Medicaid bookkeeping question

BassetHoundAnn

About a year ago, when I took over the care of my mom, I consulted with a CELA who is very respected among ALZ families in our area. He looked over my mom's finances, assured us we had everything properly organized, and said she had at least 3 years' of care expenses. 

I was skeptical. Maybe 3 years of AL but not 3 years of memory care or skilled nursing. 

My question is: when Medicaid does a look-back what kind of bookkeeping do they want? Every month I have hundreds of dollars in extra expenses for my mom on top of her AL fees. Doctor co-pays, dental, extra food, endless Amazon orders of underwear, slacks, pj's, etc. (Mom tends to toss clothes in the trash.) Not to forget the cash for mom to spend at the AL beauty parlor <g>. 

Most things I put on my credit card and later take reimbursement from her account. I closed all her credit cards and put freezes on her credit a few years ago when it was clear she couldn't manage her finances any longer and was taking out lots of cards. 

I also spent several thousand from her account to move her to my city and pay a company to clean out her house so we could put it on the market. 

And then we had to pay several thousand to repair the house to bring it up to code in order to sell it. 

Will Medicaid look at these withdrawals in a few years time when her money runs out and say 'Hold on, what are these withdrawals about? Was the family raiding her account?' 

What kind of bookkeeping do they want?  I have been saving receipts but will that be sufficient? 

PickledCondiment

No disrespect to CELA, these are truly accounting (not legal) issues, consider consulting a CPA.  You might want to ask about the guidelines for taking your costs as deductions on your personal tax return, etc.  More questions will provide more information for your decision making process. 

Also consider asking Medicaid, doesn't hurt to ask, you'll be getting another perspective.  You'll also then know what they require should they start asking questions. 

Jo C.

I have dealt with this with two different applications for Long Term Care benefits and it is rather simple.  First and foremost, it is important not to co-mingle your money with hers.  It is crucial to keep both separate.

Medi-Cal (California), upon application, asked for three months worth of banking statements for all accounts which the banks and investment firms suppled very quickly.  I had good files and kept every receipt for everything regarding my Loved One (LO).  I had to provide copies of proof of income both social security and pension; I had to provide copies of all insurance policies including the burial policy; I needed to provide an assessment of the value of my LOs home (homes are not counted as an asset, but they still wanted that); if I recall correctly, I think I also had to provide a copy of the prior year's tax form 1040; but my LO did not have to file taxes due to age and low income; so I simply documented that; there were many document requirements:

Applying for Medicaid is easy and does not require an attorney to do it.  The only hard part of application is coming up with the documentation required including proof of citizenship, military discharge papers; marriage license as well as divorce decree of a prior marriage; and more.  Also needed a photo ID. 

Most states will have application forms for Long Term Medicaid online; one can then see just what is required. NOTE:  Be SURE that you are asking for the form for "Long Term Care Medicaid," which is different from regular Medicaid insurance.  I got two Medi-Cal application forms.  I filled out one as a practice "dummy" which I later discarded; if I made an error, no big deal.  I then had a final form I filled out.  In many states, one can now apply online, but I wanted something concrete.   I had all documents required - it took me a few weeks to get that all together as far as the different licenses, military papers, etc.

Begin paper gathering early even before need; it will save you so much time and make things quite simple.  Also, I think it is extremely important to only use a credit card that is only for the LOs needs.  This way, it is simple should you ever be questioned. I kept one credit card in my LOs name and used it for any and all needs.  If I had not had this, I would have kept a card of mine restricted only for my LOs needs.  Of course, never, ever, ever mingle your bank accounts, etc. with your LOs; that is a recipe for disaster should you be questioned.

I kept a file box with different titled folders for receipts and I kept absolutely every single rcceipt no matter how small the purchase. If I had ever been audited or questioned, it was all there at my fingertips.

