In addition to the Medicaid eligibility requirements, it is not unusual for the procedures of the nursing home to present problems or be a stumbling block to Medicaid eligibility.
For example, the nursing home application should be read carefully by the family members submitting the application. I have seen an application which gave the nursing home the unilateral right to terminate the agreement. Although this is extreme, the signer of the application (it’s not the person going into the nursing home) should sign under a power of attorney with the words “signing in a representative capacity and not individually.” Many nursing homes have a time period for which you must pay privately. As mentioned in prior posts, this is illegal both federally and for the state, but it is a policy which is enforced by the nursing home.
Also, each nursing home has its policy on the amount of deposit requested. The significance of the deposit is that while there is an unused deposit, the applicant cannot receive Medicaid. This point should be kept in mind in the eligibility process.
Nursing home bills should be reviewed monthly. A monthly bill generally invoices for the daily costs in advance of the month and for personal items for the prior month. Therefore, bills should be reviewed carefully in the spenddown process.
As I have discussed, an additional requirement to eligibility other than the financial requirement is an examination by a county nurse which must be undertaken (PAS).
On many occasions, the nursing home will submit the Medicaid application without the assistance of the family or counsel. I have seen situations for which the nursing home has submitted an application without informing the family. The application was cursory and the family was denied timely eligibility.
Finally, it is extremely important to communicate with the financial director of the nursing home so that you are not viewed as adversaries. Having a prior relationship with the nursing home is an asset since it will assist in the admission of a person if the funds available are not substantial.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© May 2009, Post 77
Friday, April 30, 2010
Monday, April 26, 2010
Loss of Eligibility Due to Unnecessary Transfers
As mentioned in prior posts, there is a misconception that the transfer of an excludable resource results in an excludable transfer. This is not the case. For example, if a potential applicant transfers his residence to a dependent child residing in the home, such a transfer would give rise to a penalty. The proper approach would be to stand pat and not make the transfer as Post 14 indicates that such property is excludable.
Several posts have discussed the concept of a child providing care for a parent two years prior to institutionalization when such care allows the applicant to remain at home. The transfer of property to such child is treated as exempt if deemed so by the County Board. (See Posts 6, 23, 34, 37 and 40). The posts stress that the transfer should not be made until application before the Board as the issue of whether one qualifies as a protected transferee is subjective.
Another type of excludable property is joint property held with another (say a sibling). Such property is treated as “inaccessible,” and, therefore, excludable. However, transfer of such property would give rise to a penalty.
With respect to the above issues, reference is made to Post 58 which deals with the transfer of an excludable resource.
If presented with such a problem (transfer of exempt property giving rise to a penalty), communication should be made with the County Board with a request that the property be re-transferred. Technically, once such transfer is made, it would appear that the penalty could not be cured. However, I have been successful on several occasions by requesting that the property be transferred back into its original state without a penalty imposed. The County Boards have been sympathetic to such an approach.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 76
Several posts have discussed the concept of a child providing care for a parent two years prior to institutionalization when such care allows the applicant to remain at home. The transfer of property to such child is treated as exempt if deemed so by the County Board. (See Posts 6, 23, 34, 37 and 40). The posts stress that the transfer should not be made until application before the Board as the issue of whether one qualifies as a protected transferee is subjective.
Another type of excludable property is joint property held with another (say a sibling). Such property is treated as “inaccessible,” and, therefore, excludable. However, transfer of such property would give rise to a penalty.
With respect to the above issues, reference is made to Post 58 which deals with the transfer of an excludable resource.
If presented with such a problem (transfer of exempt property giving rise to a penalty), communication should be made with the County Board with a request that the property be re-transferred. Technically, once such transfer is made, it would appear that the penalty could not be cured. However, I have been successful on several occasions by requesting that the property be transferred back into its original state without a penalty imposed. The County Boards have been sympathetic to such an approach.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 76
Wednesday, April 21, 2010
Admission to Nursing Homes
Generally, admission to a nursing home is preceded by a hospital stay. A family member should immediately request a PAS at the hospital (examination by county nurse) which is a prerequisite to Medicaid eligibility in addition to the financial requirements.
