Page 11
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 11
A transfer of assets in exchange for total support and care requires a determination of the amount of the monthly support and care contribution provided by the individual to whom the asset was transferred.
iv. Unfair Compensation An asset is transferred for less than FMV if the compensated value received by the individual is less than the FMV of the asset on the date of transfer or contract for sale. If the asset was transferred for less than FMV, presume that the asset was transferred to establish eligibility for TennCare Medicaid benefits unless one of the following applies:
1. The individual can rebut either of the transfer presumptions: a. transfer to attain TennCare Medicaid eligibility, or b. receipt of unfair compensation; or 2. The transfer was executed by the individual’s legal representative, other than a spouse, without her knowledge or permission prior to 08/11/1993; or 3. Hardship is determined to exist for transfers of assets belonging to institutionalized individuals occurring 07/01/1988 or later.
The uncompensated value of the transferred asset is counted in determining the period of ineligibility for LTSS payments.
l. Life Care Contracts An individual who has transferred her available assets to a third party in exchange for full medical care for life is considered to have entered into a life care contract. Because the individual has a third party medical resource legally responsible for all her medical needs, these individuals are not eligible for TennCare Medicaid benefits. These provisions apply even if the full amount of the individual’s assets have been spent by the third party for her care, unless the contract between the two parties is void or not enforceable for some reason.
If the individual entered into a contract of more limited scope, i.e., the terms of the contract specified certain medical care limitations, she may be eligible for benefits.
i. Third Party Defined For purposes of this policy, third party includes any individual, institution, corporation, or public or private agency liable or potentially liable for all or part of an individual’s medical costs.