5101:1-39-07 Medicaid: transfer of resources.

(A) This rule defines the treatment of a transfer of resources.

(B) Definitions.

(1) "Administrative agency" means the county department of job and family services, the Ohio department of job and family services, or other entity that determines eligibility for a medical assistance program.

(2) "Assets" are defined in rule 5101:1-39-05 of the Administrative Code.

(3) The "baseline date" means the first date upon which the individual has both applied for medicaid and is institutionalized.

(a) When an individual is already a medicaid recipient and becomes institutionalized, the baseline date is the first day of institutionalization.

(b) The baseline date for individuals already in receipt of medicaid and applying for a home and community-based services waiver (HCBS) is the signature date on the JFS 02399 "Request for Home and Community-based Services (HCBS)" (rev. 1/2006), if the administrative agency receives the signed and dated form within five working days from the date of the signature on the JFS 02399. If the administrative agency receives the JFS 02399 after the fifth working day, the baseline date shall be the date the administrative agency received the JFS 02399.

(c) The baseline date for individuals not in receipt of medicaid, who are applying for HCBS, is the signature on the JFS 02399 if both of the following conditions are met:

(i) A signed and dated JFS 02399 is received within five working days from the date of the signature on the JFS 02399; and

(ii) A signed and dated JFS 07200 "Request for Cash, Food Stamp, and Medical Assistance" (rev. 10/2006) is received within thirty calendar days from the signature date on the JFS 02399.

(d) The baseline date for individuals, who are not in receipt of medicaid and are applying for the program of all inclusive care for the elderly (PACE), is the signature date on the JFS 02398 (rev. 8/1999) "Program of All Inclusive Care for the Elderly (PACE) Referral" if both of the following conditions are met:

(i) A signed and dated JFS 02398 is received within five working days from the date of the signature on the JFS 02398; and

(ii) A signed and dated JFS 07200 is received within thirty calendar days from the signature date on the JFS 02399.

(4) "Fair market value" is defined in rule 5101:1-39-05 of the Administrative Code.

(5) An "improper transfer" means a transfer on or any time after the look-back date, as defined in paragraph (B)(9) of this rule, of a legal or equitable interest in a resource for less than fair market value for the purpose of qualifying for medicaid, a greater amount of medicaid, or for the purpose of avoiding the utilization of the resource to meet medical needs or other living expenses.

(6) "Income" is defined in rule 5101:1-39-08 of the Administrative Code.

(7) "Individual," as used in this rule, includes the applicant/recipient of a medical assistance program, as well as:

(a) The applicant/recipient's spouse;

(b) A person, including a court or administrative body, with legal authority to act in place of, or on behalf of, the individual or the individual's spouse; and

(c) Any person, including a court or administrative body, acting at the direction or upon request of the individual or the individual's spouse.

(8) "Long term care facility (LTCF)" means a medicaid-certified nursing facility, skilled nursing facility, or intermediate care facility for persons with mental retardation as defined in division 5101:3 of the Administrative Code.

(9) The "look-back date" means the earliest date on which a penalty for transferring assets for less than fair market value can be assessed. The look-back date is sixty months prior to the baseline date.

(a) When an individual has multiple periods of institutionalization or has made multiple applications for medicaid, whether the applications were approved or denied, the look-back date is based on the first date upon which the individual has both applied for medicaid and is institutionalized.

(b) Each individual has only one look-back date regardless of the number of times the individual has been institutionalized, applied for medicaid, transferred assets, or been eligible for medicaid.

(10) The "look-back period" begins with the baseline date and ends with the look-back date.

(a) Transfers during the look-back period must be examined to determine whether the transfer was improper and subject to a restricted medicaid coverage period.

(b) Improper transfers that occur prior to February 8, 2006 and during the look-back period are subject to a restricted medicaid coverage period if either of the following conditions exist:

(i) The improper transfer, other than a transfer of a trust, was made within thirty-six months prior to the baseline date; or

(ii) The improper transfer of a trust was made within sixty months prior to the baseline date. The treatment of a trust is defined in rule 5101:1-39-27.1 of the Administrative Code.

(c) Improper transfers that occur on or after February 8, 2006 and during the look-back period are subject to a restricted medicaid coverage period.

(d) Transfers after the baseline date must be examined to determine if they are improper and subject to a restricted medicaid coverage period .

(11) "Resources" are defined in rule 5101:1-39-05 of the Administrative Code.

