Medicaid - Long Term Care in Missouri: An Update Since OBRA 1993
David G. Lupo1
This article is to update the article by Mr. Lupo in the March-April 1994 edition of the Journal of The Missouri Bar. What has happened since OBRA-93?
2
A few basics should be set forth for those who are not familiar with the Medicaid laws relating to institutional long-term skilled nursing care. This article will not cover non-institutional Medicaid benefits. The purpose is to assist in understanding the changes that have taken place by reason of changes in state and federal laws and their respective policy decisions.
There are two requirements for Medicaid long-term care that must be met: financial and medical. The primary requirement most clients and elder law attorneys focus upon is financial. Mathematical computations are essential tools. Medicaid planning and eligibility not only effect the individual’s estate planning but also their family members.
Financial - For Eligibility Purposes
Unmarried Person: Cannot have assets in excess of $1,000; $1,500 exemption of life insurance (or burial); one automobile, wedding rings, fixtures, furniture and the applicant's residence are exempt.3
Married Persons: Although unusual, there are occasions where both spouses seek to qualify for Medicaid. Total non-exempt assets cannot exceed $2,000. The usual situation is where one spouse seeks to qualify for Medicaid. That spouse is identified as the “institutional spouse.” The healthy spouse is identified as the “community spouse.”4
Since September 30, 1989, the institutional spouse could assign his/her share of the assets over to the community spouse prior to application for Medicaid. The deemed share of the assets that can be assigned is left to each state, with some limitation. To prevent “spousal impoverishment,” Missouri adopted its minimum community spouse resource allowance (CSRA). The CSRA must be adjusted annually for changes in the cost of living5 (2006 minimum - $19,908; 2006 maximum - $99,540).
Missouri's Family Support Division (FSD) (formerly the Division of Family Services) requires an assessment of the married couple’s assets as of the date of institutionalization. The date of institutionalization is the month the spouse occupies a licensed Medicaid (vendor) bed. Missouri, as a matter of policy, divides the total non-exempt assets on date of institutionalization by one-half.
Examples:
Lower Limits: A couple has $18,000 total non-exempt assets. Since this is less than $19,908, the FSD will allocate the entire amount to the community spouse.
If the combined assets are $25,000, the excess of $5,092 ($19,908) (2006) will be considered assets of the institutional spouse and must be spent down to $999.
Upper Limit: Couple has combined assets of $200,000. Divide this by two. Since only $99,540 (2006) can be allocated to the community spouse, the balance of $100,460 will be allocated to the institutional spouse. However, contrary to what certain nursing home facilities advise a resident's family, the $100,460 can be used to pay the expenses of the community spouse – clothing, rent, medication, trips, etc.6 If we stopped there, it is obvious that the institutional spouse, with a spend down of $100,460, will not be eligible for Medicaid for a long period of time.
The MMMNA
In addition to the CSRA to prevent “spousal impoverishment,” there are provisions for the community spouse minimum monthly maintenance needs allowance (MMMNA), plus any “excess shelter allowances.”7 There is a maximum amount unless there is a court intervention.8
2005 minimum - $1,604 (effective to July 1, 2006)
2006 maximum - (effective Jan. 1, 2006 - $2,489)
2005 Shelter Standard - $481 (effective to July 1, 2006).
EXAMPLE:
What if the community spouse's income was as follows:
| Social Security per month: |
$450.00 |
| Income from $99,540 (2006) allocated to her from the total assets of $200,000, @ 4% (1-year US Treasury Bonds) - per month |
$331.80 |
| Total income per month |
$781.80 |
| Shortfall from MMMNA ($1,604 - $781.80) |
$822.20 |
Prior to February 8, 2006, the In re Bryant case9 established that the administrative hearing officer would first reassign assets from the $100,460 originally allocated to the institutional spouse. A sufficient amount would be allocated to provide monthly income to the community spouse to meet her MMMNA. (In this example, all the assets assigned to the institutional spouse are reassigned to the community spouse).
