Complex rules make a denial a real possibility which could be financially devastating for the applicant and their family. With nursing home costs rising each year, the National average now is $80,000 and in the Northeast where we’re located it’s even higher with NJ at $116,000, NY at $130,000 and Mass. at $129,000.
At those rates it won’t take long for a family to use their entire savings on the cost of care for a parent. Medicaid has become the largest single payer of nursing home costs in the nation with approx. 51% of costs paid by Medicaid. However, they do have extremely complex rules and guidelines for eligibility and qualification. There are a lot of myths floating around also about the eligibility process of Medicaid also.
A Medicaid application can be denied for several reasons, some of which can be resolved quicker than others [keep in mind these reasons are generally more common when family members attempt to navigate the often confusing Medicaid process].
1. Incomplete application due to missing documents – a very common reason, mostly due to the individual completing the application not being aware of all of the rules and guidelines of what is required, an incomplete application is usually the result of missing documentation such as bank or investment statements, life insurance information, retirement income information, property information [both personal and real] or missing supporting documentation. The average Medicaid application packet may contain up to 1,000 pages of documentation before it’s complete and approved. These documents also have to be submitted in a timely manner, if Medicaid thinks that you are not cooperating, it can deny your application for failing to cooperate. If this happens, you may have to start your application over again once you have your documents in hand. This will delay the date you become eligible for Medicaid even longer.
2. Medicaid caseworkers themselves – this happens more than you think, caseworkers will make mistakes also, they will lose documents given to them, they may misinterpret some of the rules themselves or have been told by a supervisor to interpret a rule a certain way which is technically incorrect, they sometimes give improper advice to people, etc. they’re usually always overworked seeing dozens of applications per week in some areas.
3. Over resourced – another very common reason, this can occur if there are assets not known to the person completing the application or the individual completing the application is unaware of what is an exempt asset, the financial limits on those exempt assets [such as max. face value limits of whole life insurance] or how to convert an non exempt asset to an exempt asset. Savings accounts or checking accounts are easy indicators that a person is over the asset level, but other less used accounts [such as CDs, mutual funds, life insurance policies, etc.] are at times difficult to discover for a family member. While some may find it hard to believe that such accounts could be “forgotten,” we frequently encounter issues like this with the elderly who are seeking long term care. Many have split their assets between several accounts over the years, and passbooks and insurance policies can be lost or forgotten over the years when they are not used on a regular basis.
Note: what NOT to do if an individual is over resourced:
- Do not feel that you have to spend the money just to get the individual qualified. Many people will give false statements about how the money should be used. Consult a Medicaid Specialist, the money that the individual has can be saved and used for the benefit of the family and does not have to be spent as many would let you to believe. The rules for single individuals and married couples differ also, You don’t have to be destitute to qualify for Medicaid benefits.
- Do not transfer any money or assets without the guidance of an expert. Medicaid has strict rules on how and when this can be done.
- Do not co-mingle funds or open a joint account with the Medicaid applicant.
4. Unqualified or uncompensated Transfers – when an applicant transfers or disposes of a countable asset within the 60 months preceding the application submission it will be scrutinized by the Medicaid caseworker. If any assets were given away or sold for what Medicaid rules consider “less than their fair market value” [meaning assets were sold or given away without the applicant receiving fair consideration in return] it will usually result in a disqualification of benefits or a period of ineligibility [this includes disposing of property or cash]. Sometimes these transfers are intentional to try to protect the asset from the nursing home and other times they are not intentional such as,
- a Grandmother giving her granddaughter $5,000 to help buy a new car.
- family members not knowing the rules and transferring or co-mingling bank accounts.
- Transferring the family home to a family member.
- Monetary “gifts” allowed by the IRS tax laws but not allowed by Medicaid.
What do I do if I receive a denial notice?
If you receive a denial notice take it very seriously, Do not discard it, a denial does not necessarily mean the process is over, the individual may still have opportunities to become qualified for benefits.
The denial notice will stipulate the reason for the denial. If it is because of missing documents, it will also state which documents they need. In such a case you must do what’s necessary to locate the documents and give them to the caseworker. If it’s due to being over-resourced, you must convert the countable resources to exempt assets. If it’s due to the caseworker making a mistake or other issues with the caseworker you’ll probably need the assistance of a professional to determine this and speak with the caseworker. If it’s due to an improper transfer, some states allow you to return the asset that was transferred and it will be corrected [providing it doesn’t then put you over-resourced, if so, then you’ll have to contend with that also]. Some states allow you to return a portion of the transfer and it will reduce the penalty, others will not, it’s either all or nothing. Some states will approve you with a penalty initiated while others will simply deny the application and you must then correct the transfer and re-apply.
Many times, if you or your advocate will stay in contact with the caseworker, they may communicate with you any issues they are having with the application so you have the chance to correct it before the application is denied.
A denial can be appealed in what is known as a “fair hearing”. States have to obey federal deadlines about issuing decisions about Medicaid applications, they must issue the notice within the specified guidelines.
What the notice will include.
- The notice must tell you that you have the right to a hearing to appeal the denial, how to request a hearing, and that you have the right to represent yourself, hire an attorney, or have a spokesperson (like a friend or relative) help you. The notice must also give the reasons for denying your application and the notice must include the specific rules your state Medicaid agency is using to deny you eligibility.
The appeal deadline is one of the most important pieces of information on your appeal notice. You must request your appeal within the deadline, or you will be required to justify a late appeal. States have different deadlines, but all are required to be no more than 90 days from the date that the denial notice is mailed.
Do not discard the denial notice, a denial does not necessarily mean the process is over. The individual may still have opportunities to become qualified for benefits.
The hearing will take place before a hearing officer or an Administrative Law Judge [ALJ]. The instructions on how to do so will be included with your denial notice.
If this were to occur we strongly recommend that you hire a professional advocate or an attorney to be sure the appeal is filed in a timely manner with the proper agency and it is argued properly at the hearing.
After the hearing
- You will receive written notice of the hearing officer’s decision. If you lose your hearing, the notice will tell you how to appeal. Depending on the state’s particular procedures, at your next appeal, you may not get another chance to testify and bring witnesses [at what's known as an evidentiary hearing]. Instead, you may have an appeal in which you are limited to making written arguments about evidence that came out at the first appeal hearing. Check your denial notice carefully to find out what the appeal processes are in your state.
If you win your hearing and qualify for Medicaid, the state Medicaid agency will apply your Medicaid coverage retroactive to the date that you became eligible. In most circumstances, that will be the date that you filed an application for Medicaid. Keep track of any medical expenses that you incur from the date of your Medicaid application so that you can notify the state Medicaid agency of those expenses when you qualify for benefits.
If you’ve received a denial notice contact us immediately, we may be able to help
PH: 855.471.6771 Email: firstname.lastname@example.org
as with all of our posts, the above is meant for information purposes only and is not to be construed as legal advice, consult a professional to discuss your individual situation.