If the potential applicant is in the hospital for more than three days, the person may qualify for Medicare to pay the nursing home stay for a limited period of time. If the individual requires physical rehab or skilled nursing home care, Medicare will pay for the first 20 days in full and for the following 80 days except for a co-pay, which should be covered by the Medigap insurance. Keep in mind that Medicare will pay only if there is the required progress for the individual at the nursing home.
One of the issues for long-term admission to a nursing home is that many nursing homes require a private pay guarantee for a certain number of months. This is illegal for both state and federal purposes, but these rules are not enforced.
After Medicaid coverage ceases, if the individual seeks admission to the nursing home a method of payment must be shown. Therefore, if the person has minimal funds, the Medicaid process should have already commenced.
At such time as long-term care is sought, the family will be presented with an application and other documents. It is recommended that these be reviewed by an attorney.
If the nursing home is of the opinion that there may not be a method of payment (i.e. Medicaid hasn’t been granted or insufficient resources), admission to the nursing home may not be granted.
Of course, family members may be willing to private pay until such time as Medicaid is granted.
If an attorney is assisting the family in the application process, the attorney should feel confident that the family is willing to cooperate and has the sufficient documents required by the County Board.
The application is made at the county where the nursing home is located. However, if application is made from the individual’s residence, the application is to be submitted to the county of residence.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 75
If the potential applicant is in the hospital for more than three days, the person may qualify for Medicare to pay the nursing home stay for a limited period of time. If the individual requires physical rehab or skilled nursing home care, Medicare will pay for the first 20 days in full and for the following 80 days except for a co-pay, which should be covered by the Medigap insurance. Keep in mind that Medicare will pay only if there is the required progress for the individual at the nursing home.
One of the issues for long-term admission to a nursing home is that many nursing homes require a private pay guarantee for a certain number of months. This is illegal for both state and federal purposes, but these rules are not enforced.
After Medicaid coverage ceases, if the individual seeks admission to the nursing home a method of payment must be shown. Therefore, if the person has minimal funds, the Medicaid process should have already commenced.
At such time as long-term care is sought, the family will be presented with an application and other documents. It is recommended that these be reviewed by an attorney.
If the nursing home is of the opinion that there may not be a method of payment (i.e. Medicaid hasn’t been granted or insufficient resources), admission to the nursing home may not be granted.
Of course, family members may be willing to private pay until such time as Medicaid is granted.
If an attorney is assisting the family in the application process, the attorney should feel confident that the family is willing to cooperate and has the sufficient documents required by the County Board.
The application is made at the county where the nursing home is located. However, if application is made from the individual’s residence, the application is to be submitted to the county of residence.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 75
Friday, April 16, 2010
Key Points to Remember in the Computation of the Community Spouse Resource Allowance
The community spouse resource allowance has been discussed in Posts 8, 13, 26, 30, 50 and 60.
Experience has borne the fact that actual computation of the community spouse resource allowance often involves issues that raise some thought.
The following are some points to remember in computing the protected amount:
1. The community spouse resource allowance is only to consider resources that are countable for Medicaid purposes. For example, the primary residence is an excludable resource and is not to be treated as part of the computations.
2. Bank accounts generally provide the balance in the middle of the month. Request the client to get a letter from the bank as of the appropriate date, the first moment of the first day of the month of institutionalization, in reality, is the close of business on the prior day.
3. A certificate of deposit that is due in several weeks arguably is hard to value. That is, it has been my experience that if a family requests the funds without any penalty, that the bank will comply.