$100,460 @ 4% - monthly income $334.86
Plus above monthly income $781.80
Total income for community spouse $1,116.66
Shortfall from the MMMNA $487.34
Upon appeal to a hearing officer, the hearing officer would then assign sufficient income of the institutional spouse to the community spouse to make up the difference. The institutional spouse would be eligible immediately for Medicaid benefits. This has been called the “resources first” interpretation of 42 U.S.C. § 1396r-5(e)(2)(c).10
Most states had adopted the “income first” interpretation of said statute. The income of the institutional spouse would be assigned first to the community spouse to provide for her MMMNA. If there was not sufficient income to provide for the MMMNA, only then would there be a reallocation and reassignment of any of the $100,460 assets over to the community spouse.
The disputed issue was whether 42 U.S.C. § 1396r-5(e)(2)(c) was ambiguous. Could states follow either interpretation? This issue finally reached the United States Supreme Court in 2000 and was decided on February 20, 2002.11 By a 6-3 majority, the Court ruled that the statute was ambiguous. Each state can decide whether to use the “resource first” or the “income first” approach.12
The Supreme Court did recognize the effect of the differences between the two approaches.
1. In the “Income First” Approach:
a) The Social Security and any pension of the institutional spouse would first be paid to the community spouse to meet her MMMNA.
b) The resources of the institutional spouse must be spent down before the institutional spouse could be eligible for Medicaid benefits.
c) Upon the death of the institutional spouse, the community spouse loses her Social Security if it was smaller than that of her deceased spouse. The resources originally assigned to the institutional spouse and spent down to become eligible for Medicaid cannot be recovered. The community spouse may be living just on her husband's Social Security.
2. In the “Resources First” approach:
a) As shown by the example above, the $100,460 deemed assigned to the institutional spouse by the division of assets is first reassigned to the community spouse.
b) The $334.86 income from the $100,460 would not be affected by the death of the institutional spouse. No need to spend down.
c) The Social Security and pension check of the deceased institutional spouse would be paid over to the widow.
d) With the income from the investments, the Social Security and pension checks, the community spouse certainly would have a better chance of avoiding “spousal impoverishment.”
The Deficit Reduction Act of 2005 signed by President Bush on February 8, 2006 requires all states to use the “income first” approach.13
Basic Medicaid Planning Affected By Changes In The Law, Statutes And Policy
1. One of the planning techniques used before August 28, 2004 was the use of beneficiary deeds and paid on death accounts.
Under § 461.300.8(1), RSMo Supp. 2005, it was necessary to be a creditor “immediately prior to the decedent's death. . . .”
Under § 1917 [42 U.S.C. § 1396p(a)(b)], a state could seek Medicaid recovery only upon the death of the Medicaid recipient. Therefore, a question arose whether the state of Missouri was a “creditor” and could recover against property passing under a beneficiary deed or P.O.D. accounts.
Effective August 2004, § 461.300, RSMo, was amended to read as follows:
10. As used in this section, the following terms mean:
(1) “Creditor”, any person to whom the decedent is liable, which liability survives whether arising in contract, tort, or otherwise, and any person to whom the decedent's estate is liable for funeral expenses and the reasonable cost of a tombstone;
Since the home is exempt for eligibility purposes, it becomes the largest asset available for Medicaid recovery by the state of Missouri. A number of elder law attorneys have raised the issue of whether a statute can retroactively apply to a liability arising from a contract, tort or otherwise.14 Another issue raised is whether the state can recover against the family home when the community spouse did not contribute to the purchase of the property. Section 461.300.10(4), RSMo Supp. 2005 reads, in part, as follows:
(4) “Recoverable transfer”, a nonprobate transfer of a decedent's property under sections 461.003 to 461.081 and any other transfer . . . that was subject to satisfaction of decedent's debts. . . but only to the extent of the decedent's contribution to the value of such property. (Emphasis supplied.)
