I-5200, The Penalty Start Date

When multiple transfers occur during the look-back period in such a way that the penalty period for each transfer overlaps, treat the transfers as a single event. The uncompensated values are lumped together and divided by the average daily rate for a private-pay individual in a nursing facility. Start the penalty period with the first day of the month of medical effective date (MED), if the individual meets all other eligibility criteria.

Under post-DRA transfer of assets policy, the issue of "overlapping" penalties on applications will not occur since all transfers during the look-back period are lumped together and started with the first day of the month of MED, if the individual meets all other eligibility criteria.

I-5221 Multiple Transfers Example

Revision 13-4; Effective December 1, 2013

When multiple transfers occur during the look-back period in such a way that the penalty period for each transfer overlaps, treat the transfers as a single event. The uncompensated values are lumped together and divided by the average daily rate for a private-pay individual in a nursing institution. Total of $13,000 ÷ $156.34 = 83 days. Penalty period begins Jan. 1, 2013, and runs through March 24, 2013.

I-5230 Reported Changes and Redeterminations

Revision 09-4; Effective December 1, 2009

Reported Changes

If a penalty period ends and a subsequent transfer occurs, a new penalty period is established effective the month of the subsequent transfer. This means there may be a gap between penalty periods. Follow procedures below for notice, restitution and closing vendor payments.

Redeterminations

When a current Medicaid recipient transfers an asset, the penalty start date begins on the first day of the transfer month, if the transfer occurs later than the date of application. As a result, there may be a gap between penalty periods.

Example: A 365-day penalty begins Jan. 1 and ends Dec. 31. The following April another transfer is made, resulting in a 306-day penalty that begins April 1 and ends Jan. 31 of the following year.

When a transfer is reported, do not retroactively impose the penalty. If a penalty period is imposed on an individual who is already eligible for Medicaid, provide the adverse action notice and inform the recipient about the undue hardship exception. Request restitution for retroactive months, unless potential fraud, abuse or exploitation are involved. Follow Section H-8300, Restitution, and Section C-6000, Fraud and Fair Hearings, for fraud referrals. Follow procedures as outlined in Appendix XXIII, Procedure for Designated Vendor Number to Withhold Vendor Payment.

I-5231 Changes and Redetermination Examples

Revision 09-4; Effective December 1, 2009

• Institutionalized individual inherits $20,000 in April.
  • Transfers $20,000 on May 1 and reports it May 1.
  • $20,000/$117.08 = 170.82 days, round down to 170 days.
  • Notice of adverse action provided on May 1.
  • Adverse action expires May 12.
  • Restitute for April and May, since the inheritance is considered income in April and a countable asset as of May 1.
  • Mason Manor effective June 1 (month following notice of adverse action).
  • Total penalty period is 170 days - 31 (days from May restitution) = 139 days remaining in penalty period. The transfer penalty actually begins May 1, but the individual is ineligible for May due to excess resource.
  • Mason Manor begins June 1– Oct. 17.
  • Transfers the $20,000 on May 1 and reports it May 1.
  • $20,000/$117.08 = 170.82 days, round down to 170 days.
  • Notice of adverse action provided on May 1.
  • Adverse action expires May 12.
  • Restitute for February, March, April and May. The inheritance is considered income in February and an asset for March, April and May, as the transfer did not occur until May.
  • Mason Manor effective June 1 (month following notice of adverse action).
  • Total penalty period is 170 days - 31 (days from May restitution ) = 139 days remaining in penalty period.
  • Mason Manor begins June 1 – Oct. 17.
  • $7,150 transfer on Nov. 1 and reported on May 1.
  • $7,150/$117.08 = 61.06 days, round down to 61 days.
  • Notice of adverse action provided on May 1.
  • Adverse action expires May 12.
  • Restitute for November and December. The individual is ineligible due to income received in November and the transfer penalty begins Nov. 1 and ends Dec. 31.
  • Mason Manor is not applicable, as penalty period has expired.

  I-5240 Multiple Transfers – Historical

  Revision 09-4; Effective December 1, 2009

  Historically, when multiple transfers occurred during the look-back period in such a way that the penalty periods for each overlapped, the transfers were treated as a single event. The uncompensated values were lumped together and divided by the average daily rate for a private-pay individual in a nursing facility. If multiple transfers occurred in such a way that the penalty periods did not overlap, then the transfers were treated as separate events and the penalty periods were calculated separately.

  A new penalty period cannot be imposed while a previous penalty period is still in effect. Therefore, the penalty periods assessed under pre-DRA transfer of assets (OBRA 1993 rules) and under post-DRA transfer of assets (DRA 2005 rules) for multiple transfers that overlap run separately but consecutively.

  Under OBRA 1993 rules transfer of assets policy, the penalty period began the month of transfer.

  If the penalty period of the OBRA 1993 rules transfer goes past the medical effective date, then the penalty start date of the DRA 2005 rules transfer will begin immediately after the first penalty period ends.

  I-5241 Example Multiple Transfers – Historical

  Revision 09-4; Effective December 1, 2009

  Date	Detail
  File Date	01/02/2007
  Look-Back Period	36 months, 12/2006 through 01/2004
  Date of Transfer	1) 02/01/2006 and 2) 11/10/2006
  Value of Transfer	1) $45,000 and 2) $8,000
  Medical effective date	01/01/2007
  Penalty Start Date	First transfer – $45,000 ÷ 117.08 = 384 days. Using pre-DRA transfer of assets policy, penalty start date is 02/01/2006, which runs through 02/19/2007. Second transfer – $8,000 ÷ 117.08 = 68 days. Using post-DRA transfer of assets policy, penalty start date is 01/01/2007 (medical effective date). Because the penalty start date of the second transfer is before the end date of the first penalty period, begin the penalty for the second transfer immediately after the first penalty period ends.

  Transfer penalty of the second transfer for 68 days begins 02/20/2007 and runs through 04/28/2007. Total transfer penalty period is 02/01/2006 through 04/28/2007 (384 days + 68 days = 452-day penalty).

  If subsequent transfers of asset occur that do not meet the transfer of assets exceptions after the penalty period begins, add the new penalty to the end of the existing penalty period.

  See Section I-1000, Transfer of Assets, for information on the exceptions to transfer of assets penalties.