Hill, Glowacki, Jaeger & Hughes, LLP
Law Offices
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Hill, Glowacki, Jaeger & Hughes, LLP Law Offices
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Medical Assistance Divestment Rules Change Effective January 1, 2009 On January 7, 2009, the State of Wisconsin issued an "Operations Memorandum" implementing the changes to the Medicaid law enacted as part of the Deficit Reduction Act of 2005 (DRA). These changes are effective for transfers of assets on or after January 1, 2009 (New Law). Transfers of assets prior to January 1, 2009 are subject to the rules in effect prior to enactment of the DRA (Old Law) notwithstanding when the application for Medical Assistance is filed. In general, if an individual transfers assets during the lookback period without receiving full value in return (in other words a gift or a sale for less than fair market value) (this is often referred to as a divestment) and subsequently applies for Medical Assistance, there may be a penalty period based on the following calculation: The total divestments during the lookback period are divided by the average monthly cost of nursing home care with the result of the division being a number of months of ineligibility (penalty period) commencing on the start date. (Note that under the New Law, the period will be expressed in a number of days rather than months.) Here are the major changes to the Divestment Rules: Lookback Period. Old Law: In general, the lookback period was 36 months prior to the date of application (except for certain transfers involving trusts which were 60 months). New Law: Under the new law, the lookback period for all transactions is 60 months. Multiple Transfers. Old Law: Under the old law, the “touching” rule applies, meaning that transfers in the same month, in consecutive months, in the month immediately following expiration of a prior period of ineligibility and transfers during a prior period of ineligibility will be added together for purposes of the calculation. New Law: All transfers during the lookback period will be added together for purposes of the calculation. Start Date for Penalty Period. Old Law: The penalty period starts on the first day of the month of the transfer. In the case of multiple divestments, the penalty period starts on the first day of the first month of the first divestment included as part of the multiple divestments. New Law: The penalty period starts on the date when all of the following have occurred:
* In the case of Home and Community Based Waiver programs, this would be the date when the individual meets the appropriate level of care and functional screen whether or not there is a waiver slot available. Note: There are many other changes to Medical Assistance as a result of the DRA. These are only some of the divestment changes. There are also new Hardship Waiver rules. |