2. Another planning technique used before August 28, 2005, was as follows:
All the assets were transferred to the community spouse. The transfer would be completed before application for Medicaid. Transfer of assets between spouses is not penalized.15 The community spouse may have $19,908 (2006) in non-exempt assets. The balance of the assets were invested in an irrevocable non-transferable immediate annuity. The term of the annuity could not exceed the life expectancy of the community spouse based upon the Social Security life tables. The beneficiaries were usually the children of the married couple. Monthly payments from the annuity, of income and principal, were paid to the community spouse. Upon her death, the balance due on the annuity, if any, was paid directly to the named beneficiaries.
Missouri continued its attack on Medicaid by making extensive changes in §§ 208.010, et seq. RSMo. By adding § 208.212, RSMo Supp. 2005, investments in annuities are no longer attractive.
Section 208.212 makes a large departure from the previous policy of Missouri by requiring that the state of Missouri must be named as “secondary or contingent beneficiary status.”16 Congress then passed the Deficit Reduction Act of 2005, signed by the president on February 8, 2006. This act made it mandatory that all states must be named as the primary beneficiary under an annuity upon the death of the annuitant. Although the federal and state statutes uses the term “applicant,” the state of Missouri requires that a community spouse, investing in an annuity, must also name the state of Missouri as the primary beneficiary upon the death of the annuitant, payee.17
Subsection (2) of § 208.212, RSMo Supp. 2005, adds additional limitation.18 The question raised by some elder law attorneys is whether a community spouse is an applicant. Since the passage of the Deficit Reduction Act of 2005, the ambiguity of subsection (3) of § 208.212, RSMo, is no longer applicable.19 Section 208.010.12, RSMo, was adopted, effective August 28, 2005.20
It will be the community spouse (usually the wife) who will suffer.
As set out in the example above, with a $200,000 non-exempt estate, $100,460 will be deemed assigned to the institutional spouse. In most cases, the husband's Social Security, pension, etc. income will bring her income up to the MMMNA. Therefore, the community spouse cannot be reassigned any of the $100,460 for her MMMNA. It must be spent down before the institutional spouse becomes eligible for Medicaid. However, the technique of transferring all the assets to the community spouse, who then invests the assets in an annuity, may still be viable under certain conditions: (1) long life expectancy of community spouse under the Social Security tables; (2) short term of annuity – total payment of principal to the community spouse in two or three years.
3. A major exception to disapproval of self-settled trusts was OBRA-93 establishment of three “exempt” self-settled payback trusts.21 A self-settled trust is a trust funded by the assets of the Medicaid applicant.
Trust (d)(4)(A)
a) The applicant must be disabled and under the age of 65 years at the time the trust was created and funded.
b) The applicant is the sole beneficiary and the trust is established by the applicant's parent, grandparents, legal guardian or court.
c) The trust, after the death of the applicant, must repay the state of Missouri, from assets in the trust, up to the amount spent on the applicant by the state of Missouri.
d) Without review by The Missouri Bar Probate & Trust Law Committee or The Missouri Bar Elder Law Committee, the Missouri legislature in 1999 amended
§ 475.092 and § 475.093. The amendment allows the court, or other grantors, to establish a (d)(4)(A) trust. These amendments added two requirements not present in the federal (d)(4)(A) trust.22 Does “decedent's estate” mean “decedent's probate estate?” For Supplemental Security Income (SSI) purposes, the trust must provide for a named beneficiary. The term “estate” is not considered a named beneficiary.23 A disabled person could qualify under a (d)(4)(A) trust for Medicaid benefits, but lose his SSI benefits. Ingenious draftsmanship was required to balance these conflicting provisions. The Missouri legislature remedied this situation by amending § 475.092(2), RSMo, as set out in the 48-page S.B. 892, filed July 10, 2006. The proposed new section is partially set out:
upon such person’s death, after the payment of trustee’s fees, [the state of Missouri shall first receive all amounts remaining in the trust] . . . and, provided further, that any creditor of the [disabled] person . . . and, provided that such trust shall terminate . . . amounts remaining . . . shall be distributed to [such decedent’s estate], the remainder beneficiaries designated in the trust or as designated pursuant to exercise of a power of appointment. . . . (emphasis added).24
Missouri's “third party” trusts appear to be still viable.25 Third party trusts are funded by someone other than the Medicaid applicant. There are no requirements that third party trust must provide repayment back to the state of Missouri.
