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A caregiver agreement with a lump sum advance payment can be an effective way of supplementing care in a nursing home while, at the same time, reducing a Medicaid penalty or spend down. Under such an agreement, the patient pays in advance for caregiver services that the nursing home does not provide, which improves the patient’s well being and quality of life. The caregiver can be an independent individual, an agency, or a family member.
The keys to creating a caregiver agreement that will be accepted by Medicaid are: (a) specifically define the services and hours to be provided by the caregiver, (b) calculate the lump sum payment using a reasonable life expectancy and market rates for the services involved, (c) discount the lump sum payment to present market value using a reasonable rate of interest, and (d) require the caregiver to keep a daily log and submit a detailed written invoice of the services and hours actually provided.
In one of our cases, our client was in a nursing home and needed extra care and companionship beyond what a nursing home can provide. Her daughter was willing to provide these services, so we prepared a caregiver agreement that allowed her daughter to be compensated with an up-front payment. The arrangement got the mother the extra services that she needed, and benefited the family as well.
In another case, our client was in a nursing home and needed assistance with feeding and other activities of daily living (ADL’s) to a much greater extent than is normally available in a nursing home. We prepared a caregiver agreement between our client and an agency, under which the agency provided the needed services. The individualized attention given to this client made all the difference in his quality of life. The agency’s fee was fixed in advance and paid as a lump sum, which facilitated the client’s Medicaid eligibility.