2342 Transfer of Assets | Medicaid

An asset is used to pay a valid debt.

An asset is a valid loan.

An A/R transfers an asset to his/her community spouse, or to another individual for the sole benefit of the spouse. See Chart 2502.1, for a definition of sole benefit of.

An A/R can provide a satisfactory showing that he/she intended to dispose of the asset for fair market value, or for other valuable considerations. This would include situations where an individual is defrauded or executes a transfer as a result of misrepresentation.

All of the transferred resources/assets have been returned to the individual.

Denial of eligibility would cause an undue hardship. Undue hardship must be considered in every case. Refer to 2345 Undue Hardship Provision for ABD Medicaid.

An asset was transferred exclusively for a purpose other than to qualify for Medicaid.

An asset owned by the community spouse of an institutionalized A/R is transferred by the community spouse after eligibility is established.

An asset was transferred to a blind or disabled child (minor or adult) as established under title XVI or defined in section 1614 of the Social Security Act.

The homeplace was transferred (1) to the community spouse of the A/R or (2) child of the A/R if the child is under the age of 21 or is blind or is permanently and totally disabled.

The homeplace was transferred to a sibling of a LA-D A/R if the sibling has an equity interest in the home and has been residing in the home for at least one year immediately prior to the A/R entering LA-D.

The homeplace was transferred to a son or daughter of the A/R who has been residing in the home for at least two years immediately prior to the A/R entering LA-D, and the son or daughter was providing such care to the A/R as to permit the A/R to continue to reside at home rather than enter LA-D.

The assets were transferred to a trust established for the sole benefit of (1) the A/R’s disabled child or (2) a disabled individual who is under 65 years of age. Use the same definition of sole benefit of as for transfer to a spouse. See Chart 2502.1.

The transferred asset was any resource other than a homeplace that can be excluded under FBR policy.

The resource was excluded under Non-FBR policy and was transferred into a trust.

The community spouse of an A/R transfers an asset to anyone for purposes other than the sole benefit of him/herself during the 36 month look back period. Refer to Chart 2502.1, for definition of sole benefit of.

An A/R gives away or sells an asset for less than CMV, or refuses an inheritance, during the 36 month look back period or anytime thereafter.

An A/R transfers non-excluded assets into a trust during the 60 month look back period or anytime thereafter.

An A/R transfers homeplace property to anyone other than those individuals listed in the above exceptions.

An asset held by an A/R in common with another individual or individuals in a joint tenancy, tenancy in common or similar arrangement, shall be considered to be transferred by the A/R when any action is taken, either by the A/R or the other owner(s), to reduce or eliminate the A/R’s ownership or control.

If an A/R’s asset is given to someone (other than spouse) who has provided care to the A/R who at the time provided the care for free, presume that the services were intended to be provided without compensation. Thus, a transfer to a relative or others for care provided for free in the past is a transfer of assets for less than FMV. However, an individual can rebut this presumption with tangible evidence that is acceptable.

The community spouse of an A/R transfers an asset (including income) to anyone during the application process for purposes other than the sole benefit of him/herself during the 60 month look back period. Refer to Chart 2502.1, for definition of sole benefit of.

The community spouse of an A/R transfers an annuity or homeplace to anyone for purposes other than the sole benefit of him/herself during the 60 month look back period or any time thereafter.

An A/R gives away or sells an asset for less than CMV, or refuses an inheritance, during the 60 month look back period or anytime thereafter.

The A/R or community spouse purchases a life estate interest in another individual’s home without having lived in the home for at least 12 consecutive months from the date of purchase. Refer to 2322 Life Estate and Remainder Interests.

An A/R transfers non-excluded assets into a trust during the 60 month look back period or anytime thereafter.

An A/R transfers homeplace property to anyone other than those individuals listed in the above exceptions. (See OBRA '93.)

An asset held by an A/R in common with another individual or individuals in a joint tenancy, tenancy in common or similar arrangement, shall be considered to be transferred by the A/R when any action is taken, either by the A/R or the other owner(s), to reduce or eliminate the A/R’s ownership or control.

