Medicaid Policy
Medicaid Policy
Once a penalty period begins, it runs uninterrupted until the full penalty period has expired. The penalty period may need to be adjusted when transferred assets are returned. (575-8) It does not stop because the individual leaves the nursing home or stops receiving waiver services. If the individual leaves the institution and becomes eligible for a home and community based waiver, the penalty period continues to effect eligibility for waiver services. For NCW members, see sec. 386 or CTW see sec. 384. If the individual later reapplies, determine whether the penalty period is still in effect.
1. The penalty period begins on the date that the individual
o is an institutionalized individual and meets the medical criteria to receive services as an institutionalized individual, AND
o has applied for Medicaid, AND
o would otherwise be eligible for Medicaid for nursing home or long-term care services, except for the application of the penalty for transferring assets for less than fair market value, AND
o no other penalty period is in effect.
2. The penalty period for transfers involving a trust prior to February 8, 2006 begins with the first of the month the asset was transferred as long as no other penalty period is in effect. Penalty periods for multiple transfers must run consecutively.
When the transfer was to or from a trust, the date of transfer is the date the trust was established, the date when payment to a third party was made, or the date some action was taken to make the trust unavailable.
3. If the transfer was a stream of income, the value of the stream of income is determined by multiplying the life expectancy of the individual at the time of the transfer by the annual amount of income that would have otherwise been received. This is added to any other transferred amounts to set the penalty period.
Combine the uncompensated value of all assets transferred. This includes transfers that are less than the nursing home monthly average private pay rate as well as larger transfers.
The penalty period begins only after any previous penalty period ends. It does not start at the beginning of a month unless the person was institutionalized on the first day of the month and would have been eligible for Medicaid. For waiver members, the penalty period starts on the first of the month in which waiver services would have begun except for the application of the penalty period.
o Divide the total uncompensated value of the transferred assets by the nursing home monthly average private pay rate in effect at the time of application. (Table II-A)
o The number to the left of the decimal is the number of full months of the penalty period. The number to the right of the decimal, rounded down two places, is the fractional penalty period.
o Do not disregard any fractional penalty period.
From the start date of the penalty period, count forward the number of full months. Determine the number of days for any fractional penalty period as follows:
o Multiply the decimal amount remaining from the first formula by 30.
o The resulting whole number (left of the decimal) is the number of days of the partial month penalty period. Drop any amount to the right of the decimal (fraction of a day).
Nursing home or waiver Medicaid cannot begin until the day after the penalty period ends.
4. When both spouses apply for nursing home or waiver services, divide the penalty period(s) between them. Divide the penalty periods in the following manner.
o When both apply at the same time, divide the penalty period(s) equally between them.
o When one spouse applies, then the other member later applies, divide any remaining months of the penalty period equally between them.
o If one spouse leaves the nursing home or waiver program, or dies before the other, add any remaining months (and days, if applicable) of the penalty period of the spouse who is no longer institutionalized, or on a waiver, to the penalty period of the spouse who remains in the nursing home or on a waiver.
5. If the individual transfers assets or income after Medicaid eligibility has begun, determine the uncompensated value of the transferred amounts. Determine the penalty period and begin the penalty on the first day of the month following the date of the most recent transfer. Do not disregard any fractional transfers or any fractional penalty period. Complete an overpayment for any months during the penalty period that the individual received Medicaid for nursing home or waiver services. (825) Restrict Medicaid for any future months remaining in the penalty period.
If the individual transfers assets or income during a penalty period for a previous transfer, the penalty period for the new transfer (or transfers) begins the day after the previous penalty ends.
Complete an overpayment for the months the individual received Medicaid incorrectly (825). Restrict Medicaid for any future months remaining in the penalty period.