Does Medicaid honor back-pay for personal care agreements?

Now is the time for you to talk with an elder law attorney in your state. Think for a moment about how the Medicaid system in your state would be affected if retroactive claims were allowed from any family member who wanted back pay for past services. The system would be swamped with people claiming that the state should pay for current care services, and leave the family with assets owned by the elder.

Caregiver Contracts for family members are valid, but the agreements must be in writing, and the compensation to the caregiver must be for fair market value. If the elder later decides to apply for Medicaid, the state Medicaid agency will be asking for documentation of what was paid for.

In my state (Massachusetts) the Appeals Court decided a case in 2007 where a daughter put hundreds of hours of work into caregiving and repairing her Mother's house. The daughter claimed back pay when the house was sold, but Medicaid refused the Mother's application when she was admitted to a nursing home several years later.

The Appeals Court agreed with the Medicaid denial and took a page from HCFA Transmittal No. 64 to explain how "a transfer to a relative for care provided for free in the past is a transfer of assets for less than fair market value. However, an individual can rebut this presumption with tangible evidence that is acceptable to the State. For example, you may require that a payback arrangement had been agreed to in writing at the time services were provided." That language goes back many years.

Today, even a written agreement for retroactive payment would probably be unacceptable. Current payment for services as they are provided, under an agreement in writing, is the way to document that services are being provided at fair market value.

Your concern about the record title to your Mother's house is also important, since there are other parties who have an interest in how the real estate is owned: the mortgage company and the person who is required to pay the mortgage. A change in the home ownership would disrupt those arrangements.

An elder law attorney in your state can help you satisfy the requirements of the parties involved, including your state Medicaid agency.

The 2007 case can be accessed at the trial court law library here: http://masscases.com/cases/app/68/68massappct228.html

Your quitclaim won't work, sorry, the house will come with a lien for both the mortgage and MERP. Please go see an attorney. You have no idea how the estate process works.

I am not a realtor nor a lawyer but I did take the real estate class and did sleep in a Holiday Inn Express last night...

I was taught that for a quit claim deed to be valid, it must be recorded prior to the owner's death. Upon death, the deed becomes invalid if not recorded.

Now, if she owns the house, she could deed it to you with her having a life estate - which basically means that you own the house but she retains the right to occupy it until her death or voluntary vacating it.

Father'sDaughter - Your mom does not own the home so a QCD at this point in time does not matter. Only when & if the mortgage is fully paid and the mortgage holder issues a cancellation of the deed and it is properly done & filed at courthouse would the property be owned. Mom would need to continue to pay all taxes on the house as well otherwise it will be placed for tax sale. Please please keep in mind that QCD are not a Warranty Deed so there is no guarantee of ownership. Only a Warranty Deed does that and due to this often QCD pose all sorts of problems later on.

? for you…why is dad paying the note? Is the property still in joint names, so he is liable for payment? (and he is still an owner); OR was it awarded to her by divorce decree and he has to pay the mortgage also by divorce decree?(if so, you need to review the decree as it could revert to him if she predeceases him)….OR is he doing this because he wants to and has no legal requirement to do so?(so he could in theory stop paying the mortgage manana if he needed to). Personally I'd be more about finding out exactly what the mortgage situation is & just how mom can manage to pay all the other costs on the home from now till whenever before even thinking about what happens with the house when your currently 58 yr old mom dies.

About Medicaid and MERP (estate recovery), every day that your mom gets services paid for by Medicaid, it is building up a tally that Medicaid expects to be repaid by any assets mom has upon her death & is required to have an attempt at recovery done by the state. I don't think a QCD can be done after death, i'd bet that in order to transfer a property owned by the deceased the there will need to be some sort of probate process…like probate, small estate affidavit or perhaps a muniment of title. If she dies fully owning that home, then the home becomes an asset of her estate. If she died and left a valid will, then whomever is named executor can get a probate atty. & open probate. If you are owed $ from her estate then you have to submit a claim against the estate via the probate system for her state. BTW the state can also place a claim against her estate as well.

Regarding the "personal care agreement", those are usually done for caregiving services provided by family for actual care done. And probably in real time not some future whenever period of time. And they need to be correctly done with taxes filed and paid. Paying for upkeep on the house would probably be best done via some sort of promissory note between you & her imho, its not personal care agreement.

None of any of this are DIY projects. Mom needs an atty to set whatever up.

Any expenses of hers you have paid for may be able to come out of her estate after she passes, if she has anything left. Keep good records. You would file against the estate just like any other creditor, like a credit card company, or whoever does her yard work. You would be at the end of the line, however.

Yes, I understand Quit Claim the way Mom2Mom described it. So if you live with her and care for her until her death (and she has given you a prior Quit Claim, the house would be yours upon her death. However, there are some questions about the ex-husband paying the mortgage, and from what your statement was about your Mom not having to count the house as "income." Do you mean she doesn't have to count the house as an asset? If that's the case, does the ex-hub in fact OWN the house. If so, there's no way the house can be legally Quit Claimed to you. :( Ownership would revert to him.

I can't really help you with your question, BUT-----why on earth is she living alone if she can't afford it? And why does she have no income if she was married?

In my opinion, it is a very stupid decision to keep a house in her name & forfeit any assistance she would eligible for if she did not own the house. Rather than worrying about whether or not your claims for paying her bills would be honored by Medicaid after she died & paid out of the proceeds of the sale of the house, I would find out what the agreement is between your mother & her ex-husband and the mortgage/house. Why is he paying the mortgage in the first place? Whose name(s) is on the deed to the house? Whose name(s) is on the mortgage?

It's pretty dumb to have her living by herself in a house where the mortgage is being paid by her ex-husband, you are paying the utilities & she has no income. She could move in with you or you with her, so you wouldn't be paying double utilities, food, etc. Does she have a car? Who pays the payments/insurance/maintenance on the car?

And, not for nothing, but at 58 years old, you mother can still work. There is no excuse for someone who is still able to work for not working & instead having no income & having her daughter pay for all her expenses. Sorry, that's just my opinion.

Go with what pamstegma said. She's a reliable source.