Determining Transfer Penalty (Archive)

Determine a transfer penalty for uncompensated transfers made during the lookback period or while an enrollee is receiving MA payment of LTC services or GAMC that do not meet a transfer exception.

See Imposing the Transfer Penalty to determine when the penalty period begins.

Reminder:  Basic MA may remain open during a transfer penalty period. Transfer penalty periods for MA result in ineligibility for only MA payment of LTC services. Unlike MA, GAMC does not remain open during a transfer penalty period.

MA.

GAMC.

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MA

Follow these steps to determine a transfer penalty:

1. Calculate the uncompensated amount of all transfers made during the lookback period.

Example:

LuAnn entered an LTCF on December 10, 2009.  She submitted a DHS-3531 on January 4, 2010, requesting MA payment of LTC services effective December 2009. LuAnn’s baseline date for the non-trust transfers’ lookback period is February 8, 2006 through December 9, 2009. She reported transferring assets to her son in the amounts of $16,000 on August 22, 2007, and another $10,000 on November 30, 2009.

Action:

Add the two uncompensated amounts together. ($16,000 + $10,000 = $26,000)

2. Determine the transfer penalty by dividing the uncompensated amount from Step 1 by the MA Statewide Average Payment for a Skilled Nursing Facility (SAPSNF Statewide Average Payment for a Skilled Nursing Facility. The monthly SAPSNF is used to determine the period of ineligibility for long-term care services or GAMC resulting from an improper transfer.). Use the MA SAPSNF in effect in the month the client was found to be otherwise eligible, except due to the transfer penalty, for MA payment of LTC services based on the most recent request for initial or continued MA payment of LTC services. Round the resulting figure to the nearest hundredth.

For purposes of this calculation the most recent request for MA payment of LTC services is any of the following:

l  Health Care Application (DHS-3417).

l  Application for Payment of LTC Services (DHS-3531).

l  MHCP Request for Payment of LTC Services (DHS-3543).

l  Combined Application Form (DHS-5223).

l  MHCP Renewal for People Receiving LTC Services (DHS-2128).

Note:  The SAPSNF is updated annually in July.

Example:

LuAnn’s uncompensated amount is $26,000. The SAPSNF amount in effect on the date of her most recent request (January 4, 2010) for MA payment of LTC services is $5,006 (December 2009).

Action:

$26,000 / $5,006 = 5.196

Round 5.196 to the nearest hundredth: 5.20.

3. Deny eligibility for MA payment of LTC services for the number of months equal to the whole number of the transfer penalty figure.

Example:

LuAnn has a penalty period of 5.20 months. (December 2009 through April 2010; May 2010 is the partial penalty month).

Action:

LuAnn will be ineligible for the MA payment of LTC services for 5 months. Go to Step 4 to determine the partial penalty amount.

4. Eligibility for MA payment of LTC services for the partial penalty amount is limited to any LTC services received over the partial penalty amount. The partial penalty amount is the decimal value of the transfer penalty figure, determined in Step 2, multiplied by the MA SAPSNF. The client is responsible for this amount in the month after the last whole month of the transfer penalty.

l  Add the dollar amount of the partial penalty to the client’s LTC spenddown, waiver obligation or medical spenddown, whichever applies, for the partial month of ineligibility.

l  If a client does not incur LTC services equal to or greater than the total partial penalty, do not carry the penalty over to the next month.

Example:

LuAnn's transfer penalty is for 5 full months with a partial amount of .20. The partial amount is applied in the 6th month. She applied in January 2010 but requested and was found eligible (except due to the transfer penalty) for MA payment of LTC services in December 2009.

Action:

To determine the partial amount multiply the decimal portion of the transfer penalty by the MA SAPSNF. LuAnn’s partial penalty in this instance is $1,001 (.20 X $5,006 MA SAPSNF as of July 2009).

Add the partial amount of $1,001 to the 6th month’s (April 2010) LTC spenddown, waiver obligation or medical spenddown.

5. If the total transfer amount from Step 1 is less than the SAPSNF (also known as a fractional transfer), deny eligibility for MA payment of LTC services in the amount of the transfer.

Example:

Silvio requested MA payment of LTC services on October 1, 2009. He reported an uncompensated transfer of $2,000 in March 2009 and another transfer of $1,000 in May 2009. There were no other transfers during the lookback period.

Action:

The total amount transferred ($3,000) is less than the SAPSNF, the penalty amount is $3,000. Add the fractional transfer amount of $3,000 to the LTC spenddown, waiver obligation or medical spenddown for October 2009.

6. Begin the transfer penalty by following the policy detailed in Imposing the Transfer Penalty.

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GAMC

Follow these steps to determine a transfer penalty period:

1. Total the uncompensated amount of transfers made in the same month.

2. Determine if the total transfers made in a month is considered a fractional transfer by comparing the monthly transfer amount to the GAMC SAPSNF in effect at the time of the most recent application. If it is a fractional transfer go to Step 5.

3. Determine the transfer penalty by dividing the total transfer amount by the GAMC SAPSNF.

l  Use the GAMC SAPSNF amount in effect on the date of either:

n  An applicant’s current application.

n  An enrollee’s application used to set up a current period of GAMC eligibility.

Note:  The SAPSNF is updated annually in July.

l  Round the resulting figure to the nearest hundredth.

Example:

The resulting figure is 14.0589.

Action:

Round 14.0589 to the nearest hundredth:  14.06.

4. Deny GAMC eligibility for the number of months equal to the whole number of the transfer penalty figure. There is no limit to the number of months in a GAMC penalty period.

Example:

Waldo has a penalty period of 12.82 months.

Action:

Waldo will be ineligible for GAMC for 12 months and the partial amount in the 13th month.

5. Deny GAMC eligibility for payment the partial penalty amount. The client is responsible for this amount in the month after the last whole month of the transfer penalty. The partial penalty amount is the truncated result of the decimal value of the transfer penalty figure multiplied by the GAMC SAPSNF.

If the transfer amount is less than the SAPSNF, the penalty amount is the amount transferred.

6. Begin the transfer penalty by following the policy detailed in Imposing the Transfer Penalty.

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