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Effective: October 1, 2007 |
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19.40.35ar2 - Applying Transfer Penalty (Archive) |
Archived: July 1, 2010 |
This section describes the policy on applying periods of ineligibility based on uncompensated transfers.
Transferred assets returned completely or partially to the client will reduce or eliminate the amount of the transfer and reduce or eliminate the corresponding period of ineligibility for LTC services.
See Multiple Transfers for clients who have overlapping transfer penalty periods.
Who Does the Transfer Penalty Apply To?
GAMC - When Does Transfer Penalty Begin?
MA - When Does Transfer Penalty Begin?
People Initially Requesting Payment of LTC Services.
Enrollees Receiving Payment of LTC Services.
When Is a Cause of Action Referral Needed?
Who Does the Transfer Penalty Apply To?
l MinnesotaCare and GHO:
There are no transfer provisions for MinnesotaCare or GHO.
l GAMC:
Apply the transfer penalty only to the applicant or enrollee.
l MA:
Apply the transfer penalty for a single person to the applicant or enrollee.
If one or both spouses of a married couple have a transfer penalty, apply the penalty as follows:
n One spouse is an applicant/enrollee for MA and both spouses are receiving LTC services: Apply the entire transfer penalty to the MA spouse regardless of who owned the transferred asset.
n One spouse currently an MA enrollee with a transfer penalty and the other spouse applies for MA to receive LTC services: Split any remaining transfer penalty evenly between the spouses.
n Both spouses are applying for MA on the same day and:
m Both spouses are receiving LTC services: Divide the transfer penalty between them equally even if they entered the LTCF on different dates.
m The transfer penalty is not exhausted when one spouse’s LTC services end: Apply the remaining balance to the remaining LTC spouse.
m One spouse is receiving LTC services: Apply the entire transfer penalty to that spouse regardless of who owned the transferred asset.
n Both spouses are MA enrollees with a transfer period split between the two of them and one spouse stops receiving LTC services: Apply the total remainder of transfer penalty to the spouse receiving the LTC services.
l Asset Assessment.
When the community spouse improperly transfers assets after the asset assessment is completed and MA is open for the Long-Term Care Spouse , determine whether to apply a transfer penalty to the LTC spouse.
Note: Although the community spouse’s assets are no longer considered available to the LTC spouse, an improper transfer will result in a transfer penalty unless the community spouse can demonstrate that the transferred assets will never affect the LTC spouse’s ability to obtain or maintain eligibility.
GAMC - When Does Transfer Penalty Begin?
The transfer penalty is applied differently for applicants and enrollees.
l Applicants:
The transfer penalty begins in the first month in which the client could have been eligible for GAMC payment of incurred medical expenses.
Any partial amount of ineligibility is applied to services equal to the penalty amount in the month following the last whole month of ineligibility.
Example:
Lily gave a large sum of money in August to her best friend. She applied for health care in December. Her worker determined that Lily would be on GAMC except that she has a transfer penalty of 4.21 months.
Action:
The first month of the transfer penalty will be December, the first month Lily could have been eligible for GAMC. The transfer penalty will continue through March. Lily will be responsible for the amount of GAMC services up to the partial amount determined in the transfer penalty in April.
l Enrollees:
The transfer penalty begins in the month the transfer was reported or, if not reported, in the month the county agency discovers the transfer.
Close the case for the first of the month for which you can give 10-day notice.
Example:
Giovanni is currently in a transfer penalty for GAMC. While on GAMC his worker discovered, on April 29, Giovanni had given away his mobile home in February. The mobile home was his homestead. His worker determined a transfer penalty of 8.76 months, based on the uncompensated value of the transfer.
Action:
The first month of the transfer will begin in April, because it is the month the worker discovered the transfer. The worker will close eligibility for June 1, which is the first month for which he could give 10-day notice. The transfer penalty will go through November. Giovanni will be responsible for the partial amount of services in December.
Example:
Lester is a GAMC enrollee. He reported transferring his vehicle to his brother in August. The actual transfer took place in June.
