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Many times, a family member or friend will help “mom” at home for a while before “mom” finally enters a nursing home. Frequently, “mom” will want to pay that care giver, and the care giver will want to be paid for her work. Paying a family member or friend for helping can create a problem when “mom” applies for nursing home Medicaid unless the payments conform to West Virginia Medicaid rules we’ll look at today.

Medicaid presumes that a family member or friend helps for free, motivated by love and affection for “mom.” Thus, any payment from “mom” to the care giver is presumed not to be pay for work provided, but, rather, a gift from “mom” to the care giver. Any gifts “mom” makes during the five-years before she enters the nursing home will delay when she can get Medicaid to help her pay her nursing home bills. Thus, if not done correctly, the payments to the care giver will be deemed to be gifts, delaying when Medicaid will help “mom” pay her nursing home bills.

To overcome Medicaid’s presumption that payments to a family member or friend actually were gifts, here are the things the new West Virginia regulations require “mom” to prove:

1. Before the help being paid for was provided, “mom” and her care giver entered into a “Personal Care Contract” (“PCC”) which meets the following requirements for such contracts:

2. The PCC must be in writing and signed by the care giver and “mom” or “mom’s” authorized representative (such as her attorney in fact); and,

3. The length of the PCC must not be longer than “mom’s” actuarially projected life-span.

The caseworker actually must review the PCC and make sure it includes:

4. A detailed description of the services provided to “mom” in the home, and,

5. Specifies the frequency and duration when the services were to be provided. The services must be measurable and verifiable and the compensation to the care giver must be reasonable in relation to what the care giver is going to do. Payment must be defined either as a set amount or an amount to be determined by an agreed-upon hourly rate that will be multiplied by the hours worked;

6. The compensation must be reasonable when compared to what homecare agencies or other independent care givers in the locale at the time would charge for doing the same services;

7. The PCC must describe what services, if any, the care giver is to provide when “mom” is in an assisted living facility, nursing home, or other type of care facility on a temporary basis, and what the reasonable compensation for those reduced services will be;

8. The services must have been rendered AFTER the PCC was signed;

9. It will be assumed unless proven otherwise that “mom’s” personal care services were provided by the staff when she was in assisted living, nursing home, or other care facility (in other words, the bug is on the care giver’s back to prove she actually provided services during such times);

10. When “mom” received the services, the services must have been recommended in a signed writing by “mom’s” physician as necessary to prevent “mom” from being in an assisted living or nursing home facility; and,

11. “Mom” must pay for the services contemporaneously with when they are provided and any advance payment for services projected to occur in the future will be treated as a gift. For example, if in February mom pays for the care already provided during January, being provided in February, and to be provided in March, the amount of payment for March will be a gift because it is an advance payment.

These regulations mean that oral agreements to pay for care absolutely are no good and home-made personal care agreements probably won’t meet all of the new Medicaid requirements. If you want to set up a pay for care arrangement with a family member or friend, the Personal Care Contract will have to be written correctly. You’ll probably need the help of an Elder Law Attorney to write the contract.

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Gerald W. Townsend is an Elder Law Attorney in Parkersburg, focusing on the legal needs of seniors in West Virginia, with special emphasis upon Medicaid planning to protect assets from nursing home care costs. He can be reached at jtownsend@fntlawoffices.com.