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Institutional Medicaid Financial Eligibility Forum on Aging March 9, 2016

© March 2016 by Pro Seniors, Inc.

Pro Seniors, Inc. 

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Institutional Medicaid Miriam H. Sheline Litigation Director [email protected]

Pro Seniors, Inc. 7162 Reading Road, Suite 1150 Cincinnati, Ohio  45237 513‐345‐4160 2

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What is Medicaid? 1) Medicaid is a joint Federal / State Program.   a) Enacted in 1965 as Title XIX of the Social Security Act b) The goal of Medicaid is to pay for health care for  those individuals who could not otherwise pay it

2) CMS (The Center for Medicare and Medicaid  Services) administers the federal Medicaid  program a) CMS is a subordinate organization within DHHS  (Department of Health and Human Services)  b) Ohio is part of CMS Region 5 – Chicago 3

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Ohio Medicaid 1) ODM (Ohio Department of Medicaid) administers the  Ohio Medicaid Program, as of July, 2013 a) Each county has its own Dept. of Job and Family Services that  administers the Medicaid program at the local level

2) Ohio Medicaid Law: a) Statutes:  Ohio Revised Code (R.C.) §§ 5111.02, et seq. b) Rules:  Ohio Administrative Code (O.A.C.)  §§ 5160:1‐3‐01, et seq.

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Categoric Eligibility 1) Institutional Medicaid eligibility is per individual.   2) The individual (See OAC § 5160:1‐3‐02): a) Must meet Medicaid’s “Limiting Physical Factor” definition to be categorically eligible, i.e. member of a group defined as Medicaid eligible:  Aged (65 years of age or older); or  Blind (as defined by Social Security); or  Disabled (disability is presumed when individual meets a  nursing facility (NF) level of care (LOC)) 

[Note there are other Medicaid eligibility criteria, e.g.  citizenship, that we are not discussing here.]

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Applying For Institutional Medicaid 1) Individuals apply for Medicaid benefits at the CDJFS in  the county in which they reside.   2) The application date is the first month of Medicaid  eligibility. Note: 3 months of retroactive benefits are sometimes available

3) Complete JFS Form 07200:  Request for Cash, Food and  Medical Assistance.  4) Before you fax in the 7200, write “Nursing Home” and  “Resource Assessment” in the blank space at the top of  the form. 9

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http://www.odjfs.state.oh.us/forms

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JFS Form 07200

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Applying For Institutional Medicaid 1) You can also apply on line at  https://odjfsbenefits.ohio.gov/SelfServiceSplash.jsf.   2) Other forms to send: a) Designation of Authorized Representative Form ODM06723 i.

http://medicaid.ohio.gov/RESOURCES/PUBLICATIONS/MEDICAIDFORM S.ASPX

ii.

If no case number, write applicant’s SS number at top of form

b) Financial Power of Attorney, if available c) Hamilton County link for information on the application  process: http://www.hcjfs.org/services/medical‐ assistance/how‐to‐apply‐for‐food‐cash‐and‐medical‐assistance 12

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Medicaid Terminology 1) Medicaid Applicant – is the person applying for Medicaid.   2) IS – is the Institutionalized Spouse of a married couple.   3) CS – is the Community Spouse of a married couple.  13

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Financial Eligibility 1) The IS must meet financial thresholds to  qualify.   a) Resource Eligible   b) Income Eligible 

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Resource Eligibility 1) Resource Assessment   2) Resource Allocation, if applicant is married 3) Resource Spend‐Down, if resources allocated  to the IS exceed $1,500 4) Resource Eligible 15

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Resource Assessment, Allocation and  Spend‐Down 1.  Determine  Snapshot Date;  Begin Resource  Assessment

2.  List All  Resources

5. Finalize  Resource  Assessment

6.  Resource  Allocation For  Married  Applicant

3.  Determine  Excluded  Resources

4.  Determine  Non‐Accessible  Resources

7.  Spend‐Down  to $1,500

8.  Medicaid  Eligible

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1.  Determine  Snapshot Date;  Begin Resource  Assessment

1) Resource Assessment – OAC § 5160:1-3-06.2 "Resource assessment" means the process where the resources of both the IS and the CS are assessed to determine the couple's total countable resources existing at the beginning of the first continuous period of institutionalization. i.

Only one resource assessment is completed per  individual regardless of how often an individual has  been institutionalized or has applied for Medicaid. 17

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1.  Determine  Snapshot Date;  Begin Resource  Assessment

1) Resource Assessment – OAC § 5160:1-3-06.2 b) However ODM only accepts the date of first period of continuous institutionalization from another state and not the resource assessment. A new Ohio resource assessment must be completed. c) Prenuptial and similar agreements shall be disregarded when conducting a resource assessment. See § (D)(12) 18

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1.  Determine  Snapshot Date;  Begin Resource  Assessment

1) Resource Assessment – OAC § 5160:1-3-06.2 d) “Snapshot Date”: The resources and their value are calculated as of the “beginning of the first continuous period of institutionalization.” i.

Not as of the date of application for Medicaid.

e) The resources and their value are captured on the Resource Assessment Worksheet – Form ODM04076.

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1.  Determine  Snapshot Date;  Begin Resource  Assessment

1) Resource Assessment – OAC § 5160:1-3-06.2 f)

"Institutionalized" describes an individual who receives LTC services in a medical institution, a LTC facility, under a HCBS waiver or PACE program.

g) "Continuous period" means being institutionalized for a period of at least thirty consecutive days.

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1.  Determine  Snapshot Date;  Begin Resource  Assessment

1) Resource Assessment – OAC § 5160:1-3-06.2 h) Example: Joe is admitted to a NF April 23rd, 2014. Joe is married and the CS private pays for two years. As their savings dwindle, CS becomes concerned and applies for Medicaid on April 23rd, 2016. What is the Snapshot date? i.

Difficult to remember and document resources as of two years ago.

ii. Expenditures over the past two years may have implications on the resource allocation.