TRUST (d)(4)(B)26
TRUST (d)(4)(C)
These trusts are referred to as a pooled trust. The individual must be disabled so as to qualify for Supplemental Security Income (SSI) benefits. The trust is established and managed by a non-profit association. Each individual's funds are maintained in a separate account. The accounts are established by the parent, grandparent, legal guardian, or by a court. Even though there are separate accounts, for purposes of investment and management of funds, the principal is pooled. The funds may be disbursed “solely for the benefit of the named beneficiary of said trust.”27 In Missouri, the pooled trust is administered by the Missouri family trust.28 Upon the death of the beneficiary, there are elaborate subsections dividing the remaining assets between heirs, the charitable trust and the state of Missouri for recovery of Medicaid benefits paid.29
II. Recovery Of Assets From Estate Of The Deceased Medicaid Recipients
The federal law mandates that each state providing Medicaid benefits establish an estate recovery program. Missouri has expanded its recovery program under the state's attorney general's office. Discussed above were the changes in § 461.300, RSMo Supp. 2005, relating to beneficiary deeds and paid on death accounts. In 2005, the legislature added § 208.215.13, RSMo Supp. 2005, to the Medicaid statutes. The statute requires the Department of Social Services to file a lien on any real property (including the home) owned by a Medicaid recipient once approved for vendor benefits on or after September 1, 2005. The recipient must be permanently institutionalized and “cannot reasonably be expected to be discharged and return[ed] home.”30 At The Missouri Bar Fall Committee Meetings in September 2005, an assistant attorney general stated that a lien would be filed on an applicant's home or other assets immediately after being approved for Medicaid.
For property subject to the liens, the recipient must have:
1. Sole legal interest, or
2. A legal interest based upon co-ownership of the property which is the result of transfer of property for less than the fair market value within 30 months prior to the recipient's entering the nursing facility.31
The FSD issued its interpretive memorandum to all the county officers on October 11, 2005.32
Michael S. Kisling, the assistant attorney general, financial services division in Jefferson City, is the unit coordinator for estate recoveries. He has stated in seminars that the Attorney General’s office, as a matter of policy, is not at this time pursuing real estate titled in joint names, certain life estates or trusts with spendthrift clauses. There may be potential gift tax and penalty issues in creating life estates.32 However, life estates, with power in the life tenant to sell, assign or mortgage, will be subject to recovery. The state will pursue trusts that provide for payment to creditors.
A recent decision by the Eighth Circuit U.S. Court of Appeals held that a state's right to recover on a Medicaid lien from a liability settlement is limited to that portion of the settlement representing payment for past medical expenses.33 The U.S. Supreme Court granted certiorari in September 2005. On May 1, 2006, the Supreme Court affired the Eighth Circuit Court of Appeals. The respondent, Ahlborn, had settled an accident case for $550,000. It was stipulated by the state of Arkansas that their claim would only be $35,581. The Supreme Court held that the Medicaid laws did not authorize the state to assert a lien in excess of the stipulated amount.34
III. What Planning Is Still Available?
GIFTS
1. In November 1994, the Health Care Financing Administration (HCFA), now the Center for Medicare and Medicaid Services (CMS), issued its Transmittal 64. These were instructions to be placed in the state's Medicaid manual. Section 3258 related to transfer of assets for less than fair market value. Section 3258.5(D) allows a state the option of not imposing a penalty on assets transferred by an individual or spouse.35 Missouri had chosen, as a matter of policy, not to impose a penalty when the amount of the transfer is less than one-half of the monthly cost of nursing home care. The Deficit Reduction Act of 2005 may have eliminated all gifts as of February 8, 2006. The Family Support Division has stated that gifts made prior to February 8, 2006 will come under the old policies. All gifts made by an applicant after February 8, 2006 will incur a penalty. How the new law will be interpreted will be determined sometime in the future. Currently, there are four lawsuits challenging the DRA. The first suit, Zeigler v. Gonzalez,36 was filed in an Alabama federal district. Then came Public Citizen Org. v. U.S. District Court,37 in Washington, D.C., District Court. The third suit, One Simple Loan v. U.S. Dep’t of Educ.,38 was brought by two educational loan borrowers against the U.S. Department of Education in the Southern District of New York. The fourth suit, Conyers v. Bush, was brought by 11 Democratic members of the U.S. House of Representatives against President Bush and members of his cabinet. The claim of all four suits is that the DRA is in violation of Article 1, § 7, Clause 2 of the U.S. Constitution. That clause requires that the House and Senate pass an identical version of a bill to be signed by the President. There is a difference between 13 months as the duration of Medicare’s coverage of certain durable medical equipment in the Senate’s bill versus 36 months in the House’s bill. This writer is not aware of any of the defendants responding as of the date of this article. The Deficit Reduction Act of 2005 requires all states to have a five-year look back by the Family Support Division at the time the application is made.
