Personal Services Contract for Medicaid in Colorado

THE LAW OFFICE OF
PAUL MITCHELL
A LIMITED LIABILITY COMPANY

Personal Services Contract for Medicaid in Colorado

A person who ultimately applies for Medicaid in Colorado may sign a personal services contract with another person, usually a son or daughter, to assist them with their activities of daily living and other services. The services can include monitoring the health status of the applicant, securing their healthcare by hiring professionals, taking the person to doctor appointments. The caretaker may also assist the applicant in making sure that they are visited periodically by family members, that they attend social events and entertainment events, that the caretaker transports them for shopping trips and to buy groceries and supplies, assists them with their financial affairs by managing their check books, by being a spokesperson with doctors and bankers, etc.

The Colorado Code of Regulations provides a number of criteria that must be met before it will honor a personal services contract. As may be evident after this discussion, some of the criteria are so difficult to meet that the usefulness of a personal services contract is limited.

Generally, the Department of Human Services presumes that the services provided by a child for a parent, for instance, are done for love and affection. The child, in this instance, must meet strict requirements in order for payment to be acknowledged for services. If they do not, then the Department will treat the payments as gifts which result in penalties.

Additionally, Colorado will not acknowledge a lump sum transfer for services. If a contract was signed and a lump sum was paid to the caregiver, the Department continues to treat the amount transferred as a countable resource of the applicant. Consequently, if this amount is more than $2,000 for a single person, the applicant could not qualify for Medicaid.

For contracts starting on or after March 1 of 2007, the following requirements must be met:

1. The contract must be in writing.
   
   
2. The contact must be signed before services are provided.
   
   
3. The contract must be signed either by the applicant themselves or the applicant's legal representative such as an agent, conservator, guardian, etc.
   
   
4. An agent, guardian, or conservator, or other legal representative may not be a beneficiary of the contract, the person who receives the payments.
   
   
5. The contract must be dated.
   
   
6. The signature must be notarized.
   
   
7. The compensation of the person providing the services must be comparable to persons who provide services of the same kind in the market place.
   
   
8. The agreement must describe
   
   
   1. The type of services,
      
      
   2. How often they will be provided, and
      
      
   3. How much time will be spent on the tasks.
      
      
9. The contract must provide that payments be made at least monthly, if not more frequently.
   
   
10. The provider must keep a log or record of the services provided to furnish documentation that can be reviewed later by the Department.
    
    
11. Services cannot duplicate services for which another party is responsible.
    

Planning is difficult if the caregiver is also the agent named in a durable power of attorney or is acting as a guardian, conservator or a trustee. In these cases, the Department will not honor the contract because those persons cannot be beneficiaries of the contract. The caregiver should consult with an elder law attorney to see if alternatives exist to avoid this result.