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Resource Assessment, Allocation and  Spend‐Down 1.  Determine  Snapshot Date;  Begin Resource  Assessment

2.  List All  Resources

3.  Determine  Excluded  Resources

4.  Determine  Non‐Accessible  Resources

5. Finalize  Resource  Assessment

6.  Resource  Allocation For  Married  Applicant

7.  Spend‐Down  to $1,500

8.  Medicaid  Eligible

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Form ODM 04076

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2.  List All  Resources

1) List All Resources a) A resource is anything the applicant or the applicant’s spouse owns that can be converted to cash. b) A resource is countable if "it is available and not excluded." c) CDJFS requires documentation of ownership and value of the couple's countable resources. 24

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Resource Assessment, Allocation and  Spend‐Down 1.  Determine  Snapshot Date;  Begin Resource  Assessment

2.  List All  Resources

3.  Determine  Excluded  Resources

4.  Determine  Non‐Accessible  Resources

5. Finalize  Resource  Assessment

6.  Resource  Allocation For  Married  Applicant

7.  Spend‐Down  to $1,500

8.  Medicaid  Resource Eligible

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4.  Determine  Excluded  Resources

Excluded Resources – OAC § 5160:1-3-06.2(C): Resource exclusions for the resource assessment are: 1) One automobile a) Regardless of value for CS b) $4,500 for IS (equity value) See OAC §5160:1-3-05.11

2) Household goods and personal effects 26

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4.  Determine  Excluded  Resources

3) Burial Spaces – OAC § 5160:1‐3‐05.7: a) The value of any burial space for the individual, spouse, or any other member of the immediate family is excluded. b) "Burial space", means a burial plot, gravesite, crypt, mausoleum, casket, urn, niche. The term also includes a contract for care and maintenance of the gravesite and reasonable improvements, including but not limited to vaults, headstones, markers, or plaques, burial containers (e.g., for caskets) and arrangements for the opening and closing of the gravesite.

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4.  Determine  Excluded  Resources

3) Burial Spaces – OAC § 5160:1-3-05.7: c) An individual's immediate family includes his parents, including adoptive parents, minor or adult children, including adoptive and stepchildren, siblings, including adoptive and stepsiblings and the spouses of the immediate family members. d) "Agreement", for the purpose of this rule, means a contract with a burial provider for a burial space held for the eligible individual or a member of his/her immediate family. See RC § 1721.211 – Preneed cemetery merchandise and services contract.

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4.  Determine  Excluded  Resources

4) Preneed Funeral Contracts– OAC § 5160:1-3-05.6: a)

Irrevocable preneed funeral contracts for IS & CS are excluded.

b)

The ownership of a life insurance policy may be irrevocably changed to a financial institution or a provider of funeral services for the specific use as an irrevocable preneed funeral contract for the individual and/or spouse.

c)

The preneed funeral contract must state that funds in excess of the costs will be paid to the deceased individual's estate. Probate court must decide how these funds are dispersed.

d)

Unless funded by an insurance policy, the funds paid for a preneed funeral contract are held by a preneed funeral contract trust. See RC § 4717.31, et seq. 29

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4.  Determine  Excluded  Resources

5) Life Insurance – OAC § 5160:1‐3‐05.12: a) The total Cash Surrender Value (CSV) of all life  insurance policies for an individual is excluded if  the total face value of the policies is equal to or  less than $1,500. b) If the total face value of all life insurance policies  for any one individual is more than $1,500, then  the total CSV of all the policies for that individual  is counted toward the applicable resource limit. 30

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4.  Determine  Excluded  Resources

6) The Homestead – OAC § 5160:1‐3‐05.13: a) “Home” means any contiguous property an  individual has an ownership interest in and is the  individual's principal place of residence. b) “Principal place of residence” means the  dwelling the individual considers her principal  home to which, if absent, she intends to return  and can be real or personal property, fixed or  mobile, and located on land or water. 31

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4.  Determine  Excluded  Resources

6) The Homestead – OAC § 5160:1‐3‐05.13: c) Only one place can be the principal place of  residence. d) A temporary absence from the home is not a  problem so long as the individual has not  established permanent residence elsewhere. e) The CDJFS must obtain a signed statement,  declaring the principal place of residence, if the  individual resides in more than one place.

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4.  Determine  Excluded  Resources

6) The Homestead – OAC § 5160:1‐3‐05.13: f) The value of the home is excluded if: i.

It is the principal place of residence of the IS or CS, or another specified family member;

ii. The deed to the home is in the name of the IS or CS or a revocable trust for either; and iii. The individual's equity interest in the home does not exceed the home equity limit. 33

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4.  Determine  Excluded  Resources

6) The Homestead – OAC § 5160:1‐3‐05.13: g) The home is no longer considered to be the IS’s  principal place of residence if the IS has resided  in a nursing facility for a continuous period of 13  months. h) The 13 month home exclusion period begins the  first month in which the individual is both eligible  for Medicaid and residing in a nursing facility. 34

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3.  Determine  Excluded  Resources

6) The Homestead – OAC § 5160:1‐3‐05.13: i) If a 13 month home exclusion period is  interrupted either because the individual has  resided in a NF for less than 13 months or the  individual is ineligible for Medicaid for any  month, then a new 13 month home exclusion  period must begin.

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3.  Determine  Excluded  Resources

6) The Homestead – OAC § 5160:1‐3‐05.13: j) However, even after 13 months, the home is not  a countable resource if any of the following  individuals are residing in the home: • •

The CS The IS’s child who is o Under age 21 or o Blind or disabled

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3.  Determine  Excluded  Resources

6) The Homestead – OAC § 5160:1‐3‐05.13: •

The IS's child who is age 65 or older and is financially dependent upon the IS for housing.

•

The IS's sibling who has a verified equity and ownership interest in the home and has resided in the home for at least one year immediately before the date the individual was admitted to the nursing facility.

