Long Term Care

How to Apply for Medicaid Nursing Home Benefits

Nursing homes are expensive.  Medicaid (called SoonerCare in Oklahoma) covers the cost of Nursing Home expenses for those who qualify.  Unfortunately, many myths surround how to apply or become eligible.

Medicaid Myths:

  • You cannot own anything
  • You have to give everything away
  • You can only have $2,000
  • You cannot be eligible for 5 years

Medicaid Eligibility

Medical:  The person applying for Medicaid must need services provided either in home or in a skilled nursing facility.

Financial:  The rules surrounding Medicaid eligibility are very complex.  Medicaid is a federal program that states administer.  There are rules regarding assets, however there are many exceptions and exemptions from those rules.  In short, a person applying may have far more than $2,000 and still be eligible.  Married couples can protect large portions of their life’s savings.

Citizenship:         Applicants must be United States citizens.  Certain exceptions apply to certain non-citizens residing here legally.

Medicaid Application and DHS

The Medicaid application process can be simple but many people fail to become qualified if they do not provide the correct information.  The caseworker looks at the income and current assets.  Perhaps the most troublesome requirement is the production of 60 months of records, including cancelled checks, from all financial institutions.  These are required for any account even if it has closed during the 60 months.

Why does Medicaid Want 60 Months of Records?

The 60 months is called the “Look Back Period”.  Transactions are examined to see if property was given away for sold for less than its fair market value.  If such a transaction is found, the caseworker may impose a “Penalty Period”.

What is a Penalty Period?

The Penalty Period is amount of time the applicant must wait before Medicaid will begin paying for the care. 

Penalty Period Examples:

Example 1:  It may be possible to explain the transfer to the satisfaction of the caseworker.  However, it is likely that the transfers will be penalized.

Applicant gave grandchildren $10,000 over the past 60 months (birthday or Christmas presents)$10,000
Medicaid divides that amount by the daily divisor  The 2017 rate is $144.6710,000 ÷ 144.67 = 69

 

Penalty Period69 days

 

Example 2:  In a recent case, a penalty period was imposed on church tithing.  The applicant appealed to a Fair Hearing and was able to show that the giving was a pattern that had not changed in decades.  The Appeal wiped away the penalty period.

Applicant gave Church $10,000 over the past 60 months as a pattern of tithing or giving.$10,000
Medicaid divides that amount by the daily divisor  The 2017 rate is $144.6710,000 ÷ 144.67 = 69

 

Penalty Period69 days reduced to zero on appeal

 

Example 3:  Father deeds $400,000 farm to son and applies for Medicaid 4.5 years later.  This example demonstrates two points.  First, if the date of application was delayed 6 months, then the transfer of the farm would not be considered at all.  The second point is that there is no limit to the amount of the Penalty Period.

Applicant deeded son a farm valued at $400,000  4.5  years ago$400,000
Medicaid divides that amount by the daily divisor  The 2017 rate is $144.67400,000 ÷ 144.67 = 2765

 

Penalty Period2765 days (7.5 years)

What is a Fair Hearing?

A Fair Hearing is a process where the decision of a caseworker can be challenged.  Denials of applications and imposition of Penalty Periods are good reasons that such an action may be considered.  A notice of disagreement is filed.  It is a good idea to prepare a brief stating the applicant’s side of the case.  In the brief, the factual or legal conclusions behind the casework’s denial or penalty period can be fully challenged.  At the hearing itself, the parties are allowed to present their sides.  The Administrative Hearing Officer takes the matter to a committee that then issues an order which may agree with, overturn or modify the caseworker’s decision.

How an Elder Law Attorney Can Help:

It is never too late to plan even in crisis.  Among the things Elder Law Lawyer can do includes:

  • Presenting the application for benefits in a way that explains the exceptions or rules for the caseworker.
  • Identify troublesome transactions that may cause penalties. Once identified, there are ways to cure the penalties, delay applications or take some other course to avoid or minimize the Penalty Period.
  • Developing permissible transfers that preserve assets while minimizing penalty periods.
  • File a Fair Hearing Request and represent you at the hearing.

