Tag Archives: Medicaid rules

Possible Medicaid Changes

Medicaid Cost Cutting

One of the various changes proposed by candidate Trump was the idea of shifting Medicaid responsibility from the Federal Government to the States.  The rational proposed by Trump was that such a move would “maximize flexibility to states via block grants so that local leaders can design innovative Medicaid programs that will better serve their low-income citizens.”  As it currently runs, States, like Maryland, really heavily on Federal government support for Medicaid benefits for at risk groups, including seniors in nursing homes.  This proposal is not a new one.  It was first proposed by New Gingrich in 1995, then in 2003 by President George W. Bush and by House Republicans in 2011.  The practical effect to the States would be to reduce Federal funding and shift the payment responsibilities to the States.  The States in turn will either have to dramatically increase taxes to carry the extra burden or reduce reimburse rates to nursing homes, reduce what is covered under Medical Assistance, or likely restrict Medical Assistance eligibility.

As of right now, this is just a proposal.  If this proposal moves forward, I will continue to post the practical impact this will have on Maryland at-risk seniors.

Another Win! – Medical Assistance Issue

We just won another Medical Assistance appeal issue.  In this case, Medical Assitance was initially denied for nursing home benefits and the son of the Medical Assistance applicant was handed an invoice from the nursing home for over $100,000.  Needless to say, he was upset.  We were able to successfully argue that that the transactions at issue were not Medicaid Penalty transfers and that full Medical Assistance benefits should have been granted from day 1.  We received the Administrative Law Judge opinion today removing approximatley 98% of the penalty.  Client is happy.

New Medicaid Numbers

Medicaid Spousal Impoverishment Figures for 2012

The new minimum community spouse resource allowance (CSRA) is $22,728, and the new maximum CSRA is $113,640. The new maximum monthly maintenance needs allowance is $2,841. The minimum monthly maintenance needs allowance remains $1,838.75.  This has yet to be implemented for Maryland.  It is expected to come out shortly.  It is unclear if this will be retroactive to January 1, 2012.

In part, what this means is that the community spouse of a Medical Assistance applicant can have no more than $113,640 in countable assets at the point when she is seeking eligiblity for the nursing home spouse.  The prior maximum amount allowed was $109,560.

What is a countable asset?

For Medical Assistance (i.e. Medicaid) eligibilty, Maryland will examine the amount of assets held by the applicant and by the applicant’s spouse (if any).  The most the applicant may have at the time of filing is $2,500 and the most a spouse may have (currently) is $109,560.  The bigger question is what is a counable asset?  This may seem to be very straightforward but is absolutely not an easy question to answer.  For example, we often are asked if automobiles are countable assets.  The answer is no, so long as it is not a luxury automobile (however, there is no set defination of a luxury automobile).  Some assets are relatively straightfoward and it is easy to see how they are countable assets.  This includes bank accounts in the applicant’s name.  But what about burial plots?  The applicant is allowed to have 2 burial plots.  But, what if he has his name on 3 burial plots, then what?  That’s when you call your elder law attorney.  What happens if I jointly hold my account with mom and I contributed my own money into mom’s account.  Is “my money” part of her countable asset.  That is when you call your elder law attorney.  What happens if my mom has a reverse mortgage on her house, is this a countable asset?  Again, you need to call your elder law attorney.  The point is, this area of elder law is confusing, it changes, and the deteermination of what is a countable asset does vary state to state.  And, most importantly, the determination of a countable assets will be absolutely critical when filing the Medical Assistance application and determining which assets can be saved.

Nursing Home Asset Protection

A good portion of our clients engaged in virtually no planning (before they came to our office) when faced with a parent or loved one entering a nursing home.  Even in this late stage of the game, there are plenty of opportunities to protect a parent’s or loved ones’ assets from nursing home related costs.  The key document to this process is the financial power of attorney for the nursing home resident.  Without a doubt, this document will be key to the asset protection process.  Ideally, this power of attorney was drafted by an attorney and, if recently executed, conforms with the new Maryland provisions relating to financial powers of attorney.  Without this document, the next question is whether or not the nursing home resident can sign a new financial power of attorney.  Even if this person cannot sign (or should not sign), then seeking court authorization will be neccessary.  The absolute key is that just because one enters the nursing home do not assume that you can’t save assets at that point.  That assumption is totally incorrect.

Medical Assistance Update

FIA Transmittal 11-26

The Department of Human Resources just released an update changing the document requirements for a Medical Assistance application.  The changes for what is required in the initial application is a profound change in terms of the financial statement documentation that is initially needed.  Instead of a full five years worth of documentation, what would be needed initially is a snap shot of statements covereing the eligiblity month and then the previous years statements but only for the anniversary month (i.e. if you are seeking eligiblity for July 2011, then you would need financial statements for July 2010, July 2009, July 2008, July 2007, and July 2006).   However, an additional item that will be needed are tax returns for the previous five years.   These new provisions take effect for all applications beginning May 1, 2011.

Asset Transfer Does Not Trigger Penalty

Normally, for every $6,800 transferred out of a Medical Assistant’s name or their spouse, it will result in a penalty of one month of ineligibility.  However, a frequent question is what happens if my parent transferred funds when they were healthy but during the five year look back period? 

 Maryland case law on this is silent.  However, a New Jersey case highlights, at least in New Jersey, how the court ruled in favor of the applicant with a $100,000 transfer.

“A New Jersey administrative law judge finds that a Medicaid applicant who was healthy at the time he transferred funds to his daughter transferred the funds for a reason other than to qualify for Medicaid. R.C. v. Division of Medical Assistance and Health Services and Hudson County Board of Social Services (N.J. Office of Administrative Law, Hudson County, OAL DKT. NO. HMA 08047-10, Oct. 22, 2010).

 While R.C. was healthy he transferred $100,000 to his daughter to help with her financial problems. A year later, R.C. suffered a stroke and his health began to deteriorate. He was eventually admitted to a nursing home.

 R.C. applied for Medicaid benefits. The state denied benefits, finding that R.C. had made an uncompensated transfer of assets to his daughter. R.C. requested a hearing.

The administrative law judge (ALJ) reverses, finding that the transfer was made exclusively for a purpose other than establishing Medicaid eligibility. The ALJ concludes that because R.C. was employed and in good health when the transfer occurred and the stroke was unexpected, R.C. provided convincing evidence that he did not transfer the money in order to qualify for Medicaid.” From Elderlawanswer.com.

Federal law and the Maryland Medical Assistance Manual allow this exception.  However, in practical terms, there is a huge gray area concerning which facts fit within this exception.  If this exception were to be utilized in a Maryland Medical Assistance application, expect the application to be denied and the issue to be decided on appeal.

Gravesites

Watch Out!

From a Maryland perspective, Medical Assistance (i.e. Medicaid) only allows one gravesite per person to be exempt.  If there is a community spouse, then that community spouse is also only allowed to have one.  If there is more than one per person, it is a fully countable asset for Medicaid purposes and the application may be denied.