A Caregiver Agreement is a legal contract between an individual who needs various support services and the party who is to provide them. The caregiver can be a son, daughter or other family member, a friend, a geriatric care manager or a home care agency.
Caregiver Agreements offer a number of advantages and can play an important role in effective planning. First, they’re an excellent way to keep your assets working for you, and helping to reduce or eliminate the Medicaid penalties already discussed.
Second, they offer a way for a Medicaid recipient to receive additional care that wouldn’t be covered by Medicaid, and that is outside the scope of what home care attendants or a nursing facility can provide.
And third, they provide a way for a parent to give financial assistance to children or family members who are providing care, and need to supplement their income, without feeling as if they’re taking a handout. In this instance, Caregiver Agreements help to preserve personal dignity on both sides of the contract. Further, it helps avoid resentment and guilt where one sibling is providing the care, and other siblings can’t or don’t want to help out.
The arrangement works as follows: the patient pays the caregiver in advance for services to improve the patient’s well-being and quality of life. These are the keys to creating an agreement that will be accepted by Medicaid:
- The contract must specifically define the services provided and hours to be worked by the caregiver
- The lump sum payment must be calculated using a reasonable life expectancy and legitimate market rates for the services
- A daily log of actual services rendered and hours worked must be maintained, along with written invoices
- Upon the death of the patient, any unearned amounts must be paid to Medicaid to reimburse it for the services that it provided to the patient
As an example of how these arrangements actually work, Lamson & Cutner drafted a Caregiver Agreement for a client who resided in a nursing home, and needed extra care and companionship beyond what the facility could provide. Her niece was willing to supply the services, and the firm drafted a Medicaid-compliant contract that allowed her to be compensated with an up-front payment. The happy result was that our client got the extra care she needed, her niece benefited from the additional income, and the family gained peace of mind.
For an article on Caregiver Agreements written by David Cutner, Click Here.