 

While no attorney can guarantee results, applicants typically benefit from the services of an Elder Law attorney knowledgeable with the workings of Medicaid.

Can Somebody with Dementia or Alzheimer’s Make a Will?

Yes, but there may be a point where this becomes impossible.

Families often face a difficult situation when they receive a Alzheimer’s or dementia diagnosis.  Often, the signs preceded the diagnosis.  Whether an individual is dealing with a suspicion or “official” diagnosis, there may still be an opportunity to create an estate plan.   In fact, there is a great need to do so.

Good News, Estate Planning is Possible

Everybody over the age of 18, even those with a disease affecting their brain, is presumed to be competent to create a will.   This means that they have “testamentary capacity”.  Even if somebody has been determined by a court to be incompetent, there may be times when the person may have lucid intervals when he knows the extent of his estate and who should receive the inheritance.

Nature of Dementia, Windows of Opportunity

Most of us who have been around suffers of dementia realize that it is not an all or nothing condition.  For example, the term “sundowners” unsplash-windowrefers to the worsening of dementia in the late afternoon or evening.  At those time, individuals may hallucinate, become agitated or paranoid.  See http://sundownerfacts.com/symptoms/  Strangely, for some of these people the conditions disappear or lessen the next morning.

Generally, dementia such as Alzheimer’s is progressive.  However, the rate that it progresses varies.  According to Alz.org.[i]

The symptoms of Alzheimer’s disease worsen over time, although the rate at which the disease progresses varies. On average, a person with Alzheimer’s lives four to eight years after diagnosis, but can live as long as 20 years, depending on other factors.

From a planning perspective, it is best to draft and sign essential estate and asset planning documents early.  These may include:

  • Powers of Attorney

  • Wills

  • TrustA photo by Sonja Langford. unsplash.com/photos/eIkbSc3SDtI

  • Advanced Healthcare Directives (Living Wills)

  • HIPAA Releases

Concerns about Long Term Care

In addition, this is an ideal time to make plans for governmental programs that can help pay for care.  For example, Medicare does not pay for long-term care in a facility.  However, Medicaid can be an option to explore.  Also, veterans, their spouses and widows can be eligible for certain pensions such as the VA Wartime Pension also know as Aid and Attendance.  However, both Medicaid and certain VA benefits are needs based.  This means that those with too much income and or too much in net worth may not be eligible for these programs.  However, individuals can become eligible without losing their life savings.

In short, when a diagnosis occurs, it is a good idea to consult with an elder law attorney who has knowledge about the disease, the needs of the family and how to navigate through the Medicaid and VA eligibility requirements.  However, failure to take advantage of the opportunity to plan may result in the need of guardianship or other court administered processes.

[i] http://www.alz.org/alzheimers_disease_stages_of_alzheimers.asp

DHS Denies Grandmother’s SoonerCare Nursing Home Benefits

Imagine that your grandmother is denied benefits because she spent all of her money trying to remain in her home. DHS looks at the finances and says that because she paid family members that she now has to wait 2 years. We did not like that answer and fought the decision.

Before a person is qualified for Medicaid they must be both financially and medically eligible.  An application is completed then the family must provide 60 months’ worth of financial records to the Oklahoma Department of Human Services.  DHS looks for gifts with the assumption that they were made to become eligible for Medicaid.

Gifts create Penalty Periods

It is not unusual for the DHS to impose a penalty period when someone applies for nursing home benefits.  The rules are so complex that the caseworker may apply the wrong standard.  Money paid for legitimate services may be treated as gifts.  This happened in the case of Ms. Clara.**  Ms. Clara and her husband were in their 90s.  They suffered from limited mobility, medical problems and dementia.  Living alone was not an option as they were both at risk of falling. Ms. Clara often put beans on the stove and forgot about them causing a fire risk.  Their doctor suggested 24 monitoring.  The family held a meeting and agreed that they, together with some close friends, would provide caregiving services and be compensated at the rate of $10 per hour.   They provided needed supervision and other services for about two years.