Omigosh; this is really over the top, but I wanted to have our application be so easy, that I actually used peel off small round stickers at the bottom of each page of the application and requested documents; I used them to number the pages and I also created a Table Of Contents for the application with page numbers for the items.  GROAN!!!!  I can hear everyone yelling now; but it was easy. I got two calls from the Medi-Cal Field Office;; one from our assigned Med-Cal Caseworker for our application as well as from her supervisor thanking me and saying they had never had such an application before, but that it made their processing of our account very simple.  We got approved in a very short period of time; don't know if that had anything to do with it, but it sure kept things in order and the caseworker could not miss anything.   You do NOT have to do this; just my whim as I had two LOs with dementia living at home and was also working at the time - kind of like tap dancing while juggling watermelons while whistling, "The Flight Of The Bumblebee."

Most important is when you have filled out your application and have all your documents; be SURE you go through one last time and check that all questions have been answered; that you did not leave anything blank and that all supportive documents are present.  I did not do online, so I had our application packet sent return receipt requested to ensure I knew they had the application and could not say they did not get it.

Sounds like it would be easier to pay the money and have an attorney apply; but you still have to provide the paperwork, and also, some of the Members who have had that done have had their application not completely filled out by the law office clerk and that slowed down the process; if the application is not filled out properly, one gets it back to get it done.

It really is easy; you have time to check out the application form and find out which documents your state requires, so you will be ahead of the game.

Wishing you best of luck,

J.

BassetHoundAnn

PickledCondiment wrote:

No disrespect to CELA, these are truly accounting (not legal) issues, consider consulting a CPA.  You might want to ask about the guidelines for taking your costs as deductions on your personal tax return, etc.  More questions will provide more information for your decision making process. 

Also consider asking Medicaid, doesn't hurt to ask, you'll be getting another perspective.  You'll also then know what they require should they start asking questions. 

Thanks Pickled! Excellent ideas. I will query the CPA we used to straighten out my mom's taxes, and also contact the state Medicaid dept. to see what sort of documentation they may require down the road. I looked at the application online and it says they do a 5-year lookback. Will they want 5-years' worth of bank statements? Egads. That's certainly something to prepare for. Thanks again! 

BassetHoundAnn

Jo C. wrote:

I have dealt with this with two different applications for Long Term Care benefits and it is rather simple.  First and foremost, it is important not to co-mingle your money with hers.  It is crucial to keep both separate.

Medi-Cal (California), upon application, asked for three months worth of banking statements for all accounts which the banks and investment firms suppled very quickly.  I had good files and kept every receipt for everything regarding my Loved One (LO).  I had to provide copies of proof of income both social security and pension; I had to provide copies of all insurance policies including the burial policy; I needed to provide an assessment of the value of my LOs home (homes are not counted as an asset, but they still wanted that); if I recall correctly, I think I also had to provide a copy of the prior year's tax form 1040; but my LO did not have to file taxes due to age and low income; so I simply documented that; there were many document requirements:

Applying for Medicaid is easy and does not require an attorney to do it.  The only hard part of application is coming up with the documentation required including proof of citizenship, military discharge papers; marriage license as well as divorce decree of a prior marriage; and more.  Also needed a photo ID. 

Most states will have application forms for Long Term Medicaid online; one can then see just what is required. NOTE:  Be SURE that you are asking for the form for "Long Term Care Medicaid," which is different from regular Medicaid insurance.  I got two Medi-Cal application forms.  I filled out one as a practice "dummy" which I later discarded; if I made an error, no big deal.  I then had a final form I filled out.  In many states, one can now apply online, but I wanted something concrete.   I had all documents required - it took me a few weeks to get that all together as far as the different licenses, military papers, etc.

Begin paper gathering early even before need; it will save you so much time and make things quite simple.  Also, I think it is extremely important to only use a credit card that is only for the LOs needs.  This way, it is simple should you ever be questioned. I kept one credit card in my LOs name and used it for any and all needs.  If I had not had this, I would have kept a card of mine restricted only for my LOs needs.  Of course, never, ever, ever mingle your bank accounts, etc. with your LOs; that is a recipe for disaster should you be questioned.

I kept a file box with different titled folders for receipts and I kept absolutely every single rcceipt no matter how small the purchase. If I had ever been audited or questioned, it was all there at my fingertips.

