MEDICAID INFORMATION PACKET

Prepared for Clients of:

2011

Table of Contents General Information on the Medicaid Application Process ............................ Page 3 Basics of Medicaid Eligibility ................................................................. Pages 4 - 5 Revocable and Irrevocable Burial Accounts ................................................... Page 6 What is NAMI? ............................................................................................... Page 7 While the Medicaid Application is Pending ................................................... Page 8 Frequently Asked Questions ........................................................................... Page 9 Medicaid Qualification Documents Checklist .................................... Pages 10 – 12

2

General Information on the Medicaid Application Process Step 1 – Assessment of Eligibility Upon retaining the legal services of Pfalzgraf, Beinhauer & Menzies (PBM) an assessment of eligibility will be made to estimate when Medicaid Coverage will begin. In order to determine this date, PBM will require the documents from the Medicaid Qualification Checklist. The coverage date may change throughout the process depending on what is discovered in the review and tracking phase. Step 2 – Document Review and Tracking All documents provided will be reviewed and financial transactions will be “tracked” in order to determine the current assets, income and to verify if transfers or gifts were made during the Medicaid look-back period. This step can take anywhere from a few weeks to a number of months depending on the number of financial accounts, the companies where the accounts are held, and the amount of information the applicant’s family has available. Step 3 – Preservation of Assets A snapshot of all resources and transfers will be prepared and the family will be given instructions on what must be done to preserve the applicant’s assets. A snapshot can only be prepared if the client has continuously provided up-to-date account information. In many cases, the client will be asked to provide a transaction history or bank printout from the available financial accounts in order to verify the current account value. Step 4 – Submission of Application After the steps have been completed to preserve the applicant’s assets, the Medicaid Application is mailed by PBM to the Department of Social Services (DSS) via certified mail. A caseworker will contact PBM to schedule an interview date about two weeks from the date the application is received by the DSS. Step 5 – Medicaid Pending Once the interview has been held, there is a time limit on obtaining any missing documentation. While PBM will try to have the application complete, there are occasions when a caseworker will ask for unanticipated information. PBM will work with the client to acquire any missing documents. The application may remain in the pending status with the DSS for as little as a month or as long as over a year depending on the caseworker, the number of financial accounts associated with the application, and the documents that may be missing.

3

Basics of Medicaid Eligibility for Skilled Nursing Home Coverage Medicaid is a national system of health insurance administered by the States for persons who are both medically and financially needy. Medicaid will pay for certain medical expenses required by a person’s physical condition, whether in a nursing home or at home, but pays only after Medicare, private insurance and a person’s assets and income are spent down to Medicaid levels. Medicaid generally does not pay for the cost of assisted living. The resource and income levels for a married couple are more generous than the resource and income levels for a single individual. Married Couple – 2011 figures A. Assets:

Community spouse *or a maximum of $109,560 if the couples’ countable assets exceeded $232,920 on the date the sick spouse is institutionalized

$74,820*

Medicaid recipient (institutionalized spouse)

$13,800

Home and one automobile – exempt B. Income:

Community spouse $2,739/mo. Medicaid recipient $50/mo. Medicaid recipient - Aid and Attendance, if eligible $90/mo.

C. An irrevocable funeral trust fund can be established for the Medicaid Applicant. There is no limit on the value of this account. Irrevocable Burial Accounts for certain exempt burial space items for family members and their spouses –casket, crypt, urn, cost of opening/closing grave, headstone, engraving and burial plot may also be purchased. The Fund must be transferable between funeral homes. Any excess monies remaining in the fund after the funeral must be paid to the county, which provided Medical Assistance to the recipient. D. Life insurance policies with a total face value of $1,500.00 or less for both the Medicaid applicant and community spouse are considered exempt. E. The Community Spouse may be able to keep resources in excess of the resource limit if the Community Spouse has income below the community spousal income allowance, also known as the minimum monthly maintenance needs allowance (MMMNA).

4

Single Individual- 2011 figures If a single person has to be institutionalized, today’s Medicaid rules provide: A. Assets: Medicaid recipient $13,800 B.

Income:

Medicaid Aid and Attendance, if applicable

$ 50/mo. $ 90/mo.

C.

The single person can also establish an irrevocable funeral trust fund.

D.

