Medicaid Policy
Medicaid Policy
Medicaid cannot pay for long-term care services in a nursing facility or under a home and community based waiver during a penalty period applied for transferring assets or when an individual has substantial equity in his or her home (Table II-A). If the individual later becomes eligible for Medicaid, do not use the expenses the individual incurred while services were restricted at any time to reduce the individual's cost-of-care or spenddown to receive Medicaid for long-term care services. (For NCW eligible members, see 386 or CTW see 384 to decide when transfer of assets policy applies.)
Restriction for Transfers for Less Than Fair Market Value.
Medicaid may restrict services available to the member for nursing home services and long-term care services under a waiver when a member or spouse has:
• Transferred an asset for less than fair market value on or after the look-back date
• Reduced or eliminated access to or ownership of an asset on or after the look-back date
• Transferred income or a right to a stream of income on or after the look-back date
The amount of time Medicaid restricts services depends on the value of the asset. See 575-10 to determine when the penalty period starts and how long it will be.
Restriction for Substantial Home Equity
Medicaid also restricts nursing home services and long-term care services under home and community-based waivers when the individual's equity value in the individual's home exceeds the limit on Table II-A.
If the individual applied before January 1, 2006 and remains continuously eligible for nursing home or waiver services based on that application date, do not restrict services based on substantial home equity.
If an individual borrows against the equity of the home, do not decrease the equity value until the individual actually receives the cash. The cash received is a countable resource. Verify the arrangements and the amount of funds the individual receives. Any such arrangements must be completed under a written, legally enforceable contractual agreement that includes a repayment arrangement.
This restriction applies as long as the equity exceeds this amount. An exception to this requirement applies only in the following two situations:
The individual's spouse lawfully resides in the home, or
The individual's minor child, or blind or disabled child, lawfully resides in the home. Unless presented contradictory evidence, assume the occupation of the home by a spouse, or a child is lawful.
When to determine home equity value:
Determine equity value at the time an individual applies for either institutional or HCB waiver services. For a member who is eligible for Medicaid and then enters an institution, the application date is the date of entry to the institution. For waivers, use the first of the month for which the member requests waiver services.
Do this at each subsequent review because equity values change over time. If the equity in the individual's home exceeds the limit on Table II-A when you complete a review, restrict nursing home or waiver services from that point forward.
If the determination of home equity was not completed at the earliest time it should have been (either at application or at the first review as applicable), an overpayment may have occurred. (825)
Take appropriate action for future eligibility based on the current equity value.
A member may claim undue hardship if the agency restricts long-term care services because the member or spouse transferred assets or because the individual has substantial home equity (575-9).
Consider the member’s eligibility for non-institutional Medicaid to cover ancillary services.