Omigosh; this is really over the top, but I wanted to have our application be so easy, that I actually used peel off small round stickers at the bottom of each page of the application and requested documents; I used them to number the pages and I also created a Table Of Contents for the application with page numbers for the items.  GROAN!!!!  I can hear everyone yelling now; but it was easy. I got two calls from the Medi-Cal Field Office;; one from our assigned Med-Cal Caseworker for our application as well as from her supervisor thanking me and saying they had never had such an application before, but that it made their processing of our account very simple.  We got approved in a very short period of time; don't know if that had anything to do with it, but it sure kept things in order and the caseworker could not miss anything.   You do NOT have to do this; just my whim as I had two LOs with dementia living at home and was also working at the time - kind of like tap dancing while juggling watermelons while whistling, "The Flight Of The Bumblebee."

Most important is when you have filled out your application and have all your documents; be SURE you go through one last time and check that all questions have been answered; that you did not leave anything blank and that all supportive documents are present.  I did not do online, so I had our application packet sent return receipt requested to ensure I knew they had the application and could not say they did not get it.

Sounds like it would be easier to pay the money and have an attorney apply; but you still have to provide the paperwork, and also, some of the Members who have had that done have had their application not completely filled out by the law office clerk and that slowed down the process; if the application is not filled out properly, one gets it back to get it done.

It really is easy; you have time to check out the application form and find out which documents your state requires, so you will be ahead of the game.

Wishing you best of luck,

J.

Wow, JoC! Thank you so very, very much for all the great tips and advice! 

You had two LOs with dementia at home plus you were working full time! I am SO IMPRESSED! I can't even imagine handling that. 

It's a sign of what a hell this past year has been that I've been so careless with keeping track of expenses. In years past I was always the spreadsheet cowboy who kept everything meticulously documented for taxes, our home and small business. This year I've just been stuffing receipts into manila folders and bags. I shudder at the prospect of having to pull together a coherent accounting. 

I checked out the Medicaid long-term-care application form online today. It left me with more questions than answers so I'll give the state Medicaid office a call. The form says there's a 5-year lookback. Does that mean they'll want to see 5-years of bank statements? 

I consolidated all of mom's money, including that from the sale of her house, into one bank with the accounts listing me as POA, per the CELA's advice. To make things simpler down the road. Prior to that she was going to a half-dozen banks. Will Medicaid want to see all those bank statements? 

I know it would be wise to get a debit card to pay for her expenses, but I cringe at the prospect of the hassle of removing the freezes from her credit reports. 

The amount of paperwork involved in taking care of mom has just been overwhelming. About a month ago someone tried to hack into her medical records. Medical records of the elderly command $1000-$2000 each on the blackmarket. Can you imagine? So her medical record was locked and it took me many phone calls and a month of filing multiple forms with the IT dept. of the local hospital to get proxy access to the test results from her recent ER visit. Having an activated medical power of attorney made no different to the IT dept. <sigh> 

I love the stickers idea! I'm going to do that! Thank you, JoC!!

I

star26

Warning: Receipts fade, some of them quite quickly. I learned that the hard way when I had to go back into some of my own manila envelopes just from the last 12-24 mos. Yes, you need to be prepared to present bank statements for the entire look back period. You will also need to account for all assets sold and nothing should have been sold for less than fair market value. 

Her bank account likely automatically comes with an ATM card which you can use as a debit card for everything without needing to open a new credit account. I agree with Jo C that it’s better to have 1 dedicated credit/debit card, preferably in her name, for all her expenses and nothing else. It’s easier for you too. And then her bank statements will automatically list all the expenditures (Target, Amazon, Pharmacy, etc).  

I had no idea about medical records being hacked. There’s always something new to worry about. 

BassetHoundAnn

star26 wrote:

Warning: Receipts fade, some of them quite quickly. I learned that the hard way when I had to go back into some of my own manila envelopes just from the last 12-24 mos. Yes, you need to be prepared to present bank statements for the entire look back period. You will also need to account for all assets sold and nothing should have been sold for less than fair market value. 

