Transfer penalty must be applied month of asset transfer or date of Medicaid eligibility

Topic: Health Law, Decided by: Judge Teate 
Docket Number: ******* , Decision Date: December 16, 2016 
Attachment: Click here to download the decision. 

After she received a $41,000 lump-sum settlement in a lawsuit, a nursing home resident made a gift of $23,724.  She simultaneously loaned $16,000 to her daughter, who executed a promissory note obligating her to repay the sum in monthly installments for the resident’s nursing home care. When the resident notified the Division of Family and Children Services (DFCS) that she had received the lump-sum payment and made the gift, DFCS terminated the resident’s nursing home Medicaid because the remainder of the sum exceeded program resource limits.  When the resident later reapplied for Medicaid, DFCS applied a transfer of assets penalty based on the gift.  This was improper, as the penalty should have been applied when the gift was made, or when the resident again became eligible for Medicaid.

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