Estate of Ethel Barnett v. Department of Health & Human Services

Ethel Barnett lived in a nursing home. Ethel’s daughter, Amy Barnett, held a power of attorney and executed a personal-care contract on Ethel’s behalf. Under the contract, Amy was to provide certain personal services in exchange for compensation paid from Ethel’s estate (plaintiff). Specifically, Amy agreed to pay Ethel’s bills, file paperwork, shop for supplies, and transport Ethel to appointments. Additionally, during nursing-home visits, Amy agreed to assist Ethel with meals, personal hygiene, and visitations with Ethel’s sister. Amy provided approximately 14 hours of care for Ethel each week. Between December 2003 and June 2004, Amy received compensation under the care contract. In July 2004, Ethel applied for Medicaid. Maine’s Department of Health and Human Services (department) (defendant) concluded that the financial compensation paid to Amy for performing tasks already provided by the nursing home, such as helping with meals, personal hygiene, and visitations, was an improper transfer of assets for less than fair market value and rendered Ethel temporarily ineligible for Medicaid. The department therefore granted the Medicare application with a four-month penalty period, meaning that Ethel’s Medicaid coverage would not begin until December 2004. Amy filed suit to challenge the department’s decision, arguing that because her services were provided pursuant to a personal-care contract, the compensation payments did not trigger a penalty period.