Her bank account likely automatically comes with an ATM card which you can use as a debit card for everything without needing to open a new credit account. I agree with Jo C that it’s better to have 1 dedicated credit/debit card, preferably in her name, for all her expenses and nothing else. It’s easier for you too. And then her bank statements will automatically list all the expenditures (Target, Amazon, Pharmacy, etc).  

I had no idea about medical records being hacked. There’s always something new to worry about. 

Thank you so much Star for the tip about the ATM cards! I didn't know that. I will call my mom's bank tomorrow and ask for a card. Thank you!

It is certainly a bummer about the receipts fading. I think if one keeps a spreadsheet of expenses there's value and validity in that, but alas I haven't been doing that. 

I've had such crazy expenses in the last year taking care of mom. For example one day I racked up a couple hundred in cab fees. She refused to go to an appointment for a geriatric psych evaluation. She collapsed on the floor moaning, refusing to go to the doctor. I didn't think I could drive her the 20 miles to the appointment in that condition, melting down all the way, so I called a cab. Fortunately the driver was a woman who was sympathetic and understood what was going on. Together we got my mom into the cab and to the appointment. The cab drivers that day promised to text me receipts but never did. But I was so grateful for their help and compassion, and I was too tired to follow up and get receipts. Could anyone who has never cared for a family member with dementia understand such things? 

Last year I convinced my mom to gift her car to her nephew. It was the only way to get her off the road and get her keys out of her hand. Gee, I hope that doesn't get us in trouble with Medicaid a few years down the road. I guess we'll have to wait and see what happens. 

Again, thank you for the advice!

Ginsamae

Speaking as a caregiver and an accountant I would add that if you have access to a scanner I would recommend that you scan everything and save an electronic copy into appropriate folders on your computer. Folders could be categorized by year, then by type (medical, personal, etc), then by more detailed (medical - doctor, dentist, etc; personal - clothing, food, personal care, etc).  This would serve as a backup in the event that the paper files get lost or damaged...plus it will make it easier to give Medicaid and your tax professional the documents needed to process the application or do taxes.

Not to mention that paper takes up space whereas a digital copy will use a small amount of memory - and you can easily copy the files to give to whomever needs them. 

I've started doing this to document expenses for which my MIL reimburses us for - her monthly cell phone, food we've purchased for her exclusive use (she's diabetic), prescriptions, tickets to see plays or ball games, etc - I did this mostly so DH's siblings won't question all the checks that MIL writes us but I realize that it might come in handy down the road when we need to apply for Medicaid.

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BassetHoundAnn

Victoria2020 wrote:

I stay away from debit and ATM cards - they are DIRECT access to the money, a credit card is better -you are using the bank's money for a loan until you pay, hopefully in full monthly.

Or use a cash card from the same bank as where the checking is-limits the amount at risk to what you fund , easy to reload by transferring over funds from the "real" account and the numbers on it are useless so feel free to let caregivers take it to run errands.

More info: https://www.creditkarma.com/savings/i/debit-card-security-code.

 

Thank you for the link, Victoria! Very interesting. I've always been leery of debit cards for the reasons you mention. But I wondered whether I was being an old fuddy-duddy about it. <g> 

BassetHoundAnn

Ginsamae wrote:

Speaking as a caregiver and an accountant I would add that if you have access to a scanner I would recommend that you scan everything and save an electronic copy into appropriate folders on your computer. Folders could be categorized by year, then by type (medical, personal, etc), then by more detailed (medical - doctor, dentist, etc; personal - clothing, food, personal care, etc).  This would serve as a backup in the event that the paper files get lost or damaged...plus it will make it easier to give Medicaid and your tax professional the documents needed to process the application or do taxes.

Not to mention that paper takes up space whereas a digital copy will use a small amount of memory - and you can easily copy the files to give to whomever needs them. 

I've started doing this to document expenses for which my MIL reimburses us for - her monthly cell phone, food we've purchased for her exclusive use (she's diabetic), prescriptions, tickets to see plays or ball games, etc - I did this mostly so DH's siblings won't question all the checks that MIL writes us but I realize that it might come in handy down the road when we need to apply for Medicaid.

Excellent idea to scan those quickly fading receipts! I'm going to get on the horse and do this. Thank you Ginsamae!