Out of Money and Out of Help

Ms. Clara’s husband passed away.  Shortly afterwards her daughter, who spearheaded the caregivers, also passed away.  The family was no longer able to manage the caregiving.  About this time Ms. Clara ran out of money as well and entered a nursing home.  She applied for Medicaid skilled nursing benefits.  DHS examined the bank statements and initially concluded that $60,000 was transferred to family members. Instead of viewing the payments as compensation for services, DHS treated them as gifts. Later, they revised the number to $113,000 which created a penalty period for 792 days.  Click Here To See Denial of Claim

Caseworker Used Flawed Reasoning, Ignored Facts

The caseworker used flawed analysis when she rejected the application.  She treated the $10 per hour as an being paid without return of fair market value.  In short, she treated the payments as gifts. She ignored Ms. Clara and her husband’s needs.  She also failed to consider that paying a company would have cost at least twice as much to provide the same care.

The Caseworker was 98.6% wrong. 

A brief was written to explain to the Administrative Law Judge how the caseworker erroneously applied the law and ignored relevant facts.  Negotiations with DHS’s attorney reduced the amount in controversy fro $113,000 to $106,000.  A fair hearing was needed to resolve this amount.

The Hearing:  Facts and Witnesses

The Administrative Law Judge conducted the hearing by telephone.  About a week in advance, we delivered Ms. Clara’s exhibits.  The family did a great job keeping time logs that were used to calculate the amounts paid to the caregivers.  Exhibits were created to show how the checks related to the time logs.  The grandson was an excellent witness and was able to describe the care his grandparents needed.  The Administrative Law Judge asked pointed questions to each side.  It was clear that he wanted to know the facts and come to the right decision.

The $111,000 Victory*

Family provided care for 2 years.

About 2 weeks after the hearing, and just in time for Ms. Clara’s 97th birthday, the Appeals Committee issued its opinion.  Of the original $113,000 used to calculate the penalty period, the committee found only $1,983 to be a gift.  So instead of 792 days of ineligibility, only a 13 day penalty period was imposed.  Read Decision Here.  It turns out that the caseworker was 98.6% wrong.  The ineligibility or penalty period was reduced from more than 2 years to less than 1/2 of a month.

What this case means:

Medicaid rules are complicated.  Attorneys who practice in this area must seek constant training to stay up-to-date on the changes.  DHS’s overworked caseworkers and employees approach their job with a certain viewpoint. This prospective can lead them to make the wrong decision resulting in potentially devastating results for applicants.  In Ms. Clara’s case they applied the wrong law and were wrong about the facts.  Frankly, as with all humans, they make mistakes.  A fair hearing is one way to rectify a bad decision.

Planning vs. Legal Challenges

Attorney involvement occurred late in this case.  There may have been ways that the family could have protected more assets with advance  or crisis planning.  Perhaps the caregiver compensation could have been structured or explained in a manner that was more palatable to DHS.   Providing more detailed information during the application may have prevented DHS from taking a position that they stubbornly held onto.  Instead, a year long battle occurred before DHS was required to approve the benefits.  Ms. Clara, the family and the nursing facility would have benefited from more certainty.

If you receive a bad decision, have it reviewed

It is very possible that a denial or imposition of a penalty period is wrong.  An attorney knowledgeable in Medicaid rules and regulations should be consulted.  If DHS’s decision is wrong there are avenues to challenge the decision.  Ms. Clara’s family and the nursing facility worked with our firm to present her case at the fair hearing and achieved a significant result.


 

*The appeals, results, awards, and settlements listed on this website are an example.   These results should not be used for comparison to your case or to any other case.  These examples and are not intended to predict the outcome of any potential case. Every case is different and must be evaluated based on its own merits. This website should be not be construed as a representation or guarantee that your case will produce a similar settlement or result.

I am the grandson and legal guardian for the above case. Richard did an excellent job representing us in the DHS fair hearing. Uber knowledge of case law and dhs interworking. I recommend him highly.
thanks, DLM

 

** Clara is not the client’s last name.  The attached opinion was redacted or otherwise modified to preserve the client’s identity.

No client photographs were used in this article.

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