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Aged, Blind and Disabled Manual Policy Manual Number: 125.010 Section: Institutional Medicaid Chapter: Transfer of Assets and Penalty Periods

January 5, 2026 Division of TennCare 1

Aged, Blind and Disabled Manual; Section: Financial Eligibility Requirements; Policy Manual Number: 125.010; Chapter: Transfer of Assets and Penalty Periods

Legal Authority: Social Security Act § 1917(c); 42 USC 1396p; State Medicaid Manual § 3257; Tenn. Comp. R. & Regs. 1200-13-20-.08(5)(i-j)

1. Transfer of Assets for Less than Fair Market Value (FMV)

a. Policy Statement

The uncompensated value of a transferred asset is considered available and countable for the purpose of determining eligibility for TennCare Medicaid Long-Term Services & Supports (LTSS) payments. The uncompensated value of a transferred asset is the equity value minus the amount received by the individual. An otherwise eligible Medicaid applicant or recipient is ineligible for payment of LTSS payments (nursing facility or Home and Community Based Services (HCBS)) for a period directly related to the uncompensated value of an asset transferred for less than Fair Market Value (FMV).

Only the uncompensated value of an asset transferred on or after an individual’s look-back date is considered available and countable for the purpose of determining eligibility for TennCare Medicaid LTSS payments.

b. Definitions

Term Definition Asset Asset refers to the value of the resource involved in the transfer, e.g., cash, bank accounts, bonds, real estate, etc. As of 8/11/1993, asset also refers to the value of the income, as well as the resource, of the total uncompensated value transferred.

Equity Value The price that an item can reasonably be expected to sell for on the open market in a particular geographic area minus any encumbrances. FMV The price that an item can reasonably be expected to sell for on the open market in a particular geographic area at a given time.