Action:
Lester’s transfer penalty begins in August.
If the GAMC client is responsible for a partial penalty amount in the month eligibility begins, contact the MMIS User Services Help Desk. The client must have medical expenses equal to or greater than the partial penalty amount before approval of GAMC.
l Before coding MMIS, e-mail the MMIS User Services Help Desk with:
n The amount of the partial penalty.
n A list of providers owed.
n The amounts the client must pay to each provider.
n Dates of service.
l The client must pay the penalty directly to the providers and must verify the payments before eligibility approval.
l DHS Claims will coordinate billing with the medical providers.
l Providers will bill DHS only for the balances after the penalty is paid.
MA - When Does Transfer Penalty Begin?
The transfer penalty begin date depends on several factors, including:
l When the transfer took place.
l When the transfer was reported or discovered.
l When the client first applied for or requested long-term care services.
l Whether the client was receiving LTC services at the time the transfer was reported or discovered.
People Initially Requesting MA Payment for LTC Services
l Begin the penalty period the month following the month in which the transfer was made if:
n The transfer was made before February 8, 2006, or
n The transfer was made on or after February 8, 2006, and the client applied for or requested MA for LTC services before July 1, 2006.
Example:
Alice has been an MA enrollee since January 2006. On her application she reported making a transfer in December 2005. The worker calculated the transfer penalty of 24.00 months. Alice enters a nursing home on September 5, 2007, and submits a request for payment of LTC services on September 10.
Action:
Because the transfer took place before February 8, 2006, the transfer penalty period began the month after the month of the transfer, or January 2006, and runs through December 2007. Alice is not eligible for payment of LTC services until January 2008.
l Begin the penalty period with the first month for which the client is requesting and, except for the transfer penalty, is eligible for payment of LTC services if:
n The transfer was made on or after February 8, 2006, and
n The client requests MA payment for LTC services on or after July 1, 2006.
Example:
Juan resides in an LTCF and requests payment of MA LTC services on July 15, 2007. He reported a transfer of $10,000 made on March 15. The penalty period is 2.25 months. Juan meets all other eligibility requirements for MA payment of LTC services in July.
Action:
Begin the transfer penalty in July 2007. Juan is ineligible for MA payment of LTC services for July and August, with a partial penalty amount for September.
Example:
Rita entered an LTCF on October 2, 2006. She applies for MA on December 15, 2006, requesting retroactive eligibility back to September. Rita meets all eligibility criteria. Rita reported a transfer of $10,000 made on February 10, 2006. The penalty period is 2.25 months.
Action:
Rita is MA eligible as of September 1. She is ineligible for payment of MA LTC services beginning in October (the month of admission to the LTCF) through November. She is responsible for the partial penalty amount in December 2006.
Example:
Tony applies for MA on August 1, 2006. He is requesting retroactive coverage back to June 1, the month he entered an LTCF. He made a transfer in March 2006 resulting in a transfer penalty of three months.
Action:
Tony is ineligible for MA payment of LTC services for June through August 2006.
Enrollees Receiving MA Payment of LTC Services
l Begin the transfer penalty period the month following the month of the transfer if the transfer was made:
n Before February 8, 2006, or
n On or after February 8, 2006 but was reported or discovered by the county agency before July 1, 2007.
Apply the penalty beginning with the first month for which you can give 10-day notice. Do not apply the transfer penalty retroactively.
Example:
Mae has received MA payment for LTC services since 2002. On June 1, 2007, she reported making an uncompensated transfer on March 1, 2007. The penalty period is 4.25 months.
Action:
The penalty period begins in April 2007, the month after the month in which the transfer was made, and runs through July with a partial penalty for August. Because the transfer was reported before July 1, 2007, the first month to which the penalty can be applied is July 2007. Mae is ineligible for MA payment of LTC services for July with a partial month penalty for August.
l Begin the transfer penalty period for the first month for which you can give 10-day notice if the transfer:
n Was made on or after February 8, 2006, and
n Was reported or discovered by the county agency on or after July 1, 2007.