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3.  Determine  Excluded  Resources

6) The Homestead – OAC § 5160:1‐3‐05.13: k) Even though the home is considered the IS’s  principal place of residence, the value of the  home is not excluded if the individual's equity  interest in the home exceeds the home equity  limit of $552,000 (2016). l) The IS can use a reverse mortgage or home  equity loan to reduce her total equity interest in  the home below the home equity limit. 38

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3.  Determine  Excluded  Resources

6) The Homestead – OAC § 5160:1‐3‐05.13: m) The home equity limit does not apply to an IS if  any of the following persons are lawfully residing  in the home: • •

The CS The IS’s child who is o Under age 21 or o Blind or disabled

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3.  Determine  Excluded  Resources

6) The Homestead – OAC § 5160:1‐3‐05.13: n) The IS will not be subject to a denial of benefits  resulting from home equity in excess of the  home equity limit if the denial or termination will  result in an undue hardship. 

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3.  Determine  Excluded  Resources

Excluded Resources Summary 1) 2) 3) 4) 5) 6)

Automobile Household Goods Burial Spaces Preneed Funeral Contracts Life Insurance Real or Personal Property Essential to Self-Supportgenerally limited to $6,000 in equity or has a Minimum 6% return for business property. See OAC § 5160:1-3-05.19 41

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3.  Determine  Excluded  Resources

Excluded Resources Summary 7) Homestead excluded for 13 months if a) Principal place of residence of the IS b) Home deeded in name of IS, CS, or revocable trust for either c) Home equity limit not exceeded or CS or minor or disabled child lives there, or undue hardship exists 8) Homestead excluded after 13 months if CS, minor or disabled child or dependent child aged 65 lives there, or a sibling owner lived there one year prior to IS’s NF placement.42

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3.  Determine  Excluded  Resources

Property No Longer the Principal Place of  Residence – OAC § 5160:1‐3‐05.15 1) Real estate still remains excluded if: a) Listed with real estate agent at 13 month expiration b) At sale price not greater than auditor’s market value c) Cannot refuse offer of 90% of auditor’s market value

2) When sold, Medicaid eligibility is re‐determined 43

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3.  Determine  Excluded  Resources

Property No Longer the Principal Place of  Residence – OAC § 5160:1‐3‐05.15 3) If not sold within six months of listing, it is no longer  excluded, unless seller establishes good cause per  OAC § 5160:1‐3‐05.1 4) Must produce documentation from two different  types of knowledgeable sources that an attribute of  the property or market is preventing the sale 44

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3.  Determine  Excluded  Resources

Life Estate in Property No Longer the Principal  Place of Residence – OAC § 5160:1‐3‐05.17 1) If the IS has the right to transfer the life estate, it is a countable resource 2) The value of the life estate is the equity value of the property times the life estate table product that corresponds to the life estate owner's age 3) IS must establish good cause per OAC § 5160:1-305.1(C)(6) for failure to liquidate the property

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3.  Determine  Excluded  Resources

OWNER’S AGE 0 1 2 . . . . 89 90 91 92 93

LIFE ESTATE 0.97188 0.98988 0.99017 . . . . 0.29526 0.28221 0.26955 0.25771 0.24692

REMAINDER 0.02812 0.01012 0.00983 . . . . 0.70474 0.71779 0.73045 0.74229 0.75308

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3.  Determine  Excluded  Resources

Life Estate in Property Of Another Life estate purchased in another’s property is excluded if live there for 1 year. OAC § 5160:1-3-05.15(H)

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Resource Assessment, Allocation and  Spend‐Down 1.  Determine  Snapshot Date;  Begin Resource  Assessment

2.  List All  Resources

5. Finalize  Resource  Assessment

6.  Resource  Allocation For  Married  Applicant

3.  Determine  Excluded  Resources

7.  Spend‐Down  to $1,500

4.  Determine  Non‐Accessible  Resources

8.  Medicaid  Eligible

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4.  Determine  Non‐Accessible  Resources

1) Non‐Accessible Resources – a) A resource is anything the applicant or the applicant’s spouse owns that can be converted to cash. b) Difference between non-accessible and non-saleable. Some resources cannot be immediately converted to cash, but the individual must make a valid attempt to sell. i.

No buyer for the empty lot in the Michigan woods or the Florida time-share.

ii. 2nd home tied up in foreclosure.

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4.  Determine  Non‐Accessible  Resources

1) Non‐accessible 2 different issues: a.  Requires legal action to access b.  Individual cannot access due to physical  or mental impairment

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4.  Determine  Non‐Accessible  Resources

Shared Ownership– OAC § 5160:1‐3‐05.1 (C)(4)&(7) 1) If co-owner is spouse, parent or child of IS, then IS presumed able to sell unless rebutted 2) If co-owner blocks sale, IS must take legal action 3) If owner cannot be located, the cost of a legal action is prohibitive or the individual was unsuccessful in a legal action, then the resource is not counted 51

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4.  Determine  Non‐Accessible  Resources

Shared Ownership– OAC § 5160:1‐3‐05.1 (C)(4)&(7) 4) If IS unable to access or liquidate property, then IS shall be referred to legal aid services or the prosecuting attorney's office to determine if they can assist 5) A written response to the referral is required 6) If the cost of a legal action is prohibitive, then the resource is not counted 52

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4.  Determine  Non‐Accessible  Resources

Non‐Accessible Resources – Physical or Mental  Impairment OAC § 5160:1‐2‐01(F)(5)  When the physical or mental impairment  substantially limits the individual's ability to access  verifications.  Determine if another person is available to assist  with obtaining verifications, e.g., FPOA or  guardian. 53

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4.  Determine  Non‐Accessible  Resources

1) Non‐Accessible Resources/disability ii. If no person is available to assist •

Refer the case to CDJFS's legal counsel and request  evaluation whether the matter should be referred to  the probate court, adult protective services, etc.

•

Note in the case record that verifications, resources  or income are not available and must not be  considered a disqualifying factor until a means of  access to those items is obtained or established.

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4.  Determine  Non‐Accessible  Resources

1) Non‐Accessible Resources/disability •

Determine eligibility without considering eligibility factors for which verification cannot be obtained or means of self-support that cannot be accessed because of the physical or mental impairment. Use the best evidence available without delaying the determination of eligibility.

