## Facts

- Ethel Barnett lived in a nursing home and later sought MaineCare (Medicaid) coverage for long-term care.
- Barnett’s daughter, Amy Barnett, held a power of attorney and managed Barnett’s finances and affairs.
- Acting under that authority, Amy executed a written personal-care contract on Barnett’s behalf.
- Under the contract, Amy agreed to provide services in exchange for compensation from Barnett’s funds, including paying bills, handling paperwork, shopping for supplies, and transporting Barnett to appointments.
- The contract also contemplated that, during nursing-home visits, Amy would assist Barnett with meals, personal hygiene, and visits with Barnett’s sister.
- Amy provided about 14 hours of services per week.
- From December 2003 through June 2004, Amy received payments from Barnett’s funds under the contract.
- In July 2004, Barnett applied for MaineCare. The Department of Health & Human Services concluded that payments for tasks the nursing home already provided (such as help with meals, personal hygiene, and visitations) were transfers for less than fair market value.
- DHHS granted MaineCare but imposed a four-month penalty period, delaying coverage until December 2004.
- The Estate challenged DHHS’s penalty determination in a Rule 80C administrative appeal, arguing that the payments were made under a valid personal-care contract for services actually performed.

## Issues

1. Whether DHHS could treat payments made under an intra-family personal-care contract as a transfer for less than fair market value when the paid services overlapped with services the nursing home was already responsible to provide.
2. Whether the Estate carried its burden to show that the payments reflected bona fide, fair-market-value compensation rather than an uncompensated transfer.
3. Whether the agency decision imposing a four-month MaineCare penalty period should be upheld on Rule 80C review.

## Decision

- The Maine Superior Court upheld DHHS’s final decision imposing a four-month MaineCare ineligibility penalty.
- The court agreed that DHHS could treat compensation for services already provided by the nursing home as lacking compensable value for Medicaid eligibility purposes.
- The court rejected the argument that the existence of a written personal-care contract, by itself, prevented DHHS from applying the transfer-penalty rules.

## Legal Principles

- Medicaid rules impose a period of ineligibility when an applicant transfers assets for less than fair market value during the look-back period.
- Payments to family members for caregiving are reviewed closely; the applicant (or estate) must show the arrangement was bona fide and the compensation reflected fair market value for services actually provided.
- Where paid services duplicate care the nursing facility is already obligated to provide, the agency may treat the payments as providing no additional compensable value and therefore as an improper transfer.
- On Rule 80C review, the Superior Court generally upholds an agency decision that applies the correct legal standards and is supported by the administrative record.

## Conclusion

In Estate of Ethel Barnett v. Department of Health & Human Services, the Superior Court upheld DHHS’s four-month MaineCare penalty after DHHS determined that payments to Barnett’s daughter under a personal-care contract, to the extent they covered services already provided by the nursing home, constituted transfers for less than fair market value and delayed Medicaid eligibility.


Estate of Ethel Barnett v. Department of Health & Human Services, 2006 WL 1668138 (2006)