State Regulations Apply Medicaid Penalty Period To Caregiver Payments.

The plaintiff lived in her home unassisted until May of 2011, at which time a non-relative caregiver was hired to provide in-home care.  The hiring was done on an informal basis with no written contract.  Over the next 10 months, the plaintiff paid the caregiver approximately $19,000 via the liquidation and conversion to cash of some of the plaintiff's assets.  At the end of the 10-month period, the plaintiff entered a nursing home.  The plaintiff subsequently executed a written contract with a grandson to reimburse him $1,400 for mileage he incurred while managing the plaintiff's affairs.  Upon applying for Medicaid, the state (MI) Medicaid agency determined that the payments to the caregiver (among other transfers) were "divestments" resulting in a disqualification of Medicaid benefits for almost three months.  The plaintiff died before becoming eligible for Medicaid.  An administrative law judge upheld the agency's determination, but the trial court reversed on the basis that the regulation at issue only applied to up-front payments for services where an assessment of fair market value was not possible and because the care-giver was a non-relative.  On further review, the court reversed the trial court because the payments were not made pursuant to a written contract and were made without a doctor's recommendation as required by the regulation in order for the payment to not constitute a "divestment." Jensen v. Department of Human Services, No. 31908, 2015 Mich. App. LEXIS 315 (Mich. Ct. App. Feb. 19, 2015).