•

Re-determine eligibility once a means of access to verifications or means of self-support is obtained or established. 55

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Resource Assessment, Allocation and  Spend‐Down 1.  Determine  Snapshot Date;  Begin Resource  Assessment

2.  List All  Resources

3.  Determine  Excluded  Resources

4.  Determine  Non‐Accessible  Resources

5. Finalize  Resource  Assessment

6.  Resource  Allocation For  Married  Applicant

7.  Spend‐Down  to $1,500

8.  Medicaid  Eligible

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5. Finalize  Resource  Assessment

Retirement Accounts as Resources – OAC § 5160:1‐3‐03.10 1) Retirement and Income Supplementing Accounts  (RISAs) A are countable resources if the IS or CS has  an ownership interest in the RISA and the legal  ability to convert it to cash.

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5. Finalize  Resource  Assessment

RISAs include : 1) public and private pension, disability, or retirement plans; 2) defined benefit employer pension plans, 3) profit sharing pension plans, 403(b) pension plans, money purchase pension plans, employee stock ownership plans, 4)

individual retirement accounts (IRA); KEOGH pension plans, Roth IRAs, simplified employee pension plans (SEP-IRA), and 401k pension plans;

5)

or any other retirement plans 58

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Resource Assessment, Allocation and  Spend‐Down 1.  Determine  Snapshot Date;  Begin Resource  Assessment

2.  List All  Resources

3.  Determine  Excluded  Resources

4.  Determine  Non‐Accessible  Resources

5. Finalize  Resource  Assessment

6.  Resource  Allocation for  Married  Applicant

7.  Spend‐Down to $1,500

8.  Medicaid  Eligible

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6.  Resource  Allocation for  Married  Applicant

Resource Budgeting Methodology for  Institutionalized Individuals with a Spouse In the  Community – OAC § 5160:1‐3‐06.4 1) Protect a portion of the combined countable resources  for the community spouse 2) ODM 04076 ‐ Resource Assessment Worksheet   http://medicaid.ohio.gov/RESOURCES/PUBLICATIONS/MEDICAIDFORMS.ASPX 60

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Form ODM04077

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6.  Resource  Allocation for  Married  Applicant

Resource Budgeting Methodology – OAC § 5160:1‐3‐06.4 1) The Community Spouse Resource Allowance (CSRA) 2) Minimum is $23,844 (2016) 3) Maximum is $119,220 (2016) 4) CSRA amounts are indexed to the CPI and change  annually 62

Pro Seniors, Inc. 

Medicaid Resource Allocation ‐ 2016

Institutionalized Spouse

$419,220 72% 28%

$300,000

www.ProSeniors.org

Community Spouse

Max Allocation

$119,220

$119,220

$238,440 50% 50%

Max Allocation

$119,220

$50,000

$100,000 50% 50%

50%

$50,000

$23,844

$47,688 50% 50%

50% or Minimum

$23,844

$30,000 78%

50% or Minimum

$23,844

22%

$25,344 94%

100% of 1st

$23,844

6%

$6,156

$ 1,500

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Pro Seniors, Inc. 

www.ProSeniors.org

6.  Resource  Allocation for  Married  Applicant

Transfer of Resources for Institutionalized  Spouses with a Spouse in the Community – OAC § 5160:1‐3‐06.5 1) The institutionalized spouse is entitled to a 12 month period of protected eligibility, to give time to complete any necessary resource transfers from IS to CS once eligibility is established. 2) After 12 months, IS eligibility is determined counting all of the resources in the IS’s name. 64

Pro Seniors, Inc. 

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6.  Resource  Allocation for  Married  Applicant

Transfer of Resources for IS with a CS – OAC § 5160:1‐3‐06.5 1) If the IS comes into additional resources, during a period of protected eligibility, then 2) The IS may transfer to the CS the amount which will bring the CS’s resources up to the determined spousal resource allowance.

65

Pro Seniors, Inc. 

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6.  Resource  Allocation for  Married  Applicant

Administrative Agency Responsibilities – OAC § 5160:1‐2‐01(L)(1)(b) 1) Retroactive eligibility for medical assistance is effective no later than the first day of the 3rd month before the month of application, if the individual: a) Received Medicaid covered services during that period; and b) Would have been eligible for medical assistance at the time the services were provided if an application had been made at that time,

66

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www.ProSeniors.org

6.  Resource  Allocation for  Married  Applicant

Reluctant Spouse Rule – OAC § 5160:1‐3‐06.4(D)&(E) 1) The CS will not cooperate to make resources  available to the IS after a resource assessment  2) The CS must be given notice of the duty to  cooperate in making resources available to the IS. 3) IS must assign support rights to the State 67

Pro Seniors, Inc. 

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6.  Resource  Allocation for  Married  Applicant

Reluctant Spouse Rule – OAC § 5160:1‐3‐06.4(D)&(E) 3) If the CS refuses to cooperate, or ignores notice,  Medicaid must be approved, provided that all other  eligibility factors and conditions have been met  4) The case referred to the state attorney general's office,  to attempt to recover funds from the CS for any  Medicaid payments up to the IS’s allocated share of the  couple's assets

Pro Seniors, Inc. 

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6.  Resource  Allocation for  Married  Applicant

A Court Order – OAC § 5160:1‐3‐06.4(C)(3)(c) 1) The allocation of resources specified in a current  court order which is more than the CSRA  supersedes the CDJFS resource allocation  2) The CS’s CSRA is the amount of resources allocated  to her in the court order 69

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Pro Seniors, Inc. 

www.ProSeniors.org

Resource Assessment, Allocation and  Spend‐Down 1.  Determine  Snapshot Date;  Begin Resource  Assessment

2.  List All  Resources

5. Finalize  Resource  Assessment

6.  Resource  Allocation for  Married  Applicant

3.  Determine  Excluded  Resources

7.  Spend‐Down to $1,500

4.  Determine  Non‐Accessible  Resources

8.  Medicaid  Eligible

70

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7.  Spend‐Down to $1,500

Resource Budgeting Methodology – OAC § 5160:1‐3‐06.4(D) Being resource eligible on the last day of the  month means resource eligible for the entire  month.