4. If there are assets subject to a penalty for withdrawal such as an IRA or an annuity, the withdrawal penalty is not to be considered. With respect to an IRA, it is suggested that the stocks be sold within the IRA (no tax at that point) so that after distribution and income tax, there is not an additional tax due to the necessity to liquidate appreciating assets.
5. Joint property (such as real estate) is to be valued at one-half the fair market value of the real estate. This is different than the treatment for death tax purposes since a fractional interest in real estate is often discounted for fractional interests.
As the above indicates, numerous technical issues arise throughout the Medicaid process, but for purposes of computing the community spouse resource allowance they must be addressed immediately so that eligibility can be projected.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 74
Experience has borne the fact that actual computation of the community spouse resource allowance often involves issues that raise some thought.
The following are some points to remember in computing the protected amount:
1. The community spouse resource allowance is only to consider resources that are countable for Medicaid purposes. For example, the primary residence is an excludable resource and is not to be treated as part of the computations.
2. Bank accounts generally provide the balance in the middle of the month. Request the client to get a letter from the bank as of the appropriate date, the first moment of the first day of the month of institutionalization, in reality, is the close of business on the prior day.
3. A certificate of deposit that is due in several weeks arguably is hard to value. That is, it has been my experience that if a family requests the funds without any penalty, that the bank will comply.
4. If there are assets subject to a penalty for withdrawal such as an IRA or an annuity, the withdrawal penalty is not to be considered. With respect to an IRA, it is suggested that the stocks be sold within the IRA (no tax at that point) so that after distribution and income tax, there is not an additional tax due to the necessity to liquidate appreciating assets.
5. Joint property (such as real estate) is to be valued at one-half the fair market value of the real estate. This is different than the treatment for death tax purposes since a fractional interest in real estate is often discounted for fractional interests.
As the above indicates, numerous technical issues arise throughout the Medicaid process, but for purposes of computing the community spouse resource allowance they must be addressed immediately so that eligibility can be projected.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 74
Wednesday, April 7, 2010
Importance of Reviewing Checking Records as the Date of Eligibility Approaches
Post 4 discusses significance of payment of debts and expenses. This post is to serve as a clarification of some of the points made.
1. The general rule, of course, is that resource eligibility is determined as of the first moment of the first day of each month – N.J.A.C. 10:71-4.1(e). For example, if June eligibility is anticipated, the amount reflected in the account on June 1 is not the proper amount. That is, you are to look to the first moment of the first day of each month. The June 1 balance is not the first moment. In actuality, the balance as of the close of business on May 31 is the proper amount. Do not fall into this trap.
2. Another key rule is that subsequent changes after eligibility during the month do not effect the original determination of eligibility – N.J.A.C. 10:71-4.1(e). This is discussed in the context that the funds are used for appropriate purposes prior to the beginning of the first moment of the first day of the subsequent month. Post 4 discusses possible approaches to reduction of the amount. However, it is important to use the funds for an excludable resource such as a prepaid revocable funeral trust or valid expenses of the home if the individual happens to be married. Very often in this circumstance I have seen clients use the funds for purposes that may be subject to question such as checks drawn to the child or checks drawn to cash. It is important to be conservative in this regard.
3. Another rule set forth is that a check drawn on the account reduces the value of the account whether or not negotiated – N.J.A.C. 10:71-4.1(e)2. It is extremely important to be aware that the records will not show the account being reduced by the first of the month since the check was not negotiated. It has been my practice to keep a copy of the check and submit it to Medicaid for the subsequent month in order to establish eligibility. If such a resource is anticipated such as an income tax refund for a medical reimbursement, it would make sense in advance as to plan the use of such monies. For example, meet with the funeral director in advance and make preliminary arrangements. As indicated in prior posts, expenses relating to the joint home are excludable. However, such expenses should be justified and are subject to the concept of reasonableness.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 73
1. The general rule, of course, is that resource eligibility is determined as of the first moment of the first day of each month – N.J.A.C. 10:71-4.1(e). For example, if June eligibility is anticipated, the amount reflected in the account on June 1 is not the proper amount. That is, you are to look to the first moment of the first day of each month. The June 1 balance is not the first moment. In actuality, the balance as of the close of business on May 31 is the proper amount. Do not fall into this trap.
