessary.
In preparing caretaker agreements (see Post 17), I seek an analysis by a geriatric care manager providing the prevailing rate for the value of services provided by a child. Pursuant to a properly drafted caretaker agreement, a list of services provided by the child is attached as is a valuation by a geriatric care manager. I have also found a geriatric care manager in conjunction with an accountant helpful in this regard.
An accountant is often necessary in the spenddown process. For example, we may want to prepay income taxes, not only for the spenddown, but also to avoid the situation of an individual or a community spouse having to pay income taxes after the date of qualification for Medicaid.
As discussed in Post 6, I often seek the assistance of a physician in describing the care provided by a child. This is helpful in establishing that a child had provided necessary care for two years in order to allow a transfer of the home (see Post 23).
I particularly seek counsel of lawyers from Legal Services. As a Legal Services volunteer, I have the privilege of having some outstanding Legal Services attorneys available for consult (I even call during a conference). The various benefits available to an individual are continually changing and Legal Services attorneys are generally aware of the status of waiver programs and similar issues.
Finally, but not least, no lawyer should function in the Medicaid area by himself or herself. Anonymously discussing complicated issues with various colleagues in the Medicaid area are often helpful to get another slant on a Medicaid plan. As lawyers are aware, many clients seeking Medicaid representation (and, of course, in other areas) anticipate one answer and that the answer will be simple. In this regard, it is my practice to have a telephone conference with a client before meeting, so that I can ascertain the facts as best as possible, so that the meeting is most productive.
That is, another helpful individual is the client. For instance, I am presently conferring with a client who owns the home as to whether the home should be sold and the client move in with one of her daughters who will provide care and the client will pay for such care pursuant to a caretaker agreement (see Post 17) from the proceeds of the sale of the client’s house. Another possibility is for the other daughter to move into the client’s house in hopes that two years pass so that the house can be transferred to the child as part of the Medicaid planning process (see Post 6). These issues were generated during telephone conference, not for purposes of resolving the issue, but for purposes of the client’s receptivity to discussing these alternatives.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© July 2009, Post 46
Monday, June 8, 2009
Caretaker Child - Practical Aspects
Caretaker Child – Practical Aspects
Prior posts have addressed mainly the rules and theoretical basis for various aspects of Medicaid planning. The next several articles will deal with practical applications of some of the aforementioned rules.
Suppose Mrs. Smith has a home, is competent, but is also a nursing home candidate. Susan, her daughter, has her own home and is willing to have Mrs. Smith move in and make improvements and/or expansions to her home to accommodate her mother.
The various posts (see Posts 6, 23)) that have been discussed are particularly applicable in this situation.
The plan would be for the daughter to make the necessary improvements and/or expansions on her home, Mrs. Smith would sell her home and move into Susan’s home. Prior to moving in there would be a caretaker agreement that would provide for the services and living arrangements to be provided by Susan in exchange for reimbursement by Mrs. Smith which would be set forth in a caretaker agreement.
Such an approach would not only save the value of the house of the family by way of payment to Susan, but would allow the mother to reside with her family and have care rather than live in a nursing home.
As indicated in Post 17, it is absolutely necessary that there be a third party valuation which sets forth the amount of payments to be made by Mrs. Smith. Such payments must be at the prevailing rate in the community. Any payments by Mrs. Smith in excess of that would be treated as a transfer.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2009, Post #40
Prior posts have addressed mainly the rules and theoretical basis for various aspects of Medicaid planning. The next several articles will deal with practical applications of some of the aforementioned rules.
Suppose Mrs. Smith has a home, is competent, but is also a nursing home candidate. Susan, her daughter, has her own home and is willing to have Mrs. Smith move in and make improvements and/or expansions to her home to accommodate her mother.
The various posts (see Posts 6, 23)) that have been discussed are particularly applicable in this situation.
The plan would be for the daughter to make the necessary improvements and/or expansions on her home, Mrs. Smith would sell her home and move into Susan’s home. Prior to moving in there would be a caretaker agreement that would provide for the services and living arrangements to be provided by Susan in exchange for reimbursement by Mrs. Smith which would be set forth in a caretaker agreement.
Such an approach would not only save the value of the house of the family by way of payment to Susan, but would allow the mother to reside with her family and have care rather than live in a nursing home.
As indicated in Post 17, it is absolutely necessary that there be a third party valuation which sets forth the amount of payments to be made by Mrs. Smith. Such payments must be at the prevailing rate in the community. Any payments by Mrs. Smith in excess of that would be treated as a transfer.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© June 2009, Post #40
Friday, May 1, 2009
The Problem of Recurrent Disqualification
The Problem of Recurrent Disqualification
A. A Medicaid recipient may be entitled to monies on a recurring basis, which will raise continuing disqualification problems.
