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COMBINED MEDICAID 404-2 Penalty Periods for Asset Transfers

Supersedes: CMA 404-2 (07/01/2024) Reference: 20 CFR 416.1246; ARM 37.82.101, .417; 42 U.S.C.1396p(c)(1)(E); P.L. 109- 171; P.L. 109-432 Overview: ABD and ACA: A penalty period may be imposed when an HCBS waiver or institutionalized Medicaid client and/or their community spouse transfers assets for less than fair market value. The client is ineligible for Medicaid payment of waiver or institutional services during the penalty period; however, the client may be eligible for other services during this time. Assets transferred prior to the month the client enters a nursing home are not considered in a resource assessment because neither the client nor their community spouse owns the asset once it has been transferred. The asset transfer penalty is a separate issue and may apply when the client requests nursing home or waiver Medicaid coverage. NOTE: No penalty can be imposed for assets transferred before the look-back period. CALCULATING PENALTY PERIOD: Calculate the penalty period by dividing the uncompensated value of the transferred assets by the average daily cost of nursing home care at the time of Medicaid application or transfer, whichever is later.

AVERAGE COST OF NURSING HOME CARE: