Florida Medicaid personal services contracts under scrutiny

Personal services contracts are being scrutinized in the Florida Legislature. Under the proposed legislation, Florida House Bill 1323 and Florida Senate Bill 1748, these contracts may have to meet far more stringent guidelines, or could even be eliminated entirely as a transfer of assets for Medicaid eligibility purposes.

Currently, a personal services contract provides compensation to a caregiver in return for his/her providing various personal services to a disabled relative. Most often, it is a contract between an adult child and disabled parent. The caregiver need not be licensed or trained as a health care provider; he just must perform services that are required as a result of the parent's physical or cognitive incapacity. The parent could be at home, or in a nursing home. Caregiver services may include but are not limited to: handling personal finances; serving as a liaison among the nursing staff, doctors and patient if the parent is residing in a nursing home; providing the patient with transportation to and from doctor's visits; or taking care of the person's day-to-day needs at home.

Currently, the law permits the parent (or the parent's agent) to give the caregiver a lump sum of money in advance, based on the parent's life expectancy. The contract must be properly and carefully drafted, very specific, and Florida Medicaid's legal department must approve it if and when the individual applies for Medicaid long-term care benefits.

Obviously, compensation is essential for a caregiver who might otherwise not be able to take time off work, or even quit work, to care for an aging parent. The compensation is for services rendered or to be rendered, and the recipient must declare it as income on his/her tax returns. Clearly, being able to be compensated can make the difference between an aging parent residing at home or having to live in an institution.

The sponsoring legislators, Republican Senator Greg Evers and Republican Representative Janet Nunez, contend that the rules for personal services contracts are too lax and too generous. They argue that the contracts permit the transfer of money to adult children so that parent can deplete assets and therefore receive Medicaid benefits for long-term care. Among the proposed provisions of the new laws is: requiring the amount and scheduling of services to be spelled out in advance, rather than on an as-needed basis; limiting payments to caregivers to minimum wage; eliminating services that duplicate those of other providers; and requiring a definite commitment to a number of hours on a monthly basis, not on an as-needed basis, as the current law allows. Then there is also the possibility that personal services contracts may be eliminated entirely.

To my mind, this is throwing the baby out with the bathwater. Some of the proposed changes are simply unrealistic. For example, what caregiver can accurately predict when an aging parent is going to have a health crisis, or how many hours of hospital waiting rooms and doctors' visits it will entail? Moreover, personal service contracts seem a natural component of Florida's plan to move more nursing home residents back to the community, or more importantly, prevent them from having to go into a nursing home to begin with. Allowing family members who are willing to care for the elderly to be compensated furthers the state's goal. Without personal services contracts, or with contracts that are too restrictive, more elderly people will end up needlessly institutionalized.

I will keep you posted on the status of these bills as they make their way through the legislature. You can read the Florida Senate bill here and the House version here.  Read more about Medicaid benefits for long-term care.