1. For example, an individual may be entitled to several payments due to an asbestos class action recovery.
2. Such funds received during a given month not expended by the “first moment of the first day” of the subsequent month will result in disqualification if the resource requirement is exceeded.
B. Planning in advance may avoid disqualification.
1. Possible uses of such funds received on a recurrent basis are funeral expenses, clothing and outstanding medical bills.
2. If the Medicaid recipient has a caretaker agreement (see Post 17), which allows the recipient to reimburse a child or relative for prior services rendered by such individual, payments made under the agreement could solve the problem. Also, exempt transfers such as to a “disabled” child will ameliorate the problem.
3. All bills and expenses should be paid immediately. If receipt of the money causes the Medicaid recipient to exceed the resource requirement on the first of the next month, private payment must be made even if the monies available on the first of the month exceed the resource requirement by even a minimal amount.
4. Prepaid burial costs can be increased.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2009, Post #31
A. A Medicaid recipient may be entitled to monies on a recurring basis, which will raise continuing disqualification problems.
1. For example, an individual may be entitled to several payments due to an asbestos class action recovery.
2. Such funds received during a given month not expended by the “first moment of the first day” of the subsequent month will result in disqualification if the resource requirement is exceeded.
B. Planning in advance may avoid disqualification.
1. Possible uses of such funds received on a recurrent basis are funeral expenses, clothing and outstanding medical bills.
2. If the Medicaid recipient has a caretaker agreement (see Post 17), which allows the recipient to reimburse a child or relative for prior services rendered by such individual, payments made under the agreement could solve the problem. Also, exempt transfers such as to a “disabled” child will ameliorate the problem.
3. All bills and expenses should be paid immediately. If receipt of the money causes the Medicaid recipient to exceed the resource requirement on the first of the next month, private payment must be made even if the monies available on the first of the month exceed the resource requirement by even a minimal amount.
4. Prepaid burial costs can be increased.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2009, Post #31
Friday, March 27, 2009
Payment by Applicant for Care or Services Provided by Child
Payment by Applicant for Care or Services Provided by Child
A common occurrence is for a child to provide services in the past for someone who is now an applicant for Medicaid. The State takes the position that at the time the services by the child were delivered that they shall be presumed to have been intended to be delivered without compensation. Therefore, funds transferred by the applicant within the look-back rule to compensate a friend or relative shall be presumed to have been Medicaid penalizing transfers. This presumption may be rebutted by documentary evidence which was in existence at the time of the delivery of care or services by the child.
Generally, “documentary evidence” refers to a writing in the nature of a caretaker agreement by which the child would provide the necessary services (parent lived in home with child), which is intended to be reimbursed by the parent and avoid penalty implications.
Such caretaker agreement should include the following:
1. The specific nature of services provided by the child (delineated in an attached schedule to this agreement).
2. An independent valuation of such services possibly by a geriatric care manager if such services include care for the parent, tending to medical needs and related matters. I believe the independent valuation is absolutely necessary to maintain the validity of the agreement. Many attorneys draft caretaker agreements which include the attorney’s estimate of such value. In this regard, the State takes the position that “the amount of compensation or the fair market value of asset transferred [by the applicant] shall not be greater than the prevailing rates for similar care or services in the community. That portion of compensation in excess of the prevailing rate shall be considered to be uncompensated value.” Any portion in excess of such rates shall be deemed a transfer for eligibility purposes.
An improperly drafted agreement can raise very serious problems, particularly under the new transfer rules.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© March 2009, Post #17
A common occurrence is for a child to provide services in the past for someone who is now an applicant for Medicaid. The State takes the position that at the time the services by the child were delivered that they shall be presumed to have been intended to be delivered without compensation. Therefore, funds transferred by the applicant within the look-back rule to compensate a friend or relative shall be presumed to have been Medicaid penalizing transfers. This presumption may be rebutted by documentary evidence which was in existence at the time of the delivery of care or services by the child.
Generally, “documentary evidence” refers to a writing in the nature of a caretaker agreement by which the child would provide the necessary services (parent lived in home with child), which is intended to be reimbursed by the parent and avoid penalty implications.
Such caretaker agreement should include the following:
1. The specific nature of services provided by the child (delineated in an attached schedule to this agreement).
2. An independent valuation of such services possibly by a geriatric care manager if such services include care for the parent, tending to medical needs and related matters. I believe the independent valuation is absolutely necessary to maintain the validity of the agreement. Many attorneys draft caretaker agreements which include the attorney’s estimate of such value. In this regard, the State takes the position that “the amount of compensation or the fair market value of asset transferred [by the applicant] shall not be greater than the prevailing rates for similar care or services in the community. That portion of compensation in excess of the prevailing rate shall be considered to be uncompensated value.” Any portion in excess of such rates shall be deemed a transfer for eligibility purposes.
An improperly drafted agreement can raise very serious problems, particularly under the new transfer rules.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© March 2009, Post #17
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