Many seniors would rather stay at home instead of entering a nursing home. As such, many of those seniors employ home health aides to help with care in their home. Usually, these payments would not incur a penalty for later Medicaid-eligibility considerations, as they are for services received at fair market value and are for a purpose other than to qualify for Medicaid. However, a recent case showcases how this arrangement can sometimes go awry and incur a penalty period, should Medicaid later be needed.
In this case, D.Z. was found eligible for Medicaid benefits, but the Division of Medical Assistance and Health Services (DMAHS) imposed a penalty of $207,525.93 on her for assets transferred during the five-year look-back period.
D.Z. had hired three health care aides to assist her at home in the year before she was transferred to a nursing facility. These aides helped her with dressing, walking, bathing, cooking, cleaning, and laundry in rotating shifts of several days. One aide lived with D.Z. full time for several months. Two were paid approximately $13 to $15 an hour, while the third was paid approximately $700 to $750 per week. D.Z. paid by check. Checks were occasionally made out to “cash,” and some conflated the aides’ compensation with D.Z.’s personal expenses. For example, if D.Z. needed some shopping done, she would draft one check out that included the cost for the items needed combined with the aide’s employment payment, and simply write the name of the store in the memo line of the check. Several checks were also made out for payment of homeowners’ association fees, local property taxes, and carpet cleaning expenses.
An administrative law judge initially decided to modify the amount of the transfer penalty, because the payments for home health care were not subject to the look-back penalty because they were exclusively for a purpose other than to qualify for Medicaid. In addition, the payment of homeowners’ association fees, local property taxes, and carpet cleaning expenses were also excludable from the transfer penalty.
The Director found that the record contained no evidence of a caregiver agreement establishing the expectations of care and compensation for services between D.Z. and her aides or that the aides were certified, warranting compensation at the rates paid. Furthermore, the checks were inconsistent, and were issued at a time when D.Z.’s daughter-in-law was caring for her.
It is critically important to see an Elder Law Attorney to avoid these types of costly mistakes. Call us for a free consultation.