71

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7.  Spend‐Down to $1,500

Countable resources of the IS are to be used only for  the benefit of the IS and/or CS.  (See OAC § 5160:1‐3‐ 06.4(C)(4) and OAC § 5160:1‐3‐07.2(G)). a) b) c) d)

Buy things for either spouse Pay legal obligations of either spouse Put the money into an excluded resource See a Medicaid planning attorney

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Pro Seniors, Inc. 

www.ProSeniors.org

Example ‐ Resources House Car Household Goods IRA Savings Inheritance Life Insurance CSV Countable Resources

$180,000 $  20,000 $    5,000 $ 50,000 $ 10,000 $ 90,000 $ 10,000 $160,000 73

Pro Seniors, Inc. 

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Example ‐ Spend‐Down Total Countable Assets Less:  CSRA Resources Allocated to IS

$160,000 $  80,000 $  80,000

Less:    Burial Spaces & Pre‐Need Funeral  Cost to Cash‐In IRA  Credit Card Pay Off Home Repairs        Automobile Loan Pay Off Furniture / Clothes for IS     Mortgage Loan Pay Off  Caribbean Cruise for CS

$   18,000 $     2,500 $   10,000 $     5,000 $   20,000 $     1,000 $   14,500 $     8,000

IS resource limit

$   1,500  74

Pro Seniors, Inc. 

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CSRA Case Facts 1) Joan Jett suffers from severe dementia and permanently entered a nursing facility on March 1, 2015. Joan owns her home worth $75,000 free and clear and has $10,000 in a checking account. She owns a 1990 Honda Civic. 2) Joan’s husband, Joe, continues to live in the home, although the deed is in Joan’s name. 3) Joan and Joe also have IRAs totaling $20,000. 4) Instead of a Civic, Joan owns a 2014 Porsche and $100,000 in P&G stock. 5) Joe is still working and the $100,000 in P&G stock is in a 401K which he can only access if he retires or quits. 75

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Pro Seniors, Inc. 

www.ProSeniors.org

Resource Assessment, Allocation and  Spend‐Down 1.  Determine  Snapshot Date;  Begin Resource  Assessment

2.  List All  Resources

3.  Determine  Excluded  Resources

4.  Determine  Non‐Accessible  Resources

5. Finalize  Resource  Assessment

6.  Resource  Allocation for  Married  Applicant

7.  Spend‐Down to $1,500

8.  Medicaid  Eligible

76

Pro Seniors, Inc. 

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Asset Transfers

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Pro Seniors, Inc. 

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Asset Transfers ‐ Introduction 1) Asset transfers are asked about at the initial  application for Medicaid a) Have there been any asset transfers in the last five  years immediately prior to applying for Medicaid? 

2) You sign your response under penalty of perjury 3) Medicaid Fraud:  RC § 2913.40 a) No person shall knowingly make or cause to be made  a false or misleading statement or representation for  use in obtaining reimbursement from the Medicaid  program.  78

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www.ProSeniors.org

Asset Transfers Defined 1) Asset transfers are either proper or improper.  See OAC § 5160:1‐3‐07.2. 2) Improper transfers trigger a Medicaid penalty. 3) An improper transfer is a) a transfer on or any time after the look‐back date of  a legal or equitable interest in a resource for less  than fair market value for the purpose of qualifying  for Medicaid, a greater amount of Medicaid, or for  the purpose of avoiding the utilization of the  resource to meet medical needs or other living  expenses. 79

Pro Seniors, Inc. 

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Asset Transfers Defined 4) The following types of transfers are presumed to  be improper transfers. OAC § 5160:1‐3‐07.2(C). a) Any transfer that reduces the individual's resources  and brings the value of their remaining resources  within the resource limitation. b) Any transfer that has the effect of safeguarding  future eligibility by divesting the individual of  property that could otherwise be sold and the  proceeds then used to pay for support and medical  care for the individual. 80

Pro Seniors, Inc. 

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Asset Transfers Defined c) Any transfer of income‐producing real property; or d) Any transfer by an individual of an excluded home  whether prior to or after the Medicaid application  date. e) A transfer for love and consideration is not  considered a transfer for fair market value.

5) To rebut the presumption, need full written  accounting and documentation of transfer 81

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Pro Seniors, Inc. 

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Asset Transfers – Look‐Back Period 1) Baseline Date First date when the individual is both institutionalized  and has applied for Medicaid.

2) Look‐Back Date 60 months prior to the baseline date.  The earliest date  that an asset transfer can be deemed improper. 

3) Look‐Back Period Begins with the baseline date and ends with the look‐ back date. 82

Pro Seniors, Inc. 

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Improper Transfer Penalty 1) If an improper transfer occurred within the look‐ back period, then the applicant is penalized. 2) The penalty is a restricted period of Medicaid  coverage. 3) During this restricted period, there will be no NF  service coverage nor HCBS coverage  (e.g., PASSPORT). a) There will be Medicaid coverage for other services  such as medications, hospital and home health. 83

Pro Seniors, Inc. 

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Improper Transfer Penalty 4) The length of the penalty period depends on the  value of the improper transfer. 5) The months of restricted coverage is calculated  by adding the values of all improper transfers  and dividing that result by $6,327 (effective  9/1/14), the average cost of monthly NF care in  Ohio. 6) There is no cap on the length of the penalty  period. 84

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Pro Seniors, Inc. 

www.ProSeniors.org

Improper Transfer Penalty 7) An improper transfer of $63,270 results in a 10  month period of restricted Medicaid coverage 8) The beginning date of a restricted Medicaid  coverage period is a) The date on which the individual is eligible for  Medicaid and would otherwise be receiving long  term care services but for the application of the  penalty. 85

Pro Seniors, Inc. 