(12) "Restricted medicaid coverage" means the period of time an individual is ineligible for nursing facility payments, a level of care in any institution equivalent to that of nursing facility services and home or community-based services furnished under a waiver and PACE.

(13) A "spouse" means a person who is considered legally married to another under Ohio law.

(14) A "transfer" means any action or failure to act which has the effect of changing an ownership interest of an asset from the individual to another person, or of preventing an ownership interest the individual would otherwise have enjoyed. This includes any direct or indirect method of disposing of an interest in property.

(C) The following types of transfers are presumed to be improper transfers for less than fair market value:

(1) Any transfer that reduces the individual's resources and brings the value of their remaining resources within the resource limitation;

(2) Any transfer that has the effect of safeguarding future eligibility by divesting the individual of property that could otherwise be sold and the proceeds then used to pay for support and medical care for the individual;

(3) Any transfer of income-producing real property; or

(4) Any transfer by an individual of an exempt home as defined in Chapter 5101:1-39 of the Administrative Code, whether prior to or after the medicaid application date.

(5) For an asset to be considered transferred for fair market value or to be considered to be transferred for valuable consideration, the consideration received for the asset must have a monetary value.

(6) A transfer for love and consideration is not considered a transfer for fair market value. Clear and convincing evidence is required to rebut the presumption that it is an improper transfer.

(D) Rebutting the presumption of an improper transfer.

(1) The individual may rebut the presumption established under paragraph (C) of this rule. The individual must first provide a full written accounting and documentation of the transfer which clearly explains the following:

(a) The purpose for transferring the resource; and

(b) The attempts to dispose of the resource at fair market value; and

(c) The reasons for accepting less than fair market value for the resource; and

(d) The individual's relationship, if any, to the person to whom the resource was transferred.

(2) The individual has the burden of rebutting the presumption of improper transfer by clear, convincing, and credible evidence.

(a) The evidence may include, but is not limited to: any documentary evidence such as contracts, realtor agreements, sworn statements, third party statements, medical records, financial records, court records, and relevant correspondence.

(b) Evidence which is provided must be reviewed by the administrative agency to determine if it is clear, convincing and credible.

(c) Evidence that is not clear, convincing and credible does not rebut the presumption of an improper transfer.

(3) The occurrence after a transfer of the resources of one or more of the following, while not conclusive, may indicate resources were transferred exclusively for some purpose other than establishing medicaid eligibility:

(a) Traumatic onset of disability or blindness (e.g., due to traffic accident); or

(b) Diagnosis of a previously undetected disabling condition.

(4) If the presumption of improper transfer is not overcome by the individual's rebuttal, the administrative agency must restrict medicaid coverage if the individual is otherwise eligible for medicaid.

(E) The following transfers for less than fair market value shall not be considered an improper transfer:

(1) The individual may transfer the home, as defined in rule 5101:1-39-31 of the Administrative Code, that is still considered the principal place of residence in accordance with Chapter 5101:1-39 of the Administrative Code to any of the following individuals:

(a) The individual's spouse, provided:

(i) The transfer is for the sole benefit of the spouse; and

(ii) The individual's spouse does not subsequently transfer the home for less than fair market value; and

(iii) Any transfer of the home by the spouse on or after the look-back date shall be reviewed by the administrative agency under the transfer of resources provisions in this rule; and

(iv) The amount of the transfer is equal to one hundred per cent of the value of the property established by the county auditor at the time of the transfer, less any amount or portion of the property that is not transferred.

(b) His or her child under the age of twenty-one;

(c) His or her child age twenty-one or over who is blind or permanently and totally disabled as defined in Chapter 5101:1-39 of the Administrative Code.

(d) The individual's adult child who was residing in the home for at least two years immediately before the date the individual becomes institutionalized, and who provided care to the individual which permitted the individual to reside at home, rather than in an institution or facility. A JFS 03697 "Level of Care (LOC) Assessment" (rev. 4/2003) must be completed to determine if the individual would have required institutionalization from the beginning and throughout the two-year period if the adult child had not provided personal care.

(e) The individual's sibling who has an equity interest (must be a documented, legal interest) in the home and was residing in the home for at least one year immediately before the individual became institutionalized.

(2) The individual may transfer resources other than a home, subject to paragraph (F) of this rule, as follows:

(a) To the individual's spouse or to another for the sole benefit of the individual's spouse.

(b) From the individual's spouse to another for the sole benefit of the individual's spouse.