Life insurance policies with total face value of $1,500.00 or less

Transition From Private Pay to Medicaid – Requirement of PRI Before the Department of Social Services (“DSS”) will approve a Medicaid application at the Medicaid covered level of care, a Patient Review Instrument (PRI) must be submitted showing the level of care that the applicant requires. If the applicant can be served at a lower level of care (Assistive Living Program, Adult Home, Home Care, etc.), the application for skilled nursing care Medicaid will be denied. Outright Gifting: The Deficit Reduction Act drastically changed the rules relating to Medicaid eligibility when there is a transfer of assets during the five years (60 months) immediately preceding the date of a Medicaid application. The law provides that there is a five year look back period on every Medicaid application and that any transfers made during the look back period will be reviewed to see if they make a Medicaid applicant ineligible for Medicaid assistance. If they do create a period of ineligibility the penalty will begin in the month the applicant is otherwise eligible and has applied for Medicaid. The DSS calculates the penalty period by dividing the total of the gifts made during the look back period by $7,863. The result is the length of the penalty period, e.g. a transfer of $78,630 will create a 10 month period of ineligibility ($78,630/7,863 = 10). By careful planning, even when an individual is in a skilled nursing facility and they have made transfers during the look back period, there are ways to preserve and protect assets and qualify individuals for Medicaid assistance. Pfalzgraf, Beinhauer & Menzies will discuss these specialized and sophisticated planning techniques with your family as it pertains to your family’s individual needs.

5

Irrevocable Burial Accounts Irrevocable Burial Space Items Trust Account for Children and their Spouses (For Applicant’s Parents, Spouse, Children and their Spouses, Siblings and their Spouses) **Irrevocable Burials for family members other than spouse must be purchased before the Medicaid Coverage Date Burial Space Items All or some of these items may be purchased and put into an Irrevocable burial trust account: 1. 2. 3. 4. 5. 6. 7. 8.

Gravesite Casket Crypt Urn Cost of opening/closing grave Headstone Engraving Custodial care of the gravesite

Non-Burial Space Items These items cannot be put into an Irrevocable burial trust account: 1. 2. 3. 4. 5. 6.

Flowers Hearse Clergy Death notices Funeral services and supervision for visitation Dressing/cosmetology

Irrevocable Burial Trust Account For Applicant (For Applicant Only) All items listed above under Burial Space Items and Non-Burial Space Items may be purchased and put into an Irrevocable Burial Trust Account. The funeral breakfast cannot be purchased in advance. ** Please make sure the Medicaid Applicant/Recipient or Spouse is named the purchaser of all burial funds.

6

What is NAMI?

NAMI is Net Available Monthly Income. This is the monthly amount the resident is required to pay the skilled nursing home during the Medicaid pending process and after approval.

Monthly income is any form of income received, including, Social Security, Pensions, 401K distributions, IRA distributions, rental income, interest earned and dividends. The family is not allowed to spend the applicant’s NAMI on expenses other than the skilled nursing facility.

The resident is allowed to keep $50.00 income as well as any health insurance premiums paid. * If the Applicant is enrolled in an EPIC program, generally, the Department of Social Services will not allow Applicant to keep EPIC once coverage commences. You should check with the DSS before cancelling the coverage.

**Estimated NAMI (Net Available Monthly Income) Example: Gross Social Security Gross Pension Gross IRA RMD Less Medicare Less Health Insurance Less Monthly Allowance Total NAMI to be paid to Nursing Home

$896.40 $150.00 $ 42.00 ($504 annual divided by 12) - $ 96.40 - $ 65.00 (monthly premium) - $ 50.00 $877**

**DO NOT PAY THIS AMOUNT – the above is an example to be used a reference in calculating a Resident’s NAMI. Please call our firm should you need help with this.

7

While the Medicaid Application is Pending:

1. 2. 3. 4. 5. 6. 7.

8.

Forward copies all monthly financial statements to our Firm. If there are income changes, mail copies of verification of same to us. Continue to pay for and maintain health insurance for the Resident. If changes occur with monthly health insurance premium, provide us with verification of same. The Resident can have no more than $13,800 in available resources at all times. If there are any financial accounts owned by Resident solely, a joint owner should be added immediately. Verification of this should be mailed to our offices. In the event that a Medical Provider will not accept “Medicaid Pending” and you have to pay the bill, please provide us with a copy of the paid bill and a receipt or cancelled check as quickly as possible. If you receive any correspondence from the Department of Social Services, you should contact us immediately.

Additional Instructions for Applications with a Promissory Note 9.

10.

11.

Make the Promissory Note payment to the Applicant each month and use the Applicant’s funds to pay Skilled Nursing Facility bills in full through the entire period of the Promissory Note. You must follow the payment schedule as outlined under the terms of the Promissory Note. The Promissory Note is a legal binding agreement between two parties and must be followed in order to avoid complications with the pending Medicaid Application. DO NOT pay Medical co-pays from Applicants resources until a decision for Medical Assistance is received or for the entire period of the Promissory Note, if the decision is not issued. If approved, Medicaid will pay the co-pays. If denied, the Applicant will be responsible for medical co-pays. We recommend that you set aside an amount equal to the co-pays until there is a final decision on the application and we know for certain what will be covered. If the Promissory Note pays out before we have a Decision for Medical Assistance, Resident’s income must be paid to the Skilled Nursing Facility. The Resident may keep $50 a month for personal expenses, such as telephone, hair appointments and clothing. The health insurance premium should be paid from the monthly income and the remaining balance should be paid to the Facility for the entire time the Application is pending.

8

Frequently Asked Questions 1.

