25.05 Undue Hardship

In general. AHS does not establish a penalty period resulting from a disallowed transfer when it determines that restricted coverage will result in an undue hardship. Undue hardship is considered only in cases where AHS has first determined that a transfer has been made for less than fair market value and that no transfer exception applies (see § 25.03). Definition: Undue hardship For purposes of this subsection, undue hardship means depriving the individual of: (i) Medical care, such that the individual’s health or life would be endangered; or (ii) Food, clothing, shelter, or other necessities of life. Undue hardship does not exist when the application of a transfer penalty merely causes an individual or the individual’s family member(s) inconvenience or restricts their lifestyle. Undue hardship does not exist when the individual transferred the assets to their community spouse and the community spouse has countable or excluded resources in excess of the community spouse resource allocation (CSRA) standard (§ 29.10(e)). Undue hardship reasons. In determining the existence of undue hardship, all circumstances involving the transfer and the situation of the individual are considered. Undue hardship is established when one or more of the following circumstances, or any other comparable reasons, exist: Whether imposition of the transfer penalty would result in the individual’s immediate family qualifying for SSI; Reach Up; AABD; General Assistance; 3SquaresVTs; or another public assistance program requiring a comparable showing of financial need. Whether funds can be made available for the cost of the individual’s long-term care services and supports only if assets such as a family farm or other family business are sold, and the assets are the primary source of income for the individual’s spouse, parents, children or siblings. Whether an agent under a power of attorney (POA) or a guardian of the individual transferred the asset, and the POA or guardian was not acting in the best interest of the individual when the transfer was made as determined by AHS or a court, or the transfer forms the basis for a report to AHS for investigation of abuse, neglect or exploitation. Whether the individual was deprived of an asset by exploitation, fraud or misrepresentation. Such claims must be documented by official police reports or civil or criminal action against the alleged perpetrator or substantiated by AHS or by a sworn statement to AHS attesting to the fact that the claim was reported to Special Rules for Medicaid Coverage of Long-Term Care Services and Supports – Eligibility and Post Eligibility Part 4 – Page 20 (Sec.25.00, Sub.25.05) the police or to the AHS department responsible for substantiating such claims. Whether the individual cannot recover the assets due to loss, destruction, theft, or other similar circumstances. Presumption of care and rebuttal of presumption. (i) Presumption. When the transfer is to a person, AHS presumes the recipient of the transferred asset could make arrangements for the individual’s care and the care of dependent family members up to the value of the transfer unless the evidence submitted indicates that there is no reasonable way that the person can make any of these arrangements. The facts and verification required to determine if the recipient of the transferred asset can make other arrangements to pay or provide the care of the individual, or to provide for the needs of financially-dependent family members, may include the following, if applicable: A copy of the tax return for the preceding calendar year; All earnings pay stubs for the past 12 months; All bank books, stocks, bonds, certificates, life insurance policies (e.g. bank books must include those before and after receipt of the transferred asset); and All documents associated with the proceeds of the transferred asset which will show the value of any purchase of new assets from the sale proceeds of the transferred asset. When the transfer is made to a relative who is a minor, a family member with financial responsibility for the minor must be asked to provide the required facts and verification. (ii) Rebuttal. If the individual rebuts the presumption and shows there is no reasonable way that the recipient of the transferred asset can make arrangements for the individual’s care and the care of dependent family members up to the value of the transfer, AHS will consider whether the individual has exhausted all reasonable efforts to meet their needs from other available sources. This includes whether the individual has exhausted all reasonable efforts to obtain return of the asset transferred, and demonstrated that efforts to obtain return of the asset or adequate compensation would probably not succeed. AHS will take into consideration all excluded and countable assets above the protected resource standard and income above the monthly maintenance needs allowance. Burial funds (§ 29.08(c)) and the individual’s principal place of residence (§ 29.08(a)(1)) will continue to be excluded. Authority of provider to file request for individual. For the purposes of this subsection, a long-term care provider may, with the consent of the individual or the personal representative of the individual, file a request for undue hardship on behalf of the individual. Process for reviewing undue hardship requests Notice of imposition of penalty period (i) The individual will be informed of the right to request an undue hardship exception through written notice of a penalty period of ineligibility for Medicaid coverage of long-term care services and Special Rules for Medicaid Coverage of Long-Term Care Services and Supports – Eligibility and Post Eligibility Part 4 – Page 21 (Sec.25.00, Sub.25.05) supports because of an impermissible asset transfer. (ii) The notice will: Specify the factual and legal basis for the imposition of the penalty, and Explain how the individual may request an undue hardship exception. Timing of exception request. An individual may request an undue hardship exception within 20 days of receiving notification of the transfer penalty. Application requirements. To request an undue hardship exception, the individual must submit documentation supporting their claim of undue hardship. Standard of proof. Undue hardship is established when the individual demonstrates by a preponderance of the evidence that denial of Medicaid coverage of long-term care services and supports will cause actual and not merely possible undue hardship. Nature of available relief. If the individual establishes undue hardship, AHS may waive all or a portion of the penalty period. Notice of decision on request. A notice of decision on the undue hardship exception request will be issued within 10 business days of receipt of all information determined by AHS as needed to evaluate the request. The notice will be in writing and will inform the individual of the right to request a fair hearing to appeal the decision. Notice of decision on eligibility for Medicaid coverage of long-term care services and supports. If no request for an undue hardship exception is received within 20 days after notification of the transfer penalty, or if the request is denied, an eligibility determination will be issued specifying the applicable penalty period. If the individual is receiving Medicaid coverage of long-term care services and supports, the notice will include the date the Medicaid coverage terminates and the right to request a fair hearing and continuing benefits. Exception: Request made within request for fair hearing. When an individual makes a request for an undue hardship exception for the first time at the same time they are requesting a fair hearing, the individual must raise all claims and submit all evidence permitting consideration of the undue hardship exception at least 10 business days in advance of the fair hearing. The undue hardship request must then be referred to AHS for consideration. AHS will then inform the fair hearings entity of its decision on the request within 10 business days of receiving it. Exception: Request made during penalty period on the basis of changed circumstances. A request for an undue hardship exception may be filed at any time during a penalty period if new circumstances leading to undue hardship arise during the duration of the penalty period. If granted, the request will be prospective from the date of the request. Limitation on obligation to pay for long-term care services and supports during penalty period. The state has no obligation to pay for cost of an individual’s long-term care services and supports during the individual’s penalty period unless an undue hardship exception has been granted or the individual Special Rules for Medicaid Coverage of Long-Term Care Services and Supports – Eligibility and Post Eligibility Part 4 – Page 22 (Sec.26.00, Sub.0) prevails at a fair hearing. Extension of time period. The time periods specified in this paragraph (e) may be extended if AHS determines that extenuating circumstances require additional time. [Reserved] [Reserved]