Medicaid Policy
Medicaid Policy
Contact DHHS Policy Specialist for Previous Policy (371-9 was renumbered to 575-9 as of November 1, 2017)
Waiver of the Penalty Period
Upon notice that Medicaid services for long-term care will be restricted, the member can request for a waiver of the penalty period or restriction on the basis of undue hardship.
The member or representative must send a written request to the eligibility worker within 30 days after the date printed on the notice sent to the member regarding the penalty period decision. If the 30th day is a Non-business Day, the member or representative has until the Business Day following the 30th day to send a written request. The member, the member's spouse or representative, or the institution where the member resides (with the member's consent) may request a waiver of the penalty period based on a claim of undue hardship. The request must include an explanation of what has been done or is being done to regain possession or access to the assets and why the member believes undue hardship exists.
The eligibility worker will forward the request and the supporting documentation to the Office of Eligibility Policy (OEP). OEP will review the request and the supporting documentation to determine if an undue hardship exists warranting a waiver of the penalty period. Even if undue hardship exists, OEP may determine that the member must take further action or follow-up on actions to regain or access the transferred assets. When the restriction is based on the equity value of the member's home, "accessing the asset" means to take steps to receive the equity value of the home for the member's use in meeting his or her expenses.
Undue hardship exists if the following criteria are met.
The member cannot access the assets immediately, but is taking all reasonable steps including legal actions to access or regain possession of the transferred asset, AND
A medical doctor certifies that the member is at risk of death or permanent disability without the institutional care, or the member would be deprived of food, shelter and other necessities of life without Medicaid coverage.
To determine if the member is at risk, the OEP will compare the income and resources of the member and the member's spouse, or the parents of a minor member, to the cost of:
medical care not covered by insurance or Medicaid,
diapers
special foods
normal living costs
spenddown
OEP will inform the eligibility worker of its decision. The eligibility worker will send a decision notice to the member within 30 days of receipt of the request. OEP may decide:
That undue hardship exists and that the member must take all reasonable steps to access the assets. The notice will give the member a due date to verify the steps taken and the result of such steps.
That undue hardship does not exist. The member has 90 days from the date printed on the undue hardship decision notice to request a fair hearing. If the 90th day is a Non-business Day, the member has until the Business Day following the 90th day to request a fair hearing.
That based on factual evidence, reasonable steps would either not be successful, or that the cost of trying to access the assets would be more costly than the assets. The member is responsible for providing the factual evidence to prove this. OEP can make this decision either before or after requiring the individual to take all reasonable steps to access the assets. In this case, OEP will determine not to apply a penalty period.
(See section 125 for fair hearing policy.)
If the member would qualify for institutional Medicaid except for the penalty period, and the agency decides undue hardship exists, Medicaid coverage can go back to the date eligibility would have begun.
Review of Undue Hardship Waiver
If OEP grants a conditional waiver while member is taking action to regain access to or possession of the transferred asset , the eligibility worker must periodically review the decision to waive the penalty period to determine if undue hardship still exists. The review will occur no later than six (6) months after Medicaid approves the undue hardship waiver. At the time of the review set by the eligibility worker, the member must provide verification of what steps he or she has taken to access the assets. The eligibility worker will send the verifications to OEP to review. Upon review, one of the following decisions may be made:
That the member has taken the required steps to try to access the asset, more time is needed to determine the outcome of those steps, and the member still meets the undue hardship criteria. In this case, OEP will tell the eligibility worker to continue the undue hardship waiver while the member continues to pursue all reasonable steps to access the assets and set a new due date for verification of the steps taken and review of the waiver.
That the member has taken all reasonable steps, they have been unsuccessful and based on the evidence, further steps are likely to be unsuccessful or will be too costly. If OEP determines that the member has taken all reasonable steps and that further actions are likely to be unsuccessful or too costly, OEP will notify the eligibility worker not to apply the penalty period.
That the member has not taken all reasonable steps to access the assets.
If OEP determines the member has not taken all reasonable steps, close the Medicaid program.
See section 825 for medical assistance overpayments.
The eligibility worker will notify the member of the decision made upon review of the undue hardship waiver. The member has 90 days from the date printed on the decision notice to request a fair hearing if the undue hardship is discontinued upon review. If the 90th day is a Non-business Day, the member has until the Business Day following the 90th day to request a fair hearing.