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Elder Law Attorneys in Pittsburgh, Pennsylvania

Family Care-Giver Agreements

It is becoming more and more common, and encouraged, for those who are in increasing need of medical services, to stay at home and receive the needed care in-home. It seems that this has become more acceptable since the cost of carrying for persons is not just financial but also is favored because of the limited supply of facilities; in particular part because of the additional demand stemming from COVID and thereafter.

Pennsylvania passed and instituted FAMILY CAREGIVER SUPPORT ACT of Dec. 19, 1990, P.L. 1234, No. 204.  In Pennsylvania and for Medicaid purposes, when a close family member, such a child or sibling, provides in-home care for a person who needs or may in the future need skilled nursing level of care, such as provided in a nursing home, the state presumes that care is provided out of love and affection, and the state will not recognize payments made to that care-giver for such care. When a person who is applying for Medicaid to pay for skilled nursing level of care, however, there is an exception.  If the caregiver and the care receiver have an appropriate written caregiver agreement, the state will approve payments under that agreement. 

Caregiver agreements need to meet certain criteria to pass muster for Medicaid. They must be drafted the same as contracts for care between professional caregivers and care receivers. The agreements need to give objective measure to establish that the relationship exists beyond the family-based relationship.

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Caregiver agreement needs to spell out the duties and responsibilities in a way which Medicaid will approve. They should, in detail, spell out the services provided; that is that there needs to be a considering of ancillary issues that may relate to room and board if the care receiver is living in the care-giver’s home, and specific services to be provided by the caregiver, such as facilitating the need for meals, specific chores, and other tasks provided.

The agreement should also set out the time spent on each such service, and determine a value for, or an hourly rate at which, those services are provided, which cannot be any more than the rate that professional third party providers or agencies would charge for the same or similar services. Thus, it is suggested and somewhat important that such agreements are prepared by an attorney who is familiar with the requirements for Medicaid eligibility.

The nature of the payment can be structured over time, or, is even possible to have a Medicaid-compliant caregiver agreement if the care receiver is giving a lump sum, and not a monthly payment, to the caregiver. For example, when a parent gives a child a cash payment to add an addition onto the child’s house for the care receiver to live in, commonly known as “in-law quarters”.

Yet, these types of payments are subject to strict levels of scrutiny. Therefore, caregiver agreement need to be carefully drafted to avoid having all or some of the payment disallowed by Medicaid. The importance of properly drafted caregiver agreements cannot be overstated. If you are considering the need to provide care to someone in need of some level of care, you should consult with an attorney who is quite familiar with the requirements for Medicaid eligibility as early as possible to discuss the appropriateness of a caregiver agreement.