(c) To the individual's child, or to a trust established solely for the benefit of the individual's child, who is blind or permanently and totally disabled as defined in Chapter 5101:1-39 of the Administrative Code.

(d) To a trust established for the sole benefit of an individual under sixty-five years of age who is blind or permanently and totally disabled as defined in Chapter 5101:1-39 of the Administrative Code.

(F) As used in this rule, a "transfer for the sole benefit" is a transfer that cannot, under any circumstance, benefit any individual or entity except the spouse, blind or disabled child, or disabled individual, at the time of the transfer or at any time after the transfer.

(1) In order for a transfer to be considered for the sole benefit of the spouse, blind or disabled child, or disabled individual, the entity that receives or holds the transferred resource must, by the explicit terms of a contract, trust, or other binding instrument, be required to expend all of the transferred resources for the benefit of the individual during that individual's life expectancy. When the contract, trust or other binding instrument does not contain such a requirement, the provisions governing transfers for the sole benefit do not apply. A transfer for the sole benefit of the spouse, blind or disabled child or disabled individual in which there is a provision within the trust, contract or other binding instrument to expend all of the transferred resources may provide for other beneficiaries.

(2) A trust may provide for reasonable compensation for a trustee to manage the trust, as well as for reasonable costs associated with managing the trust or managing the property held in the trust. In determining what is reasonable, the administrative agency shall consider the amount of time and effort involved in managing the trust, as well as the prevailing rate of compensation for trustees administering trusts of similar size and/or complexity.

(G) Any transfer between spouses in order to comply with the medicaid community spouse resource allowance (CSRA) computed pursuant to Chapter 5101:1-39 and Chapter 5101:6-7 of the Administrative Code may not be applied inconsistently with the rules setting limits on the CSRA or the minimum monthly maintenance needs allowance (MMMNA).

(1) Any amount of a couple's resources exceeding the CSRA must be used for the benefit of the institutionalized spouse and/or community spouse.

(2) Any amount of a couple's resources exceeding the CSRA may not be transferred to the community spouse or to another for the sole benefit of the community spouse unless permitted in a hearing decision issued under Chapter 5101:6-7 of the Administrative Code.

(3) Any amount of a couple's resources exceeding the CSRA may not be converted to another form for the purpose of generating additional income for the community spouse unless permitted in a hearing decision issued under Chapter 5101:6-7 of the Administrative Code.

(4) Transfers in excess allowed by this rule, must be presumed an improper transfer.

(H) Verification of property transfers.

(1) The administrative agency shall determine at the time of application, reapplication or upon discovery whether the individual executed a transfer of real or personal property and, if so, whether the transfer was an improper transfer.

(2) The administrative agency shall initiate an inquiry regarding potential improper transfers if any source of information tends to show a transfer has occurred.

(3) The individual is obligated to obtain documentation verifying any transfer and the details of any exchanges or transactions; however the administrative agency, if requested, shall assist the individual in their attempt to obtain documentation verifying any transfer and the details of any exchanges or transactions. Appropriate documentation may include but is not limited to the following:

(a) Deeds and mortgage statements.

(b) True and correct copies of federal income and gift tax returns that have been filed singly or jointly during the five tax years prior to the application.

(i) At reapplication, the individual may be required to update the returns by providing true and correct copies of all federal and/or state income and gift tax returns, amended tax returns, and schedules that have been filed since the initial application or last reapplication.

(ii) If the individual has not retained copies of federal income and gift tax returns and schedules, the individual must secure copies from the internal revenue service, the preparer of the returns, the accountant completing the return, or any other source where the returns are on file.

(iii) If the individual states that they have not filed federal tax returns for some or all of the required years, the individual's statement is sufficient as long as there is no available information to the contrary.

(iv) When there is some indication that the individual received income or made a substantial gift during any of those years, the individual must provide copies of tax returns or must provide a statement from the internal revenue service confirming the individual did not file tax returns for those years.

(4) The administrative agency shall utilize tax returns only to assist in establishing whether the individual executed an improper transfer.

(5) The administrative agency must retain copies of the tax returns and schedules in the individual's case record. The original returns provided by the individual shall be returned subsequent to verification of any transfers of real or personal property. The tax returns, schedules, and all information contained in them shall be kept confidential in order to meet the protection requirements of the individual's right to privacy.

(I) Restricted medicaid coverage due to improper transfers.