If an A/R’s asset is given to someone (other than spouse) who has provided care to the A/R who at the time provided the care for free, presume that the services were intended to be provided without compensation. Thus, a transfer to a relative or others for care provided for free in the past is a transfer of assets for less than FMV. However, an individual can rebut this presumption with tangible evidence that is acceptable.

an individual alleges a resource transfer

an individual’s resources exceed the statutory limit for one or more months of the review period and decline in subsequent months

other evidence, such as an IRS alert indicating the sale of land or stock.

the nature of the transfer-whether the asset was sold, given away, exchanged for goods or services, etc.

the method of transfer-whether the property was listed with an agent and sold, transferred without financial considerations, disposed of through purchase(s), etc.

the date of transfer

a description of the transferred property

the market value of the transfer - the amount of cash transferred or the estimated current market value (CMV) minus encumbrances of the property the month of transfer

the amount of compensation received, if any, whether there were proceeds, their value and whether additional consideration is expected and when

any remaining ownership interest, such as a partial interest.

The individual cannot provide enough information about the alleged purchases to establish his/her resource eligibility status as of the first moment of each relevant month.

Information in the files makes the allegations questionable

Compute and document the correct penalty.

Notify the A/R that the penalty is being imposed, and that the undue hardship provision was considered and determined not to be applicable.

For all cases involving a penalty of more than five years, document the case in Case Notes and scan all verification and supporting documents into the document imaging system.

A/R’s requesting nursing home service or Institutionalized Hospice in the nursing home will not be eligible for a vendor payment. Determine eligibility as usual. Do not authorize a vendor payment. The A/R is responsible for paying the Medicaid rate to the NH/Hospice provider.

A/R’s requesting services under a home and community-based waiver (CCSP, ICWP, NOW/COMP, non-institutionalized Hospice, Katie Beckett) will be ineligible for home and community-based services (not receiving waivered services). Do not determine eligibility under the Medicaid CAP. Complete a CMD. Hospital is not included in the above.

the month that the resource was transferred, or

the month that the A/R is otherwise Medicaid eligible

the month after the month of discovery if timely notice can be given,

The second month after the month of discovery if timely notice cannot be given for the month after discovery.

A/R’s requesting nursing home service or Institutionalized Hospice in the nursing home will be Medicaid eligible but not eligible for a vendor payment. Determine eligibility as usual. Do not authorize a vendor payment for whole months of the penalty. The A/R is responsible for paying the private pay rate to the NH/Hospice provider for the full months of the penalty. For the month in which a fraction of a penalty is applied, the A/R will have the vendor payment paid, but the patient liability amount will be increased according to a dollar value of the partial penalty, even if income has otherwise been protected in that month. See the DRA '05 Penalty Computation Form on page 12 for how to compute whole and partial months’ penalty and the partial month dollar amount.

A/R’s requesting services under a home and community-based waiver (CCSP, ICWP, NOW/COMP, non-institutionalized Hospice) will be ineligible for home and community-based services (not receiving waivered services). Deny/terminate the HCBW case. Do not determine eligibility under the Medicaid CAP. Complete a CMD. For the month in which a fraction of a penalty is applied, the A/R will be eligible and will have the vendor payment paid, but the cost share amount will be increased according to a dollar value of the partial penalty, even if income has otherwise been protected in that month.

Begin the penalty with the first transfer.

Impose the penalty for the second transfer to begin the month following the expiration of the first penalty.

Impose the penalty for the third transfer to begin the month following the expiration of the second penalty.

Continue the process as necessary for additional transfers.

Treating the total cumulative uncompensated value of all assets transferred by the A/R or spouse (if applicable) during all months on or after the 60 month look back period as one transfer; and

The start date of the penalty for applicants is the first day of a month in which the asset(s) was transferred or the first month in which the A/R is otherwise eligible for LA-D Medicaid, whichever is later. For recipients, the penalty begins the month after month of discovery (allowing for timely notice) and the A/R is in LA-D.

If the income is a lump sum, determine a penalty based on the value of the lump sum minus ordinary and legitimate expenses.

If the A/R assigns or gives away a stream of income or the right to a stream of income, base the penalty period on the combined actuarial value of all payments transferred. Obtain this figure from the payment source, if possible. See Multiple Transfers above.

For transfers of individual income payments that are less than the private pay rate, impose partial month penalty periods.

If the A/R or spouse does not reside in the home for a minimum of 12 consecutive months following the date of purchase. Brief rehab stays or vacations do not necessarily negate residency but should involve investigation. To regard a house as a residence, take into consideration:

If the individual who purchases a life estate moves out of the home prior to the end of the 12-month period. The date of transfer is the date of purchase of the life estate, and the uncompensated value is the full amount paid for the life estate as if the individual never moves into the home.

If the life estate was not purchased for the FMV.

If the person’s life expectancy is less than the value of the life estate purchased.

If the person makes a gift of the life estate.