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32 TITLE 16 HEALTH AND SAFETY DELAWARE ADMINISTRATIVE CODE 20350.3 Penalty Period and Penalty Date The penalty period is a period of ineligibility for long term care Medicaid services that is imposed when an individual makes a transfer of assets for less than fair market value. Under OBRA 93 there is no maximum limit on the penalty period for assets transferred after 8/10/93. The length of the penalty period is based on the value of the assets transferred and the cost of nursing facility care. The penalty period cannot exceed 30 months for assets transferred on or before 8/10/93. The penalty date is the beginning date of each penalty period that is imposed for an uncompensated transfer. The penalty date for all individuals who transfer assets is the first day of the month in which the asset was transferred, provided that date does not occur during an existing penalty period. When a transfer takes place during an existing penalty period, whether imposed under the pre-OBRA 93 or post-OBRA 93 rules, a new penalty period cannot begin until the existing penalty period has expired. The penalty period for an institutionalized individual is equal to: - the total, cumulative uncompensated value of all assets transferred by the individual or spouse on or after the look- back date divided by - the average monthly cost to a private patient for nursing facility services at the time of application. The resulting figure is the number of months the applicant will be ineligible for Medicaid. In figuring periods of ineligibility, count full months only, regardless of the date in a month a transfer actually occurs. A full month is counted at the beginning of a period of ineligibility. That is, a period of ineligibility begins with the first day of the month in which a transfer has occurred. For example, if an individual has made a transfer on September 28, the period of ineligibility begins on September 1. If a calculation of the penalty period results in a partial month, round the days down to the end of the preceding month. For example, from a September 28 transfer, round down to make August the last month in the period. However, do not round a month up to the end of the month in which the transfer occurred. For example, do not round September 28 up to include the whole month of September. 20350.3.1 Penalty Period for assets transferred on or after 2/8/06 Section 6011(b) for the Deficit Reduction Act amends section 1917(c)(1)(D) of the Act to change the start date of the penalty period, which is the period during which an individual is ineligible for Medicaid payment for long term care services because of a transfer of assets for less than fair market value. The ineligibility period will begin with the LATER of: The month during which assets have been transferred for less than fair market value; or The date on which the individual is eligible for medical assistance under the State plan and is receiving institutional level of care services (based on an approved application for such services) that, were it not for the imposition of the penalty period, would be covered by Medicaid. The penalty period cannot begin until the expiration of any existing period of ineligibility. The penalty period will continue to run for the number of days determined by dividing the total value of assets transferred within the look back period by the State’s average daily cost to a private patient of a nursing facility services in the State. Once the penalty period is imposed, it will not be interrupted, but will continue to run even if the individual stops receiving institutional level of care. For non-institutionalized individuals, the penalty date will not begin until the individual is receiving an institutional level of care. Upon imposition of a period of ineligibility for long-term care level services because of an asset transfer, applicants/ recipients will be notified of the right to request an undue hardship waiver. In addition, long-term care providers may file an undue hardship waiver on behalf of the individual with the consent of the individual or the personal representative of the individual. See DSSM 20400.1.12.1. 10 DE Reg. 1613 (04/01/07) 20350.4 Multiple Transfers OBRA 93 provides that the penalty period will be based on the total, cumulative uncompensated value of the assets transferred. When a single asset is transferred, or a number of assets are transferred, the penalty period is calculated using the total value of the asset(s). When assets are transferred at different times, use the following methods for calculating the penalty periods. This policy applies to assets that were transferred on or after 2/8/06 and applications that were filed on or after 4/1/06. 10 DE Reg. 1439 (03/01/07) 20350.4.1 Transfers Made So That Penalty Periods Overlap