(1) If any individual, as defined in paragraph (B)(7) of this rule, applying for or in receipt of LTCF services, HCBS or PACE, improperly transfers resources, the individual, who is applying for or in receipt of LTCF services, HCBS or PACE will be eligible only for restricted medicaid coverage.

(a) The restricted medicaid coverage period is set by the terms of this rule unless otherwise specified or qualified by the provision of another rule.

(b) If the presumption of improper transfer is not overcome by the individual's rebuttal, the administrative agency shall approve restricted medicaid coverage if the individual meets all other eligibility requirements.

(2) The administrative agency must scrutinize all medicaid individuals for improper transfers since an individual may enter a LTCF or qualify for HCBS or PACE at a later date.

(3) If the administrative agency determines that a non-institutionalized medicaid individual improperly transferred resources, the administrative agency shall employ a tracking system to keep an account of these individuals should they apply at a later date for LTCF payment assistance, HCBS or PACE. If the individual enters a LTCF or is in receipt of HCBS or PACE within sixty months from the date of the improper transfer, a restricted medicaid coverage period shall be calculated in accordance with this rule.

(J) Calculating the restricted medicaid coverage period.

(1) For improper transfers of resources that occur prior to February 8, 2006, the period of restricted medicaid coverage is determined as follows:

(a) Divide the total uncompensated value of the transferred resources as of the date of application by the average monthly private pay rate for a LTCF at the later of the date of application or the date of the transfer. There is no limit to the amount of time a period of restricted coverage may run.

(b) The period of restricted coverage begins the first day of the month the resources were transferred unless the exception in paragraph (J)(1)(c) of this rule applies.

(c) When an additional improper transfer occurs prior to February 8, 2006 and during an existing period of restricted medicaid coverage, the penalty period for the additional improper transfer cannot begin until the existing penalty period has expired.

(2) For improper transfers of resources that occur on or after February 8, 2006, the period of restricted medicaid coverage is determined as follows:

(a) Add the total uncompensated value of all improperly transferred resources.

(b) Divide the total uncompensated value of all improperly transferred resources by the average monthly private pay rate for a nursing facility in Ohio in effect at the date of application. This quotient is the total restricted medicaid coverage period in months.

(c) Multiply the average monthly private pay rate for a nursing facility in Ohio by the number of whole months determined in paragraph (J)(2)(b) of this rule. The product is the whole months' improper transfer amount.

(d) Subtract the whole months' improper transfer amount determined in paragraph (J)(2)(c) of this rule from the total uncompensated value of all improperly transferred resources. The remainder is the partial month restricted coverage amount for the final month of restricted medicaid coverage period. The number of whole months from paragraph (J)(2)(c) of this rule and the partial restricted coverage month in paragraph (J)(2)(d) of this rule are added together for the total number of months of restricted medicaid coverage.

(e) The final partial month amount determined in paragraph (J)(2)(d) will be added to the patient liability in the first month of eligibility for payment for long term care services, HCBS, or PACE. Reference rule 5101:1-39-24 of the Administrative Code for the determination of the patient liability.

(f) There is no time limit for a period of restricted medicaid coverage to run.

(g) The administrative agency shall not round down, or otherwise disregard, any fractional restricted medicaid coverage period.

(K) Determining the beginning date of a restricted medicaid coverage period.

(1) For improper transfers that occur prior to February 8, 2006:

(a) The restricted medicaid coverage period begins the first day of the month assets were transferred for less than fair market value unless the exception in paragraph (K)(1)(b) of this rule applies.

(b) The penalty period for additional improper transfers, occurring during an existing restricted medicaid coverage period, cannot begin until the existing penalty period has expired.

(2) For improper transfers that occur on or after February 8, 2006, the restricted medicaid coverage period begins the later of:

(a) The first day of the month during or after which assets were transferred for less than fair market value; or

(b) The date on which the individual is eligible for medical assistance and would otherwise be receiving long term care services in a LTCF, under an HCBS waiver program, or under the PACE program, based on an approved application for such care but for the application of the penalty period.

(c) If additional improper transfers occur during an existing restricted medicaid coverage period, the period must be recalculated to include the uncompensated value of the additional improperly transferred resources.

(L) Notification.

(1) The administrative agency shall deny or terminate medicaid payment to the facility, HCBS waiver or PACE eligibility by using the appropriate form or an electronic eligibility system equivalent when an improper transfer has occurred.

