Mom lives with us and pays us $1,100 towards the mortgage, utilities, food and transportation. I don't want to mess up her Medicaid eligibility. Advice?

She doesn't have enough taxable income to file, and we claim her as a dependent. Would it be better to file Schedule E and claim the income (and depreciation etc) as rent (that portion of the house is strictly for her use) or to have a caregiver contract and claim it as regular income? And this might sound weird, but can that caregiver contract money be deducted on Schedule A as a medical expense?