Page 23

Louisiana Medicaid Eligibility Manual Eligibility Factors

Reissued October 21, 2025 Page 23 of I-1670 Replacing January 27, 2025 Revised/added text indicated by underscore Deleted text indicated by “**” Medicaid eligibility, the penalty period begins the date on which the individual would have been eligible for payment of nursing facility or HCBS waiver services, but for the imposition of the penalty. The applicant is informed of the penalty period as part of the written notice of decision.

For transfers which occurred after the effective date of Medicaid eligibility, penalties will not be served in retroactive periods. The penalty period begins the first day of the month after the month in which assets were transferred and advance notice expires. Written notice of adverse action (issued at least 10 days before the adverse action takes effect) must be sent to the beneficiary or representative before a penalty period may be imposed.

Once a penalty period begins to run, it continues for the duration of the penalty period. The penalty period does not start and stop for reasons such as discharge from the nursing facility or waiver program.

Example: An individual enters a nursing facility and a penalty period is imposed for six months. Three months into the penalty period, the individual discharges from the facility and returns to the community. Five months later the individual enters a nursing home, applies for Medicaid, and is found eligible. Medicaid will pay for their care as the penalty period has expired.

When a spouse transfers an asset that results in a penalty for the individual, divide the penalty between the spouses when:

● The spouse is eligible for Medicaid;

● A penalty could, under normal circumstances, be assessed against the spouse, i.e., the spouse is institutionalized; and

● Some portion of the penalty against the individual remains at the time the above conditions are met.

Example: Mr. Smith enters a nursing facility and applies for Medicaid. Mrs. Smith transfers an asset that results in a 36-month penalty against Mr. Smith. Twelve months into the penalty period, Mrs. Smith enters a nursing facility and becomes eligible for Medicaid. The penalty period against Mr. Smith has 24 months to run. Because Mrs. Smith is now in a nursing facility, and a