CARE CONTRACTS
OR
PERSONAL NEEDS CONTRACTS
2. A personal needs contract (sometimes referred to as “care contract” or a “life care contract”) can be a useful tool to transfer property or assets to a caretaker. It does not seem to be a tool utilized by many attorneys. Ordinarily, a transfer of assets, without consideration, will disqualify an applicant for a period of months equal to the amount of the transfer. The value of the transfer is divided by the average monthly costs of a private pay nursing home resident. In Missouri, the average monthly cost for 2005 was $2,758. The figure for 2006 is $2,852. The use of a personal needs contract, if properly drafted and complied with, will avoid the transfer penalty. The transfer is for value and is not a gift.
If an elderly or disabled individual is unable to perform one of the activities of daily living (ADL), a personal needs contract is appropriate.40 If the asset to be transferred is real estate, the assessed value may be used. Even though the assessed value may be less than the fair market value, Medicaid law cannot be more restrictive than the SSI rules.41 The Program Operation Manual System (POMS) at SI-01140-1000.2 states that the value for SSI purposes is the assessed value of real estate. Several states have codified this standard in their Medicaid laws and policies.
Usually the personal care contracts spell out the assistance needed in certain daily activities such as bathing, dressing, toileting and other ADLs. If there is more than one caregiver, all of the caregivers should be named as parties to the agreement. The compensation should be spelled out in detail. Gary Seaborne, program manager of the FSD, has stated that there are certain essentials which must be included in the contracts:
a. There must not be duplicate services by a third party. The state, upon investigation, has found that certain activities set out in the contract were actually being performed by third parties.
b. A second prerequisite is that compensation be paid as services are provided. The FSD's requirement is that compensation be paid at least monthly.
c. Another prerequisite is that the agreement be executed before services performed. The FSD will not recognize services alleged to have been performed before the contract was executed.
d. The next prerequisite is that only fair market value for the services performed will be recognized. The FSD will not recognize contracts that provide a payment of $10,000 a week to a daughter caring for her mother. The commercial rate is usually adopted in the contract.42
On a compensation type contract, the caregiver is usually classified as an “independent contractor” rather than an employee. Attorneys should advise the caregiver to keep detailed “time sheets” of the services performed. It is advisable to have the time sheets reviewed by a third party. The third party can be the elder person, the siblings of the elder, the accountant or even the elders attorney.
What if a number of family members are providing care and the consideration is the transfer of real estate? The deed should be executed and placed in escrow with a third party. Instead of naming all of the caregivers, a limited liability corporation (LLC) may be advisable. The LLC would be the grantee under the deed. The contract should make it clear as to who are the caregivers and their interest in the LLC. There are numerous details which should be set out in the contract. An example would be if the caregiver is to perform accounting or bookkeeping services, or prepare tax returns. The fair market value rate should be established. A provision setting forth the terms and conditions, if any, under which either party is allowed to cancel the contract is sometimes included. If so, it may be advisable to insert a provision that the caregiver can only terminate for good cause. Good cause should then be specifically defined under the circumstances.
