In a shocking case decided by the Michigan Court of Appeals in February, the Court imposed a Medicaid penalty on a Michigan senior for paying an unrelated home health aid to help her stay in her home and out of a nursing home. The case is Jensen v Department of Human Services. It has not been appealed. The sweeping language of the case could affect every home health agency and every senior that pays a person or company to come into their home for assistance with their daily activities.
The case revolves around Betty Jensen, an elderly woman with dementia. Betty and her family wanted her to stay in her home near Muskegon. Between May 2011 and March 21, 2012, Betty paid a non-related caregiver $19,000 to help her stay in her home. When it became impossible to stay in her home, Betty moved into a nursing home. After her finances were nearly exhausted, Betty applied for Medicaid to help pay the nursing home. The local Department of Human Service (DHS) penalized Betty because of the $19,000 she paid to her home health aid. DHS claimed that Betty would have needed to meet stringent requirements of a family care contract in order to pay the home health aid without penalty. Betty was denied Medicaid for months as a result.
Betty’s local attorney appealed that decision to the local Circuit Court. The Circuit Court Judge ruled that the burdensome requirements of a care contract (which would require notarized signatures from Betty and the caregiver, a signature from Betty’s Doctor supporting the specific homecare, as well as several other highly technical requirements) only applied to paying a relative. The purpose of this difficult Medicaid rule was to prevent fraud in paying family members for services that they did not actually perform. In Betty’s case, there was no dispute that the caregiver was unrelated, performed the caregiver services and that Betty needed the help.
It is bad enough that DHS attempted to penalize Betty for trying to stay in her home. What is worse is what happened next. The Attorney General of the State of Michigan decided to appeal the local Judge’s decision. The State of Michigan went out of its way to argue that any payment to a home health aid (including home health companies) should be penalized if the Michigan senior needs Medicaid within five (5) years, unless onerous regulations are followed in documenting the transaction. Unfortunately, the three judge panel of the Court of Appeals unanimously agreed with DHS and the Attorney General. The only good thing about the case is that it is unpublished (that means, in theory, it does not have precedential value). However, the bigger problem is that the State of Michigan has pronounced its position and is willing to go to great lengths to defend it (appeal a case to the Court of Appeals).
If you are a home health company, you may be tempted to think that this case does not apply to you. After all, you use written contracts. Written contracts are not enough under this rule. The signature of the patient or their representative must be notarized. The signature of the caregiver must be notarized. The services must be recommended in writing and signed by the client’s physician as necessary to prevent the transfer of the client to a residential care or nursing facility. Under that last rule, any services which are not “necessary to prevent the transfer of the client to a residential care or nursing facility” could be penalized. These are just some of the requirements to avoid a penalty. I would be surprised if ANY home health company is routinely meeting all of the requirements of this policy.
This all begs the question… Why on Earth would the DHS or the Attorney General want this result? Shouldn’t the goal be to keep Michigan residents out of nursing homes and off Medicaid? One of the primary methods of staying out of the nursing home and off Medicaid is to hire health aids at home or in independent living environments. The Court of Appeals actually stated the senior “must prove” that he or she “did not fritter away his or her money,” paying for home care. With this rule, it seems the State is encouraging low-income seniors to go immediately to the nursing home when they need care, rather than to stay home as long as possible. The specificity of the rule would make it difficult for any senior to comply without the help and cost of a lawyer.
With DHS and the Attorney General taking this position, it seems that the best hope to overturn this rule will be through the Michigan Legislature. The State Bar of Michigan Elder Law and Disability Rights Section along with several other groups supporting seniors are lobbying the legislature to pass a law overturning the Court’s decision and the policy of DHS and the Attorney General. If you agree that this needs to be addressed, please consider contacting your representative on this issue. Contact my office if you need further supporting documentation or assistance on this issue.
Bob Mannor, is a Certified Elder Law Attorney assisting clients throughout Southeastern and Mid-Michigan. Bob is on the Council (Board of Directors) for the State Bar of Michigan Elder Law and Disability Rights Section and a contributor to the Institute for Continuing Legal Education in Michigan.