1040.020.40  Determining the Penalty Period

For any transfer which falls within a look-back period, determine the penalty period according to the following:

• Determine the total uncompensated value of the transfer.
• Divide that amount by the average private pay rate for nursing care at the time of application of nursing facility services. The Average Private Pay Rate changes effective each January.  Current and previous rates are:

• Determine the penalty period including any partial month penalty by dividing the transfer amount by the private pay rate. This figure represents the number of months of ineligibility for vendor or HCB services. There is no limit to the number of months. Once the number of months is established, it cannot be recalculated using an updated average private pay rate if the person reapplies.

  Example: Walter Anderson applies for vendor assistance April 9, 2018. His look-back date is April 9, 2013. In investigating his application, you find that from the sale of his farm he gave $80,000 to a grandson, Mark, in March 2004. A granddaughter, Beth, received $80,000 in February 2014. Mr. Anderson's transfers must be treated differently.

  The transfer to Mark occurred before the look-back date and therefore does not create ineligibility. Since the transfer to Beth is in the look-back period calculate the penalty period. Divide $80,000 by $6,122.00 to arrive at a figure of 13.06. Mr. Anderson was determined eligible except for the transfer as of May 2018. The full 13-month penalty period runs from May 1, 2018 through May 2019 with a partial month penalty calculated for June 2019.

For June 2019, the partial month penalty of 2 days would be added to the 13 month penalty period. This means that the MO HealthNet program would authorize payment of long-term care expenses beginning June 3, 2019.

• If there is only one transfer involved in the determination, start the penalty period with the month in which the transfer occurred, or the month the participant was determined eligible, except for the transfer, whichever is later . The participant will not be eligible for vendor or HCB benefits during the penalty period. A transfer will not affect a participant's eligibility for non-vendor benefits.
• If there is more than one transfer involved in the determination, see Section 1040.020.40.05 for handling multiple periods of ineligibility.

1040.020.40.05  Multiple periods of ineligibility

Multiple periods of ineligibility are to be served consecutively, rather than concurrently. Periods of ineligibility resulting from transfers may not overlap any other period of ineligibility due to transfers. Determine the length of each period independently. If all the transfers occurred in the look-back period, the period of ineligibility for the first transfer begins in the month the participant was determined eligible, except for the transfer. The period of ineligibility for the next transfer begins in the month following the month in which the first penalty period ended, or the month of the next transfer, whichever is later.

EXAMPLE:  From the example above, Mr. Anderson additionally gave his sister Barbara $40,000 cash in June of 2015. This will result in an additional period of ineligibility which begins immediately following the end of the previous period of ineligibility.

1040.020.40.10  Periods of ineligibility when both spouses are institutionalized

Whenever a penalty period is assessed to either member of a couple, the period applies to whichever one of the couple becomes institutionalized.  If only one member of the couple is institutionalized, the period is calculated and applied in the same manner as though the institutionalized person were single. However, if at any time during the penalty period both members of the couple should become institutionalized, the remaining penalty period must be proportioned between them.  Divide the remaining penalty period by two.  If the remaining penalty period before dividing is an even number of months, the spouses will have an equal number of months in their respective penalty periods.  If the remaining penalty period before dividing is an odd number of months, arbituarily assign the extra month to one or the other spouses.

If a penalty period applies while both spouses are institutionalized but one spouse then leaves the facility or dies, the remaining penalty period must be applied in its entirety to the remaining institutionalized spouse.

If neither spouse is institutionalized, the penalty period runs in the same manner as though applied to a single institutionalized person.

Example:  Emile and Carlotta Guitterez are married.  Carlotta transfers property to her niece in June 1994, incurring a penalty period of 38 months, ending in July 1997.  Emile becomes institutionalized in October 1994.  Because of Carlotta's transfer, Emile is ineligible for vendor benefits.  The notice to Emile should include the months for which he is ineligible, a statement that any transfers made by either spouse, may affect applications by either spouse, and that this or other penalty periods may change if Carlotta should require nursing care or HCB services.  The legal citation remains 208.010 RSMo.

In November 1995, in the 18th month of the penalty period, Carlotta also becomes institutionalized and applies for benefits.  20 months of the penalty period remain.  It is divided equally between them.  Emile and Carlotta each remain ineligible for vendor benefits for 10 more months, through September 1996.  The notice to Carlotta should include the months for which both she and Emile are ineligible, citing 208.010 RSMo.

Example:  Sam and Irma Goldberg gave away property in April 1994, enough to incur a period of ineligibility of 42 months.  In June, they both enter a nursing facility.  Two months of the penalty period had passed prior to their entry into the nursing facility, leaving 40 months (since neither was institutionalized for those two months).  Each is ineligible for vendor benefits for 20 months.

Eight months later, Sam dies.  Between the two spouses 16 more months of the penalty period have been used. Irma remains ineligible for 24 more months.

1040.020.40.15  Eligibility for other programs during a penalty period

Claimants may be approved for non-vendor level of care in a vendor institution if ineligible for a vendor level of care due to a transfer.  Use regular MA budgeting for these type of situations.

1040.020.40.20  Dispute of Improper Transfer of Assets Penalty

An individual may dispute the imposition of transfer of assets penalty by providing a full written accounting and documentation of the transfer which clearly explains the following:

• The purpose for transferring the resource; and
• The attempts to dispose of the resource at fair market value; and
• The reasons for accepting less than fair market value for the resource; and
• The individual's relationship, if any, to the person to whom the resource was transferred.

The individual must provide documentation verifying the assets were transferred exclusively for some purpose other than establishing MO HealthNet eligibility, thus not improper. The documentation may include, but is not limited to:

• contracts,
• realtor agreements,
• sworn statements,
• third party statements,
• medical records,
• financial records,
• tax records
• court records, and/or
• relevant correspondence.

The occurrence after a transfer of the resources of one or more of the following, while not conclusive, may indicate resources were transferred exclusively for some purpose other than establishing MO HealthNet eligibility:

• Traumatic onset of disability or blindness (e.g., due to traffic accident); or
• Diagnosis of a previously undetected disabling condition.

Evidence which is provided must be reviewed by the FSD staff to determine if it is clear, convincing, and credible. Evidence that is not clear, convincing, and credible does not rebut the presumption of an improper transfer.

If further guidance is needed, request a determination of possible eligibility on this factor by sending a summary of the case situation, through the proper supervisory channels for Income Maintenance programs to MO HealthNet Program and Policy at Cole.MHNPolicy@dss.mo.gov. Use the Request for Interpretation of Policy (IM-14) form and provide specific case details along with a copy of documentation of the asset transfer.

If the presumption of improper transfer is not overcome by the individual's rebuttal, the individual is not eligible for MO HealthNet vendor or HCB coverage if the individual is otherwise eligible for MO HealthNet benefits.

1040.025.00  NOTICE REQUIREMENTS

When a person is found to have transferred property which affects eligibility, they must be notified (via the IM-32, IM-33, IM-80, or IM-82A) of the following facts:

1. The property transferred and date transferred.
2. The fair market value.
3. The uncompensated value.
4. That the claimant transferred the property with the intent to gain eligibility or transferred the home and did not provide evidence to establish otherwise.
5. The length of ineligibility for vendor level of care or HCB services.

Persons who are not applying/receiving vendor level benefits but who have transferred property must be notified that transfers of property without receiving fair and valuable consideration may affect eligibility should the claimant enter a nursing home within 36 (or 60, if the transfer involved a trust or annuity) months from the date of the transfer.