Reed v. Missouri Department of Social Services, Family Support Division

In 2003, Eileen Reed (plaintiff), who had Parkinson’s disease and had suffered a stroke, moved into the Blanchette Place Care Center (center). Because Reed struggled with speech, she did not communicate much and avoided the center’s social activities. Reed also struggled to feed herself. Lacking time to provide individual assistance, the center’s staff gave Reed nutrition shakes as a food alternative. Reed entered a personal-care contract with her daughter, Sandra Teson. Under the contract, Teson agreed to provide certain care services to Reed for the rest of her life. Those services included: helping Reed eat; assisting with cleaning and personal grooming; purchasing clothing, supplies, and hobby items; liaising between Reed, the center’s staff, and her various doctors; arranging transport to doctor appointments; and taking Reed on outings. Teson also rearranged her schedule to accompany Reed to the center’s social events. Teson filed the contract and a petition for compensation with the probate court, and the court ordered that $11,000 be paid to Teson from Reed’s estate. Reed then applied to the Missouri Department of Social Services, Family Support Division (division) (defendant) for Medicaid benefits. The division claimed that the $11,000 payment to Reed was a transfer of property for less than fair market value because the services to be provided by Teson were largely duplicative of those provided by the center. It therefore concluded that the payment disqualified Reed from receiving benefits for a penalty period of four months. After a hearing officer affirmed the division’s decision, Reed appealed in state court. The trial court held in Reed’s favor, finding that Teson’s care commitment under the contract constituted fair consideration for the payment and the payment therefore did not subject Reed to a penalty period. The division appealed.