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Curing An Improper Transfer 1) When all assets transferred are returned to the  individual, no penalty for transferring assets can  be assessed. 2) When only part of the asset or its equivalent  value is returned, a restricted Medicaid coverage  period cannot be modified

86

Pro Seniors, Inc. 

www.ProSeniors.org

Paying The Restricted  Medicaid Coverage Debt 1) Any unpaid NF costs incurred while the  individual was in a period of restricted coverage  as the result of an improper transfer of assets,  can be used as a UPME after the period of  restricted coverage has expired.   See OAC § 5160:1‐3‐04.1(E)(2)(d). 2) "Unpaid Past Medical Expense" (UPME) means a  medical bill or a portion of a medical bill that  may be applied in the spend‐down process. 87

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Pro Seniors, Inc. 

www.ProSeniors.org

Transfer of Assets Timeline JAN

FEB MAR JAN

2011

2012

FEB

JAN

FEB

2013

JAN 2014

FEB

JAN

FEB

2015

JAN

FEB

2016

Mr. R Enters NF February 1, 2016

House $63,270 Gift 1/2011 House $63,270 Gift March/2011

House $63,270 Gift Feb. 2012

1st Cont. Period of Institutionalization

Baseline Date

Look‐Back Date Look‐Back Period

Institutionalized &  Applied 4 M/d 88

Pro Seniors, Inc. 

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Proper Asset Transfers/Improper  Transfer Exclusions 1) OAC § 5160:1‐3‐07.2 Asset Transfers 2) Asset transfers are either proper or improper. 3) Proper transfers do not trigger a Medicaid  penalty. 

89

Pro Seniors, Inc. 

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Improper Transfer Exclusions‐Home Under OAC §5160:1‐3‐07.2(E)(1)The IS may transfer  the home, that is still considered the principal place  of residence, to:   a) The CS, provided: i.

The transfer is for the sole benefit of the CS; and

ii. The CS does not subsequently transfer the home for less than fair market value; and iii. Any transfer of the home by the CS on or after the look-back date shall be reviewed under the transfer of resources provisions in this rule. 90

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Improper Transfer Exclusions b) The IS’s child under the age of twenty‐one; c) The IS’s child age twenty‐one or over who is blind or  permanently and totally disabled as defined in OAC  § 5101:1‐3. d) The sibling equity exclusion:  The IS’s sibling who has  an equity interest (must be a documented, legal  interest) in the home and was residing in the home  for at least one year immediately before the  individual became institutionalized. 91

Pro Seniors, Inc. 

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Improper Transfer Exclusions e) The adult child caretaker who i.

was residing in the home for at least 2 years immediately before the date the IS becomes institutionalized, and

ii. who provided care to the IS which permitted the IS to reside at home, rather than in an institution or facility iii. An ODM 03697 "Level of Care (LOC) Assessment" must be completed to determine if the IS would have required institutionalization from the beginning & throughout the 2-year period if the adult child had not provided personal care. 92

Pro Seniors, Inc. 

www.ProSeniors.org

Improper Transfer Exclusions The IS may transfer resources other than a home, as  a gift:  See OAC § 5160:1‐3‐07.2(E)(2). a) To CS or to another for the sole benefit of the CS. b) To the IS’s child (of any age), or to a trust established solely for the benefit of the IS’s child, who is blind or permanently and totally disabled as defined in OAC § 5101:1-3. c) To a trust for the sole benefit of the individual under 65 years of age who is blind or permanently and totally disabled as defined in OAC § 5101:1-3.

“Transfer for sole benefit” means the asset cannot benefit anyone else and the trustee must be required to use the resource for the beneficiary during that individual’s life expectancy. 93

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Pro Seniors, Inc. 

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Defending An Improper Transfer 1) An improper transfer is a) a transfer b) on or any time after the look‐back date  c) of a legal or equitable interest in a resource  d) for less than fair market value e) for the purpose of qualifying for Medicaid.

95

Pro Seniors, Inc. 

www.ProSeniors.org

Defending An Improper Transfer 1) Not a transfer a) Transfers by FPOA i.

Not authorized by FPOA; a theft

b) Transfers by joint account holder i.

Not a transfer authorized by the client

2) Was transferred for fair market value (FMV) a) Money paid for services rendered are FMV i.

Written contracts are not required 96

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Pro Seniors, Inc. 

www.ProSeniors.org

Defending An Improper Transfer b) Court ordered transfer (child sues parent for  services rendered) c) Court defined transfer (parent sues child for money  loaned – not gifted) d) House sold for less than 90% of auditor’s appraised  value.   e) Automobile sold for less than the NADA listed trade‐ in value, average condition.  See OAC § 5160:1‐3‐ 05.11(E)

97

Pro Seniors, Inc. 

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Defending An Improper Transfer 3) Yes, it was a gift, but not given for the purpose  of qualifying for Medicaid a) Grandma’s special occasion gifts b) Tithing (gifting pattern) c) Traumatic onset of disability d) Diagnosis of a previously undetected disabling  condition

98

Pro Seniors, Inc. 

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Improper Transfer Undue Hardship 1) The individual, otherwise eligible for medical  assistance, will not be subject to restricted  Medicaid coverage resulting from an improper  transfer if restricted Medicaid coverage will  result in an undue hardship.  See OAC § 5160:1‐3‐07.2(N). 

99

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Pro Seniors, Inc. 

www.ProSeniors.org

Improper Transfer Undue Hardship 2) An undue hardship exists when application of  the restricted Medicaid coverage would: a) deprive the individual of medical care such that the  individual's health or life would be endangered; or b) deprive the individual of food, clothing, shelter, or  other necessities of life. 3)  Note:  There are other Medicaid rules which use this  same definition of undue hardship such as the home  equity limit (OAC § 5160:1‐3‐05.13(E)), resource  eligibility (OAC § 5160:1‐3‐06.4(C)(4)(b)(ii)) 100

Pro Seniors, Inc. 

www.ProSeniors.org

Improper Transfer Undue Hardship 4) An undue hardship exemption may be requested  by the applicant, the authorized representative,  or the nursing facility (with consent). 5) Undue hardship must be requested in writing. See ODM Form 07140 ‐ Availability of Hardship  Exemption.

6) Must show no alternative income or resource  available to  provide medical care, food,  clothing, shelter or other necessities of life.  101

Pro Seniors, Inc. 

