1040.030.00  Determining the Penalty Period

The Deficit Reduction Act of 2005 Section 6011(d), 42 U.S.C. 1396p (c)(2)(D) required each state to establish procedures for determining when a transfer of assets penalty would cause an undue hardship. A transfer of assets penalty period must be waived when the imposition of the penalty period will:

• Endanger the individual’s health or life; or
• Deprive the individual of food, clothing, shelter, or other necessities of life

At the same time the notification of ineligibility for MO HealthNet vendor, Home and Community Based Services (HCB), Missouri Children with Developmental Disabilities (MOCDD) Waiver, or Program for All Inclusive Care for the Elderly (PACE) is sent to individuals on whom a penalty is imposed, inform the individual of the undue hardship exception and provide the individual with a MO HealthNet Undue Hardship Waiver Request (IM-63HWR) form.

The completed MO HealthNet Undue Hardship Waiver Request form, along with supporting documentation, must be submitted to the Family Support Division (FSD) office to request the waiver of the transfer penalty period. The eligibility specialist must submit the form and documentation on the Request for Interpretation of Policy (IM-14) form through supervisory channels to Income Maintenance Program and Policy at cole.mhnpolicy@dss.mo.gov . The MO HealthNet Program and Policy unit will determine if undue hardship exists and the transfer of assets penalty period will be waived.

In addition to the applicant/participant or their representative, a completed MO HealthNet Undue Hardship Waiver Request form can be submitted by the Administrator of the nursing facility in which the individual resides when given written permission. The nursing facility administrator can request a fair hearing and/or represent the institutionalized individual in any subsequent fair hearing activity involving an undue hardship request/denial, as long as the facility has the (or his/her representative’s) written permission.

NOTE: This provision does not appoint the facility Administrator as the institutionalized individual’s authorized representative under 0130.020.10 Appointment of an Authorized Representative.

1040.030.10  Effective Date of Approved Hardship Waivers Timely Request- Received Within 10 Days After Date of Notice

If the valid request for an undue hardship waiver is received by the FSD office within 10 days after the date of the notice of transfer penalty, and the waiver is granted, the effective date of the waiver will be the initial date of the penalty period. This will result in no loss in benefits to individual due to the transfer.

1040.030.20 Untimely Request- Received Later Than 10 days After Date of Notice

A request may be submitted later than 10 days after the date of the notice of transfer penalty, (for example, when there is a change in circumstances), but if approved, the effective date of the waiver will not be earlier than the date the FSD receives the completed MO HealthNet Undue Hardship Waiver Request form.

Example: Alice receives a notice dated February 10 that her January 20 application for HCB is being denied and that she will have a 350-day penalty period beginning January 20. In June, Alice’s health deteriorates and her monthly income decreases by 60%. Alice submits an undue hardship request to FSD, which is received on June 25. The undue hardship request is approved by MHN Program and Policy.  Alice’s remaining penalty period is waived and she’s subsequently certified for HCB beginning June 25.

1040.030.30 Required Documentation

For transferred assets the individual must have exhausted all reasonable means including legal remedies to recover the assets or income or the value of the transferred assets or income that have caused a penalty period before undue hardship can be considered. The individual (or his/her representative) must submit:

1. A statement signed by the individual (or his/her representative) which describes whether the assets are recoverable, and if not recoverable, the legal attempts that were made to recover the transferred assets, and
2. Proof that an undue hardship would exist if the penalty period is applied (as follows):
   • If the member is currently institutionalized, the individual must submit a copy of the notification sent from the nursing facility which states both the date of involuntary discharge and alternative placement location or other proof that if the hardship waiver is not granted, the individual will be deprived of medical care such that the individual’s health or life would be endangered; or deprived of food, clothing, shelter, or other necessities of life.
   • If the member is applying for Home and Community Based (HCB), Missouri’s Children with Developmental Disabilities (MOCDD) program or Program of All-inclusive Care for the Elderly (PACE), the individual must submit an estimate of the cost of the nursing services needed to meet the individual’s medical needs (as determined by the Department of Health and Senior Services or PACE Administrator) and an estimate of costs for food, shelter, clothing and other necessities of life.

Compare the two estimates to the individual, or couple’s income and assets. For MOCDD, compare the estimate to the income and resources of the child and his/her parent(s).  Submit documentation through Supervisory channels to MHN Program and Policy at cole.mhnpolicy@dss.mo.gov to determine whether the individual has sufficient income and/or assets to pay for the individual’s long term care.  If the individual does not have enough income and/or assets to pay for his or her long term care and other needs (i.e. food, shelter, etc.), consider the individual’s health to be endangered.

If the required documentation is not submitted with the request for an undue hardship waiver, send a written request for verification. If the applicant/participant fails to submit the required verification within 10 days after the request is mailed, deny the undue hardship waiver request and notify the individual with the Undue Hardship Decision Notice (IM-63HWD).

1040.030.40 Determination Process Timeframe

A decision on an undue hardship waiver request will be made by the MHN Program and Policy unit within 30 days after receipt of the request. Send the individual the appropriate Notice of Decision based on the agency’s decision.

If an undue hardship is approved, a new hardship request does not have to be done at review.  Once an undue hardship request is approved, either the entire penalty period is waived, or the remaining penalty period is waived, depending upon whether or not the client makes a timely or untimely undue hardship waiver request.  If the undue hardship request is denied, the client has the right to make another subsequent request, if and when their circumstances change.

1040.030.50 Fair Hearing Rights

If the request for an undue hardship waiver is denied, the individual has the right to appeal the decision through a written request to the Division of Family Support. The individual has 90 days from the date of the notice to file the appeal. These same hearing rights are also applicable to the facility in which the individual resides, as long as the facility has the institutionalized individual’s written permission to represent the individual in the appeal process.

1040.030.60 Referral for Financial Exploitation

If a family member or other transferred the asset, the eligibility specialist must make a referral to the local  agency for investigation of possible financial exploitation of an elderly, blind, or disabled individual.  See Financial Exploitation Policy.