The enrollee is ineligible for payment of LTC services for the entire calculated penalty period.
Exception: To impose the full penalty period, the agency must send 10-day notice so that the penalty period will begin no later than the month following three full calendar months from the date the transfer was reported to or otherwise discovered by the county agency. If the agency does not send a 10-day notice within the three calendar months, send a 10-day notice as soon as possible to impose any remaining months of the penalty period.
Example:
Burke is receiving MA payment of LTC services. On October 5, 2007, he reports he refused an inheritance on June 15, 2007. The transfer penalty is 15.80 months.
Action:
Provide 10-day notice to begin the penalty period on November 1, 2007. Burke will be ineligible for MA payment of LTC services through January 2009, with a partial penalty for February 2009. He remains eligible for payment of other MA services.
Example:
Matsui receives MA payment of LTC services. He reported making a transfer on November 10, 2007. The agency received all information needed to calculate the penalty period on November 17, 2007, but did not act on the information until March 10, 2008. The penalty period is 5.80 months and must begin no later than March 1, 2008 (three full calendar months after the transfer was discovered).
Action:
Because the agency did not act in time to impose the full penalty period, send 10-day notice to impose the remaining 4.80 months of the penalty period effective April 1. Matsui is ineligible for MA payment of LTC services through July 2008, with a partial penalty for August. He remains eligible for other MA services.
When Is a Cause of Action Referral Needed?
For MA cases only, refer cases to the county attorney to determine if a cause of action against the person who received the transfer is needed.
The maximum amount that can be collected under a cause of action is whichever amount is less of the following:
l The cost of LTC services received during the transfer period.
l The value of the transferred asset.
Make a cause of action referral in the following situations:
l The person who received the transfer actively solicited the transfer with the intent to assist the person to qualify for or retain MA eligibility.
l The person who received the transfer knew or should have known that the transfer was being made to assist the client qualify or maintain MA eligibility.
l Both of the following criteria are met:
n MA was approved and LTC services were paid by the MA program during a transfer period.
n The person who received the transfer knew or should have known that the transfer was being made by a resident of an an LTCF or receiving waiver services at the time of the transfer.
And one of the two criteria below:
n The transfer was not reported timely, which means:
m For the applicant: the applicant, or the applicant’s representative, failed to report a transfer at the time of application
m For the enrollee: the enrollee, or the enrollee’s representative, failed to report a transfer in 10 days.
n The transfer was made on or after July 1, 2005, it was reported timely, and the county was unable to send a 10-day notice for the first month of the transfer penalty.
Example:
Ricky has been an MA enrollee for five years and is currently in LTC. He reported on May 21 that he made a transfer on May 1. His worker determines the transfer penalty period is 1.27 months.
Action:
The transfer penalty begins in June. Ricky will be ineligible for payment of LTC services as of June 1. July is Ricky’s partial month penalty. He will be responsible to pay the partial amount of services, after which MA will begin paying LTC services. The worker must refer the case to the county attorney’s office to determine if a cause of action will be filed, since Ricky received payment of LTC services (June) during a transfer penalty.
Example:
Mr. Smith lives in an LTCF and was approved as an MA enrollee on May 1. On August 25, Mr. Smith reports that he received a $10,000 inheritance from the estate of his deceased brother on August 17. He also reported that he immediately gave the money to his son.
Action:
The worker determines the following:
m Mr. Smith has made an improper transfer because he did not receive adequate compensation for the $10,000 he gave to his son.
m Mr. Smith reported the transfer timely because he reported it within 10 days of receiving the inheritance.
m The transfer penalty is 2.43 months.
m Mr. Smith’s transfer penalty cannot be applied for September because a 10-day notice of termination of LTC services payment cannot be given.
m Mr. Smith’s transfer penalty is applied for October 1.
m A cause of action must be filed for the lesser amount of the uncompensated value of the transfer or the amount of LTC services paid by MA for the month of September.