Why the Nursing Home Shouldn’t File Your Medicaid Application (Part 1)

Barry called me concerning his dad who is in a nursing facility.  He had spent down Dad’s remaining funds.  He paid the nursing home and set up a prepaid irrevocable burial trust as permitted by Medicaid.  The facility said they would file the Medicaid application so Barry gave them all of Dad’s records going back 5 years as required by the 5 year Medicaid look back.  So why was he calling me?

 Barry related to me that before his mom died 4 years ago his parents gifted $22,000 to their 2 children.    He said his Dad had now been assessed a Medicaid penalty of 5 months, meaning he was not eligible for benefits for that time period.  That didn’t sound right to me.  A transfer that size would result in a 3 month penalty.  But, I know that in telling their story, many callers aren’t accurate with the facts.  It’s not intentional.  It’s just that they don’t understand the significance of the details and how slight changes can drastically alter the outcome.  So I asked for Barry to fax me Medicaid’s decision.

 My first thought was that if the State calculated the penalty incorrectly, that can be appealed – if there is still time.  I couldn’t imagine they would have gotten the math wrong.  You take one number divide it by another to get the penalty.  But stranger things have happened.  Then Barry called back with a more surprising answer.

 The nursing home never filed the application!  They found the transfers, told Barry there is a penalty and that he must put the money back.  It was now 2 weeks ago since he had that conversation with the facility and 2 months since Dad had spent down his assets to below $2000.  Barry’s inaction and the facility’s handling of his Dad’s application were costing both of them money.  The meter, so to speak, was running.

 Next week I’ll explain to you why and what they ought to do.