25.04 Penalty period for disallowed transfers

Definition: Otherwise eligible For purposes of determining the start date of the penalty period because of disallowed transfers, an individual is considered “otherwise eligible” for Medicaid coverage of long-term care services and supports as of the earliest date they pass all eligibility criteria in the sequence listed below. They must also meet each of these criteria in any month for which they request retroactive eligibility: (i) Clinical criteria (see definition of long-term care in § 3.00). (ii) Citizenship and identity criteria (§ 17.00). (iii) Category (§ 7.03 (MCA), §§ 8.05 and 8.06 (MABD)). (iv) Residency (§ 21.00). (v) Living arrangements (§ 20.00). (vi) Resources (§ 29.07), if applicable. (vii) Income (§§ 28.03 and 28.04 (MCA), § 29.11 (MABD) - for anyone with excess income, see explanation in (2) below). When an individual’s income exceeds the income requirement for their applicable coverage group, the individual must spend down to the applicable PIL in the month of application or the next month. An individual with a penalty is subject to the penalty period start date beginning on the date the spenddown is met. If the spenddown is not met in the month of application or the next month, the individual is denied Medicaid coverage of long-term care services and supports. AHS then determines whether the person is eligible for Medicaid (other than Medicaid coverage of long-term care services and supports). If so, it assesses a 6-month spend down. Examples: (i) The individual applies in June for Medicaid coverage of long-term care services and supports under MABD and requests retroactive coverage as of April. The individual meets all eligibility criteria but their gross countable income exceeds the IIS and they have transfers that will result in a 38 day penalty period. The spenddown period is April – September. The individual meets their spenddown on April 23rd. April 23rd is the date the individual is considered to be “otherwise eligible.” Their penalty period would be April 23rd – May 30th. (ii) Same case as in (i), but no retroactive coverage is requested. The spenddown period is June- November. The spenddown is met June 23rd. June 23rd is the date the individual is considered to be “otherwise eligible.” The penalty period is June 23rd – July 30th. Penalty period – in general. If a transfer is disallowed, a penalty period of restricted Medicaid coverage to an otherwise eligible individual is imposed. During this period, no Medicaid payments are made for the individual’s long-term care services and supports. Payments are made for all other covered Medicaid services provided to the individual during the period of restricted coverage. Special Rules for Medicaid Coverage of Long-Term Care Services and Supports – Eligibility and Post Eligibility Part 4 – Page 18 (Sec.25.00, Sub.25.04) Penalty date Transfers made in a single month. The penalty date is the beginning date of each penalty period imposed for a disallowed transfer. The penalty date starts on the first day in which the individual would have been otherwise eligible for Medicaid coverage of long-term care services and supports (see paragraph (a) of this subsection for explanation of “otherwise eligible”). Transfers occurring in different months. Penalty periods run consecutively rather than concurrently, in the order in which the transfers occurred. If, after establishing a penalty period for disallowed transfers, it is determined that additional disallowed transfers were made in a subsequent month but before the end of the first penalty period, the first day following the end of the first penalty period will be designated as the penalty date for the subsequent penalty period. Penalty period Calculation of penalty. The number of days in a penalty period are equal to the total value of all disallowed transfers made during a given calendar month divided by the average daily cost to a privately- paying patient of nursing facility services in the state as of the date of application or the date of discovery, if additional disallowed transfers are discovered after the initial determination of eligibility for Medicaid coverage of long-term care services and supports. Transfers in different calendar months. Penalty periods for transfers in different calendar months are consecutive and established in the order in which the disallowed transfers occurred. Continuous nature of penalty period. A penalty period runs continuously from the first date of the penalty period, even if the individual stops receiving long-term care services and supports. Penalty when both spouses request Medicaid coverage of long-term care services and supports In general. The following rules are applied to the assignment of penalty periods when both members of a couple are requesting or receiving Medicaid coverage of long-term care services and supports. Spouses eligible at same time. For spouses determined otherwise eligible for Medicaid coverage of long- term care services and supports at the same time, the value of the disallowed transfer is divided by two to determine the number of days of restricted coverage for each member of the couple. Penalty period for one spouse is running at the time the other requests Medicaid coverage of long-term care services and supports. If the penalty period established for one member of the couple has not yet expired when the other member of the couple requests and is determined otherwise eligible for Medicaid coverage of long-term care services and supports, the number of days remaining in the penalty period is divided by two to determine the number of days of restricted coverage for each member of the couple. Death of a spouse during penalty period. When the member of the couple for whom a penalty period has been established dies, the days remaining in that member’s penalty period are not reassigned to their spouse if the spouse requests and is determined otherwise eligible for Medicaid coverage of long-term care services and supports. Special Rules for Medicaid Coverage of Long-Term Care Services and Supports – Eligibility and Post Eligibility Part 4 – Page 19 (Sec.25.00, Sub.25.05) Penalty periods for transfer by second spouse to request Medicaid coverage of long-term care services and supports. When a penalty period is established for a disallowed transfer by the second member of the couple to request and be determined otherwise eligible for Medicaid coverage of long-term care services and supports, that penalty period is assigned to the spouse who made the transfer provided that it was made after the determination of disallowed transfers for the first spouse.