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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 12

ii. Enforceable Contract An enforceable contract does not exist when its terms cannot be fulfilled and are void or rescinded. A contract is rescinded when the third party is financially unable to fulfill its contractual responsibilities. Under these circumstances, the third party is legally obligated to return to the individual any remaining assets from those originally assigned in the contract.

The individual may be eligible for TennCare Medicaid after requiring a financial accounting from the third party of the following: 1. The full amount of income and resources originally assigned to the third party by the terms of the contract; 2. Total expenses paid and fees charged by the third party; and 3. The full amount of the refund.

The full amount of the refund is a countable asset.

iii. Contractual Agreement Limited in Scope The contractual agreement that is limited in scope, i.e. limited to basic room and board, or basic room and board and partial medical services, may not preclude TennCare Medicaid eligibility.

Determine the individual’s eligibility and review his transfer of assets to the third party as described in the transfer of assets policy, Section 1 Transfer of Assets for Less than Fair Market Value (FMV) of this chapter.

If the individual is determined to be eligible, TennCare Medicaid reimbursement is available for those items encompassed within the State Plan that are not included in the life care contract. The individual must fax or mail a copy of the life care contract to the TennCare TPL Unit, who will enter the resource in the database.

TennCare TPL Unit 310 Great Circle Road – 3W Nashville, TN 37228-1752 FAX – (615) 734-5113

2. Penalty Periods For Assets Transferred for Less than FMV a. Policy Statement An otherwise eligible TennCare Medicaid individual is ineligible for payment of TennCare Medicaid LTSS payments if a transfer of assets for less than FMV has occurred. Individuals in long term care facilities (LTCF) may be approved for TennCare Medicaid benefits in an