2. Another key rule is that subsequent changes after eligibility during the month do not effect the original determination of eligibility – N.J.A.C. 10:71-4.1(e). This is discussed in the context that the funds are used for appropriate purposes prior to the beginning of the first moment of the first day of the subsequent month. Post 4 discusses possible approaches to reduction of the amount. However, it is important to use the funds for an excludable resource such as a prepaid revocable funeral trust or valid expenses of the home if the individual happens to be married. Very often in this circumstance I have seen clients use the funds for purposes that may be subject to question such as checks drawn to the child or checks drawn to cash. It is important to be conservative in this regard.
3. Another rule set forth is that a check drawn on the account reduces the value of the account whether or not negotiated – N.J.A.C. 10:71-4.1(e)2. It is extremely important to be aware that the records will not show the account being reduced by the first of the month since the check was not negotiated. It has been my practice to keep a copy of the check and submit it to Medicaid for the subsequent month in order to establish eligibility. If such a resource is anticipated such as an income tax refund for a medical reimbursement, it would make sense in advance as to plan the use of such monies. For example, meet with the funeral director in advance and make preliminary arrangements. As indicated in prior posts, expenses relating to the joint home are excludable. However, such expenses should be justified and are subject to the concept of reasonableness.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 73
Thursday, April 1, 2010
Transfers Made By Potential Applicant After February, 2006
Post 18 discusses some of the steps to take when presented with a situation for which transfers have already occurred. The purpose of this post is to expand some of the concepts presented and provide some new curative ideas. I am very often presented with a situation which indicates that a potential applicant has made numerous transfers prior to retaining me. All transfers during the look-back period are aggregated and are deemed to have been made at the time of application (the time a person would be otherwise eligible for Medicaid but for the transfers). The transfer period commences at that time and the various issues presented by such rule are set forth in Post 15. Perhaps the most onerous rule is that the nursing home does not receive Medicaid nor payments from the individual who has exhausted his or her assets.
1. Perhaps, the first ameliorative approach should be to review the exemptions from the transfer rules. The major exemptions are the transfer of home to designated individuals, transfer to a disabled child, transfer for purpose other than Medicaid and assets transferred used for the benefit of the Medicaid applicant.
2. Another approach would be to wait and hope that the potential applicant does not need nursing home care for 60 months.
3. Another approach would be to evaluate the penalty (divide aggregated transfers by applicable penalty rate at the time of application).
4. The monies could be given back to the potential applicant if the situation is propitious. The ideal situation would be if the applicant had excludable resources for which the funds could be used. That is, if the potential applicant were married and the home needed extensive repairs, the monies could be protected. Similarly, monies could be expended on prepaid funeral funds.
This article should be read in conjunction with Post 18 to give a complete picture of the problem and the issues.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 72
1. Perhaps, the first ameliorative approach should be to review the exemptions from the transfer rules. The major exemptions are the transfer of home to designated individuals, transfer to a disabled child, transfer for purpose other than Medicaid and assets transferred used for the benefit of the Medicaid applicant.
2. Another approach would be to wait and hope that the potential applicant does not need nursing home care for 60 months.
3. Another approach would be to evaluate the penalty (divide aggregated transfers by applicable penalty rate at the time of application).
4. The monies could be given back to the potential applicant if the situation is propitious. The ideal situation would be if the applicant had excludable resources for which the funds could be used. That is, if the potential applicant were married and the home needed extensive repairs, the monies could be protected. Similarly, monies could be expended on prepaid funeral funds.
This article should be read in conjunction with Post 18 to give a complete picture of the problem and the issues.
Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© April 2009, Post 72
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