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Improper Transfer Undue Hardship 7) The applicant must document that a good faith  attempt was made to recover the transferred  asset or document recovery was cost prohibitive 8) And that individual cooperated in any attempt to  recover the asset 9) The facility must also document that it made a  good faith effort to pursue reasonable means to  recover the transferred asset or fmv, unless  recovery was cost prohibitive.  102

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Pro Seniors, Inc. 

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Improper Transfer Undue Hardship‐ nursing home  9) The individual must document a planned NF  discharge resulting from the imposition of a  restricted Medicaid coverage period. 10) The individual must first exhaust all  administrative remedies to challenge the  planned discharge.

103

Pro Seniors, Inc. 

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Asset Transfers Summary 1) Improper transfers  a) For less than FMV b) Within 60 months of Medicaid application c) Medicaid penalty calculated and assessed

2) Defenses to presumption of improper transfer a) Not a transfer (FPOA theft) b) FMV transfer c) Transfer purpose not for Medicaid eligibility 104

Pro Seniors, Inc. 

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Asset Transfers Summary 3) Improper transfer exclusions  a) Non‐home:  CS, disabled child, special needs trust b) Home:  CS, minor or disabled child, sibling equity  exclusion,  adult child caretaker exclusion

4) The transfer is improper a) Cure transfer by transferring back b) Begin penalty period with PASSPORT c) Prove undue hardship 105

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Questions

106

Pro Seniors, Inc. 

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Financial Eligibility 1) The IS must meet financial thresholds to  qualify.   a) Resource Eligible   b) Income Eligible 

107

Pro Seniors, Inc. 

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Income Eligibility 1) The IS’s countable income must be at or  below the special income level of 300% of  SSI ($2199 in 2016).  However an individual  can spend down by deducting the NF cost of  care each month to be Medicaid “income  eligible.”  (Note:  This may change 7/1/2016) 2) The CS’s income is not included in this  calculation. 108

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www.ProSeniors.org

History of 209(b)  In 1972, Congress expanded the Medicaid program to 

cover individuals who are aged, blind, or disabled  In the law that contained this change, section 209 says 

that states must provide Medicaid to anyone who  received Supplemental Security Income  Paragraph (b) of section 209 says that states could choose 

to be more restrictive – to have lower income or resource  limits States that chose this 209(b) option are required to allow individuals to “Spend Down” to the more restrictive income limit The law also put in place some restrictions around “incurred” expenses for Spend Down

o

o

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Pro Seniors, Inc. 

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The Other Options States who chose not to go the 209(b) route had two options: SSI Criteria

• The State covers everyone who meets the criteria for Supplemental Security Income (SSI) • The state makes its own decision whether the person meets the criteria for SSI

1634 • The State accepts Social Security Administration’s decision o In Ohio, OOD’s decision that the person is eligible for SSI • SSI beneficiaries are automatically enrolled on Medicaid • The State does not reconsider the determination

OOD ‐ Opportunities for Ohioans with Disabilities

Pro Seniors, Inc. 

110

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What Are We Proposing to Build? We will still have MAGI groups, and anyone who gets SSI will  be automatically enrolled on Medicaid We will have a “lookalike” category for folks who are 65+, blind, or disabled but who do not have SSI. We will still have Medicaid Buy-In for Workers with Disabilities (MBIWD) for folks who are working with disabilities

No one will be able to Spend Down, but they can deposit excess income in a Miller Trust to become eligible for Medicaid coverage

Individuals who need NF/ICF (Nursing Facility/ Intermediate Care Facility) care or services under an existing waiver will have an income limit of 300% FBR (Federal Benefit Rate)  300% FBR is about 225% FPL (For 2015, this amount is $2,199)

Individuals with Severe and Persistent Mental Illness (SPMI) will be covered under a new state plan option with an income cap of 300% FBR

111

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What is Income? 1) Income is cash, in‐kind income, or something  of value which is received, available, and  attributable to an individual. 2) Income includes earned income and  unearned income. 3) Earned income consists of wages and net  earnings from employment or self‐ employment.  112

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Unearned Income 1) Unearned income is all income that is not  wages or net earnings from self‐employment.  All income which does not meet the definition  of earned income is unearned income. 2) The IS must actually receive the payment in  order to have it counted as income.  3) However, if receipt is deferred , it will be  counted in the month it could have been  received. 113

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Potential Income 1) The IS must pursue collection of all  potential  income. 2) The reason for the IS’s failure to pursue  income is presumed to be that s/he wants to  make herself/himself eligible for medical  assistance.  114

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Income Exclusions 1) German reparation payments, Austrian social insurance  payments, and Netherlands reparation payments  2) Japanese and Aleutian restitution payments  3) Agent Orange settlement payments 4) Radiation exposure compensation payments  5) VA pensions up to ninety dollars per month, paid to veterans in  a nursing facility or on HCBS Waiver.  This reduced pension  applies to the following:  a) A  veteran without a spouse or child; and b) A  veteran's surviving spouse without a child. 6) SSI benefits, for institutionalized individuals, during the first  three full months of institutionalization.  7) RSS benefits to institutionalized individuals 8) Victims of Crime payments 9) Cost‐of‐living subsidies from MRDD OAC 5160:1‐3‐04.3(C)(2)(b) 115

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Veteran’s Income 1) VA pension or Aid and Attendance based on  financial need is a benefit for Veterans or  their spouses. 2) If Veteran or spouse becomes  institutionalized, VA is reduced to $90 per  month. 3) Regardless of whether, or when, the VA  pension is reduced, the first $90 of the VA  pension is not income.  116

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Miller Trust Income irrevocably transferred to a Miller or  Qualified income trust (QIT) is not countable for  eligibility purposes only.  