How do we pay for hair care services, television, phone services, and other personal items for mom/dad?

The Department of Social Services does not pay for anything other than medical related expenses. The applicant is allowed to keep $50 a month in income. This money should be used to pay for personal expenses. For expenses over and beyond $50, funds can be taken from the resource allowance, or, if those funds are depleted, it is the responsibility of the applicant’s family. 2.

How long will it take for my mom/dad to start receiving Medicaid benefits?

Since this is a long and sometimes tedious process, there is no specific time deadline. It can take as little as a few months or as long as over a year. 3.

Do I have to do anything to assist with gathering the documents needed for the application?

To expedite the process, initially we ask that you provide us with all of the information requested on the document checklist on the next three pages that is within the family’s possession. While we do our best to obtain any missing items needed for the Medicaid application, there are occasions when we are unable to do so. When this happens, you will be asked to contact banks, life insurance companies, county records, and so on. 4.

I have everything on the documents required list, will I be asked to obtain additional information?

Yes, the Department of Social Services has very specific regulations about the documents they require before the application is considered complete. You will also have to continue to forward us monthly bank statements as well as verification of income and health insurance changes. 5.

Is the anticipated Medicaid Coverage date set in stone?

No. Pfalzgraf Beinhauer & Menzies, LLP will do our best to make sure the anticipated coverage date is the effective coverage date, however, we cannot guarantee this. The coverage date may change because of undisclosed resources, transfers, changes in income or changes in the Law. Should the coverage date change, Pfalzgraf Beinhauer & Menzies will work with the family to try to preserve as much of the applicant’s resources as possible. 6.

Does the Skilled Nursing Facility know my mom/dad is applying for Medicaid?

The business office will know. You should notify the billing office when we have an anticipated coverage date. Our Firm will also notify them. The nurses and caregivers will not be notified. The resident’s level of care will not change.

9

Pfalzgraf, Beinhauer & Menzies, LLP Counsel For Generations Medicaid Qualification Document Checklist To be completed by Applicant’s family prior to application for Medicaid

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Client Name: Social Security # Date of Birth: Authorization to Represent signed by client or POA (Pfalzgraf Beinhauer & Menzies LLP will provide you with this document for your signature) Copy of Power Of Attorney ORIGINAL Birth Certificate (husband and wife) Marriage Certificate (if applies) If separated or divorced, proof of separation or divorce If spouse is deceased-copy of death certificate Social Security Card (husband and wife) Verification of Address-drivers license, tax bill Proof of residence prior to admission to a SNF-Drivers license, tax bill Naturalization papers or Alien reg. card Medicare Card-front and back (husband and wife) Proof of Private Health Insurance-copy of card front and back (husband and wife) Proof of bill for health insurance (husband and wife) Armed Services discharge papers or other proof of service for applicant and spouse Last eight pay stubs/statements from employer Letter from appropriate agency or photocopy of most recent check for: a. Social Security-Annual statement of gross benefit b. Pension or retirement c. Veteran's Benefits d. Railroad Retirement e. Union Benefits f. Workman's Compensation g. NYS Disability Insurance h. Court ordered support payments *If any of the above benefits are deposited directly into a bank/credit union account, indicate most recent deposit on bank statement/book.

17 Stocks, bonds and/or securities, certificates and any transactions made in the past 60 months (5 years) 18 Face and cash values of all life insurance policies

10

Mark Completed Items

19 Copy of original life insurance policy 20 If the applicant sold or transferred property within the last 60 months (5 years), a copy of the closing statement of sale/proof of transfer. 21 If the applicant has tenant(s): tenant(s) statements/rent received; book showing amount of rental income; maintenance and repair costs 22 Current proof of mortgage/escrow, tax bills, homeowner’s insurance premium, water bill. 23 Deed(s) to all property owned (real estate) 24 Location and number of Safe Deposit Box 25 Documentation for Burial Trust a. Applicant, Applicant’s spouse, children and children’s spouses Burial Trusts must be Irrevocable b. Please provide copies of children’s birth certificates and marriage certificates. c. Applicant’s spouse, children and children’s spouses Irrevocable Burial Trust, must contain items that are considered exempt for Medicaid purposes. 26 In-Home Health Care Only: If in-home health care is or may be needed by the applicant, a B-1508 MAA-MD medical form is to be completed by the applicant’s physician. Applicant must have been seen by physician within the last 30 days. The form must be brought in at time of interview. 27 Title or Registration to vehicle

28 Blue Book Value of vehicle 29 Copies of Income taxes with 1099s for the last five years

11

30 List Each account separately-checking, savings, investment, IRA, Annuity, etc. and provide statements of activity for the past 60 months (5 years) through present. All open and closed accounts (all Trust, IRA, and annuity accounts require 60 months of documentation together with a copy of the Trust or contract). 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 31 Explanation and proof (including receipts and cancelled checks) of all large withdrawals and deposits in bank/credit union accounts (anything over $2000) is required

12