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  >  Uncategorized   >  N.J. Court Gives Guidance on Hiring Aides – Part 3

N.J. Court Gives Guidance on Hiring Aides – Part 3

In my 3rd and final post on a recent New Jersey Appellate Division case, I continue to discuss how Medicaid treats payments to aides when it comes time to file a Medicaid application.  In order to keep the costs down, D.Z. hired aides for several years but did not go thru a home health care agency.  As I have often advised clients and prospects, the way in which you hire and pay these aides can be problematic because of Medicaid’s 5 year look back period. 

The Appellate Division upheld the State’s decision to impose a substantial penalty because of the more than $200,000 in payments made to various aides that lacked sufficient documentation.  As I wrote last week, the case can provide a roadmap of “dos” and “don’ts” for future Medicaid applicants.

The Appellate court noted the lack of a written agreement memorializing the scope of the work or the rate of pay or whether the aides were licensed, although Medicaid regulations do not require written contracts or licensed aides.  It’s just that without a document, it was more difficult for the State to answer these questions.  The evidence just wasn’t there.  D.Z.’s son tried unsuccessfully to obtain the aide’s testimony.  This is not surprising.  As we always tell families, it is easier to get cooperation when the aides are still employed by you, than when they have moved on to another job. That certainly appears to have been D.Z.’s experience.

The court also picked up on the exact concerns that we always have when filing a Medicaid application for a client who paid the aides cash, or check to cash or payable to the aide but with no documentation as to what services were to be provided or the rate of pay.  The State was not willing to accept D.Z.’s answers to these questions – even when presented under oath at a court hearing.

There were too many inconsistencies in the terms of payment and no clear evidence as to what the checks to the aides were for.  Part of this problem was created by adding additional amounts to checks for various reimbursements.  The burden is always on the applicant to provide clear documentation.  It’s not on the State.  If you don’t meet that burden be prepared for a lengthy penalty period.

To summarize, the D.Z. case confirms a few things I have been saying for years.  First of all, hiring a licensed health care agency easily could have solved D.Z.’s problem.  You pay the agency who supplies the aides.  The agency agreement and invoices are proof to Medicaid.  Case closed.

And if you decide to hire aides directly without going thru an agency?  You’ve got to keep very detailed records starting with an agreement that establishes the scope of work and terms of pay.  Be prepared to prove that the rate is reasonable and don’t expect you’ll be able to walk into the Medicaid office and tell them what you did.  

For example, write separate checks for reimbursements and don’t lump those in with the payment for services.  It’s easier for Medicaid to verify that way.  As we can see in the D.Z. case, the State scrutinizes everything.  It focused on payments made to one aide when in fact another was working during that time period.  The State is looking for inconsistencies – any way that it can send you away with a lengthy penalty period. In short, the best way to prepare is to know the Medicaid rules before you hire an aide years before you anticipate you’ll need to apply for benefits or work with an elder law attorney who is well versed in the ins and outs of Medicaid and who can advise you before you make the mistakes that D.Z. and her son made