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Miller Trust Characteristics  Patient

liability calculations are determined posteligibility, and take into account the money deposited into the Miller Trust that month

 Having

a Miller Trust does not necessarily mean PETI (Post-Eligibility Treatment of Income) applies.  The

PETI determines how much an institutionalized individual is able to contribute to the cost of his/her own care

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1. State  identifies  impacted  individuals and  sends  notification







Notifications sent to the individual: o

Explain the 1634 change and the individual’s option to open a Miller Trust

o

Provide implementation timelines and when action needs to be taken

o

Refer the individual to a Trusted Community Partner for additional guidance

Consumers impacted by this change include: o

Individuals residing in a Nursing Facility or an Intermediate Care Facility

o

Individuals participating in a Home and Community Based Service waiver

Multiple notifications may be sent to individuals to inform them of 1634 changes and remind them to take action 119

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2. Trusted  Community  Partner  Provides  Education to  Individual



Trusted Community Partners (TCP) conduct outreach to their individuals



TCPs educate individuals and provide guidance about:



o

Miller Trust Requirements

o

Implementation timeline and when action must be taken

o

State approved Miller Trust template

Ohio Department of Medicaid (ODM) provides TCPs with educational documents and fact sheets that are used to assist individuals

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3. Legal Partners  Provide  Assistance to  Create Trust



ODM provides step by step instructional material regarding how to open a Miller Trust



Trusts may be created using a template provided by ODM



Legal guidance is recommended when a Miller Trust is created

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4. Individual   creates a bank  account for  Miller Trust  deposits



Individual must create a bank account used exclusively for Miller Trust deposits



The account can be opened in any bank that provides this service



Banks may charge a fee to administer the Miller Trust account but there will be a $15 disregard in the patient liability calculation

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5. Individual  Provides Trust  Information to  CDJFS office 



Individuals must provide:



The CDJFS office is responsible for documenting information and processing eligibility for the individual

o

Proof that a Miller Trust has been established

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6. Individual  Makes Monthly  Deposit into  Trust 



The individual is responsible for making monthly deposits into the Miller Trust account



The monthly deposit amount is dependent on the individual’s income and changes when income changes

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7. Monitoring of  Trust



The State will establish a process to monitor monthly Miller Trust deposits

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Deductions to Income 1) Generally, gross income is counted 2) Examples of deductions not allowed:  a) Court ordered child or spousal support b) Other court ordered deductions c) Taxes withheld d) Garnishment orders 126

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Retirement Accounts As Income 1) It is unearned income if the individual can  receive regular guaranteed lifetime payments  2) Must apply for all such benefits when available 3) Must maximize benefits – must request CS to  waive joint and survivor benefit (ERISA  problems) 4) CS Just Say NO 5) Must document CS’s refusal 127

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What is Patient Liability? 1) Gross Income 2) Minus $50 PNA (Personal Needs Allowance) 3) Minus Health Insurance Premiums 4) Minus MIA for Community Spouse 5) Minus Past Unpaid Medical Expenses 6) Minus Miller Trust bank fees of up to $15 per  month (after 7‐1‐2016) 7) = Patient Liability  

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Unpaid Past Medical Expenses (UPME) a.k.a. (Act 52) 1) UPME will be applied to the patient liability  first before calculating payment to the  nursing facility 2) Client chooses which months to apply the  UPME to the patient liability 129

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Monthly Income Allowance (MIA) 1) Minimum MMMNA of $1,992 (7/1/16)  2) Add Excess Shelter Allowance over $598  (eff. 7/1/16) which includes the Utility  Allowance $510 (eff. 10/1/15) or actual if greater  3) Compare to MMMNA cap of $2,981  (eff. 1/1/2016) and use the smaller.  If actual is  higher can request an administrative hearing for  extraordinary circumstances. 4) Then subtract CS’s income 5) = MIA 130

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Excess Shelter Allowance Example Mortgage Real estate taxes            Insurance Total Shelter cost (Plus) Utility Allowance (Less) Excess Shelter Allowance Std. Excess Shelter Allowance 

$    500 $    200 $      50 $    750 $    510 $ 1,360 $   (598) $    782 131

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Monthly Income Allowance Example Minimum Monthly Maintenance Needs  Allowance (MMMNA) Standard      $ 1,992 (Plus) Excess Shelter Allowance    $    782 MMMNA (Capped at $ 2,981 (eff. 1/1/16)) $ 2,775 (Minus) CS’ Income               Monthly Income Allowance (MIA) 

$(1,274) $ 1,500 132

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Patient Liability Example IS’ Gross Countable Income     $ 2,000 (Minus) Personal Needs Allowance (PNA) $     (50) IS’ Available Income $ 1,950 (Minus) Medigap Insurance Premium (Minus) MIA   

Patient Liability

$   (250) $(1,500) $     200 133

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Annuities

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Annuities 1) If purchased after Feb 8, 2006 a) Annuity = Resource unless i.

State of Ohio is beneficiary • In first position, or • In second behind spouse • For the amount of medical expenses paid by Ohio

b) Not a transfer of resource if annuity is purchased  with qualified retirement funds – i.e. proceeds of  IRA, Roth, 401K, etc.  c) Must be irrevocable and non‐assignable d) Must be actuarially sound – no lump sum  payments or balloons 135

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Annuities as Improper Transfers 2) ODM has taken the position that the purchase of  an annuity for the CS after institutionalization,  as a means to spend‐down IS’s allocated  resources to $1,500, is an improper transfer.   3) An Ohio case decided by the Federal 6th Cir. Ct.  of Appeals held that such a transfer was proper.  4) However, ODM has stated it will not follow this  decision.  Further litigation on this issue is  pending with the US Court for the Southern  District of Ohio.   136

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Update on Medicare Premium Assistance MPAP programs provide for payment of Medicare premiums (SLMB and Q-I for up to 135% of fpl) and, for incomes up to 100% of fpl, payment of Medicare co-pays and deductibles. (QMB) Previously the income was compared only to the individual, or if both eligible, to the couple need standard. Effective 1-4-2016, based on Pro Seniors’ case Wheaton v. McCarthy, the policy is now to compare the income of the individual and spouse to the fpl for the size family, which includes spouse and dependent minor children. 

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Pro Seniors’ Services Ohio’s Senior Legal Hotline: 1) Staffed by experienced attorneys 2) Pre‐set appointments 3) By telephone 4) 30 minutes 5) Free legal advice and counsel 6) Call 1.800.488.6070 or 513.345.4160.

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