(2) The administrative agency shall issue the appropriate form or an electronic eligibility system equivalent to authorize all other medicaid covered services.

(3) The denial or the termination notice shall note the date medicaid payment to the facility shall start if all other eligibility criteria is met.

(4) The administrative agency must issue proper notice and hearing rights outlined in division 5101:6 of the Administrative Code.

(M) Assets transferred for less than fair market value are returned to the individual.

(1) When all assets transferred are returned to the individual, no penalty for transferring assets can be assessed.

(2) Return of the assets in question to the individual leaves the individual with assets which must be counted in determining eligibility during the original restricted medicaid coverage period. Counting those assets as available may result in the individual being ineligible for medicaid for some or all of the original restricted medicaid coverage period, as well as for a period of time after the assets are returned. The administrative agency must redetermine eligibility for each month in the restricted medicaid coverage period and include the returned assets as an available resource unless the asset would have otherwise been considered an exempt asset. If an exemption does not apply, the asset is considered available to the individual until the total countable assets have been reduced to the appropriate resource limit.

(3) To void imposition of a restricted medicaid coverage period, all of the assets in question or their fair market value equivalent must be returned. If the asset was sold by the individual who received it, the full market value of the asset must be returned to the transferor, either in cash or another form that is commensurate with the original value.

(4) When only part of the asset or its equivalent value is returned, a restricted medicaid coverage period can be modified but not eliminated. For the purpose of computing an overpayment under rule 5101:1-38-20 of the Administrative Code, the returned asset or its equivalent must be considered an available asset beginning in the month the asset was originally transferred.

(N) Undue hardship.

(1) The individual, otherwise eligible for medical assistance, will not be subject to restricted medicaid coverage resulting from an improper transfer if restricted medicaid coverage will result in an undue hardship.

(2) An undue hardship exists when application of the restricted medicaid coverage would deprive the individual of the following:

(a) Medical care such that the individual's health or life would be endangered; or

(b) Food, clothing, shelter, or other necessities of life.

(3) Individual responsibilities.

(a) To be considered for an undue hardship, the individual must request the undue hardship in writing.

(b) An undue hardship exemption may be requested by the following:

(i) The individual;

(ii) The authorized representative; or

(iii) With the consent of the individual or authorized representative, the nursing facility in which the individual resides.

(c) The individual must document, to the satisfaction of the administrative agency, a good faith attempt was made to recover or make the resource available.

(d) The individual or facility making the request for an undue hardship exemption has the burden of proving all elements and requirements by clear, convincing, and credible evidence, including that an undue hardship exists or will exist and that a good faith effort was made to recover or make the resources available.

(e) When the individual resides in a LTCF, the individual or facility making the request for an undue hardship must prove the individual is in jeopardy of losing the food or shelter due to a planned discharge resulting from the imposition of a restricted medicaid coverage period. The individual will not be found to be in jeopardy unless both of the following are established:

(i) The individual or the individual's representative must first exhaust all legal remedies and appeals to challenge the planned discharge; and

(ii) The facility must document that it has exhausted all legal remedies to collect, reconvey, or recover the improperly transferred assets, including but not limited to actions authorized under section 1336.01 of the Revised Code, or any other similar law of another jurisdiction. The facility is not required to pursue a legal action if it can document the cost of such an action would exceed the gross value of the assets subject to recovery in a legal action.

(4) Administrative agency responsibilities.

(a) The administrative agency shall provide notice to the individual of the:

(i) Availability of an undue hardship.

(ii) Decision of a request for an undue hardship exemption due to a transfer of assets that results in a restricted coverage period during which medicaid payment for long term care services will not be made.

(b) The administrative agency, may on its own initiative, consult with the county prosecutor to determine whether a civil or criminal action may be brought to recover the transferred assets or to compel restitution.

Replaces: 5101:1-39-07

Effective: 10/20/2006
R.C. 119.032 review dates: 10/01/2011
Promulgated Under: 111.15
Statutory Authority: 5111.01 , 5111.011
Rule Amplifies: 5111.01 , 5111.011
Prior Effective Dates: 9/3/77, 7/1/82, 7/15/84, 1/1/85 (Emer.), 4/1/85, 11/1/86 (Emer.), 12/22/86, 7/1/87 (Emer.), 8/3/87, 1/1/90 (Emer.), 4/1/90, 10/1/90, 4/1/95 (Emer.), 6/11/95, 3/15/96 (Emer.), 6/1/96, 11/7/02