Payments to a Nursing Home for Care by an Adult Child for the Benefit of his Parent who was a Medicaid Applicant is Held to Be a Countable Resource in Determining Medicaid Eligibility

On September 30, 2008, NJ Administrative Law Judge Stephanie M. Wauters issued a written opinion in a case entitled E.S. vs. Division of Medical Assistance and Health Services and Monmouth County Board of Social Services, OAL Docket No. HMA 14-08, ruling that the payments to a nursing home for care by a Medicaid applicant’s son for the applicant‘s benefit were countable resources in determining the applicant’s eligibility for Medicaid and the start date of the transfer penalty period.

Petitioner was a 91 year old nursing home resident. On September 6, 2006, petitioner transferred $42,053 to her son as a gift, thereby leaving her with no assets and making her financially eligible for Medicaid as of October 1st. Petitioner then applied for Medicaid benefits on September 20, 2006. Respondent calculated a 6 month and 9 day gift penalty based on the amount of the gift, resulting in an eligibility start date of April 9, 2007. Using the gifted assets, petitioner’s son paid the nursing home each month for petitioner’s care. These payments were made using the gifted funds from October 1, 2006 to February 1, 2007 and covered petitioner’s care through the entire month of February. Petitioner and respondent agreed that the payments made by petitioner’s son to the nursing home ($30,488) would be considered his returning the gifted assets to petitioner, thereby reducing the penalty period. The remaining funds ($11,605) were treated as an improper gift and both parties agreed that a reduced transfer penalty of one month and nine days of ineligibility would be applied to petitioner’s Medicaid application. Respondent concluded that petitioner became financially eligible on March 1, 2007 and that the penalty period would delay her eligibility till April 9th. Petitioner disagreed, arguing that the penalty period should have been applied beginning on October 1, 2006, and that the Medicaid benefits should be available to her beginning on March 1st.

ALJ Wauters ruled in favor of respondents on a number of bases. First, Judge Wauters held that respondents were incorrect in reducing the Medicaid penalty period based upon the return of the gifted assets. Although the administrative code indicates that gifted assets which are used “for the medically necessary care of the transferor are exempted from the imposition of a penalty period”, the judge held that the “language only pertains to situations where the transferred assets were spent for the care of the transferor during the look back period but prior to the application for Medicaid.” (emphasis in original)

Second, Judge Wauters held that, because the son paid the nursing home bill upon receipt of a bill sent by the facility at the end of each month for services to be rendered by the facility in the following month, each payment was an available resource to the Medicaid applicant because the monies paid were not legally due to the facility until after services were rendered.

The E.S. vs. Division of Medical Assistance and Health Services and Monmouth County Board of Social Services case can be found here  – es-v-dmahs