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Medical Services Policy Manual, Section H

H 308 Determination of Uncompensated Value and Penalty Period H-300 Transfer of Resources

5. Determining the penalty period an uncompensated transfer due to the purchase of a life estate. When an uncompensated transfer is made and an individual applies for nursing facility services, that individual will not be eligible for a vendor payment until the penalty period has expired. An individual in a nursing facility will be eligible to receive a Medicaid card during the penalty period, provided he/she is otherwise eligible. The uncompensated value from a resource transfer is the difference between the fair market value of the resource at the time of transfer (Re. MS E-514 for real property and MS E-522 for personal property) and the value of compensation (cash, material goods, services, etc.) received for the resource (Re. MS H-306). A Home and Community Based Waiver (HCBS) applicant and/or spouse who transfer resources for less than fair market value during the look back period will be ineligible for the Waiver program until one of the following is met: • the applicant meets the criteria at MS H-310 to begin the penalty period, the penalty expires, and reapplication is made; or • the date of the transfer is no longer in the look back period; or • the applicant enters a nursing facility, an appropriate penalty period based on the transfer begins, the penalty expires, and reapplication is made for a HCBS Waiver. A Waiver recipient and/or spouse who transfer resources for less than fair market value after approval, will be ineligible for the Waiver program during the penalty period. At the end of the penalty period, reapplication will be necessary and all eligibility factors must be verified prior to approval. Determining the Penalty Period The number of months of ineligibility will be determined by dividing the uncompensated value of all resources transferred by the individual or spouse on or after the look back date by the current divisor (see Appendix R). There is no cap on the total number of months of ineligibility. Any fraction remaining after dividing the total uncompensated value by the divisor will not be dropped. The remaining fraction will be multiplied by 30 (days) and the resulting number will be rounded up to calculate the additional number of days of ineligibility. The penalty period will begin on the first day of the month of the transfer or the date on which the individual is eligible for Medicaid, whichever is the later date. Multiple Transfers – The eligibility worker will determine the penalty period for multiple resource transfers by treating the total cumulative, uncompensatedvalue of the resources