Fleming & Curti, P.L.C. - Personal Care Contract Is Valid Expense for Medicaid Eligibility

JULY 17, 2006 VOLUME 14, NUMBER 3

Personal Care Contract Is Valid Expense for Medicaid Eligibility

Like so many other children of aging parents, Sandra Teson faced the decision to place her mother in a nursing home with great trepidation. The Missouri woman realized that she could not provide the care needed to keep her mother at home, and that neither of them could afford the full-time help that would be required. The decision was difficult, but the Blanchette Place Care Center seemed like the best available choice. Fortunately, Ms. Teson’s mother had a little bit of money saved up and could pay privately for her care—for a while.

When the money was almost gone, Ms. Teson faced the likelihood that she would have to apply for Medicaid assistance with the nursing home costs. Once the money ran completely out, and Medicaid stepped in, who would see to it that Ms. Teson’s mother was properly fed? She had lost 12 pounds after she suffered a stroke and had difficulty eating the facility’s food, and she required more assistance than Blanchette Place could provide. Who would monitor her medications, to make sure she was receiving the proper ones and being billed only for what she did receive? Who would cajole her into participating in Blanchette Place’s various social activities? She invariable enjoyed them, but just wouldn’t respond to the staff’s encouragement.

Obviously, Ms. Teson could fill all those roles, and more. But she had a job, and a family, and lived an hour away from the facility. She thought it made sense to ensure that she would be able to perform those services for the rest of her mother’s life, and so she entered into a "Personal Care Contract" with her mother. Since she was the guardian of her mother’s estate (what we would call a conservator in Arizona), she submitted the agreement to the court for approval, and the judge saw its value.

Under the agreement, Ms. Teson received her mother’s last $11,000 in return for her promise to provide the care management for life. That made her mother immediately eligible to receive Medicaid assistance with the nursing home’s costs—except that the Missouri Medicaid agency denied her coverage, arguing that the $11,000 payment was really a gift, that Ms. Teson’s mother had not received anything of value, and that the facility itself provided all the care she needed.

The Missouri Court of Appeals disagreed, and ordered Medicaid to pick up the nursing home expenses. The appellate court noted some of the myriad tasks Ms. Teson had already handled for her mother, and noted that her life expectancy was more than 11 years, so that the contract payment represented something like $1,000 per year for Ms. Teson's future work. Did Ms. Teson’s agreement benefit her mother? Yes, ruled the court, finding that it helped "support [her] independence, autonomy well-being and care in ways that the facility’s services do not. … the services provided by Teson … constitute valuable consideration for the $11,000 payment…." Because of that, the Missouri Medicaid program was wrong to treat the payment as if it had been a gift. Reed v. Missouri Department of Social Services, June 20, 2006.

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