It is good practice to have the contract notarized and witnessed. The writer even had one contract videotaped. Another recommended practice is to make sure that the elder and the caregiver are advised to retain separate counsel. The heirs not sharing in the transfer of property should be alerted that their future inheritance may be affected by the personal care contract. This writer usually has heirs sign and consent to the contract.
Family Limited Partnership
3. In California and a few other states, elder law attorneys have succeeded in using a family limited partnership. In Missouri, limited partnerships are governed by the provision of the Uniform Limited Partnership Law (UPL) Chapter 359, RSMo. It is defined as a partnership formed by two or more persons and having one or more general partners and one or more limited partners.
A request has been made that the FSD accept the family limited partnership. A major distinction exists between a transfer to a trust and a family limited partnership. In a family limited partnership the transferor receives an interest as a limited partner. Therefore, it is not a gift. Regardless of how the FSD may rule, many elder law attorneys have been using the family limited partnership as a tool to protect the assets of the applicant from Medicaid recovery.
The partnership may be used to restrict the assets held in the family limited partnership. A few restrictions are as follows:
• No right to force income to be paid.
• No right of creditor or assignee to become a limited partner.
• No right of creditor with “charging order” to force income to be paid.
• No requirement that proceeds be distributed in the event that partnership assets are sold.
In order to validate the creation of a partnership, it is essential that there be a business reason for the formation of the partnership.
Testamentary Special Needs Trust
4. An overlooked tool is the testamentary special needs trust created in a will. It can be funded by second to die life insurance and/or an annuity. Additional funding can come from probate assets in the deceased's estate. The trust can direct payment to anyone after beneficiary's death.43 There is no obligation to repay Medicaid benefits to the state of Missouri.
IV. Other Concerns And Tools For Medicaid Planning
1. Guardianship/conservatorship: 44 Most probate judges do authorize some Medicaid planning. Under a limited conservatorship, most probate judges will authorize more extensive Medicaid planning.
2. Elder law attorneys, as part of the Medicaid planning, have encouraged the execution of general durable powers of attorney.45 This document avoids the restrictions of a guardianship/ conservatorship. Some attorneys use a separate document relating to life support and health of the principal. Others incorporate life support and health care in the same document as the financial authority.
3. Another important Medicaid planning document is the “living will.”46 The statute resulted from the Nancy Cruzan case.47 The statute is rather restrictive and, as a result, common law living wills, with less restrictions, have been developed.
4. With the enacting of the Health Insurance Portability and Accountability Act (HIPAA), effective April 2003, elder law attorneys provide HIPAA release documents to their clients. The client should execute a HIPAA release for the attorney. FSD, nursing homes, hospitals and other medical facilities and personnel usually will not discuss the medical condition of the client with the attorney without a medical release.
5. With the recent case of Hutchings v. Director of Dep’t of Social Servs.,48 issued by the Missouri Court of Appeals, Eastern District, applicants’ attorney fees may be awarded in excess of the statutory $75 per hour when appealing an administrative hearing award. This court sustained the finding that the agency’s decision was not “substantially justified under 536.087” RSMo 2000.49
V. Medical Qualifications
Criteria for admission physically to the Medicaid program are nine areas of medical assessment.50 The score for each category ranges from 0 to 3 to 6 to 9 points.51 The minimum number of points to be considered for Medicaid was 18, accumulated by rating all nine of the categories. As of September 1, 2005, 21 points are required. Exceptions are individuals whose condition requires licensed practical nurses or registered professional nurses. They can be eligible even if they do not have sufficient points. For example, a person who requires a gastric tube is automatically eligible. In Missouri, the nursing homes make the medical evaluation.
Summary
There are other areas that could be covered. The Deficit Reduction Act of 2005 provided other restrictions on Medicaid applicants: a) change of the penalty period start date from date of transfer of assets to the date that the applicant applies for Medicaid; b) individuals with home equity above $500,000 may no longer be eligible for Medicaid to cover nursing home care; c) purchase of life estates will be included in definition of assets except if purchaser resides in home at least one year after date of purchase of the life estate; d) states have option to add all multiple transfers of assets to consider the combined value as a single transfer for purposes of calculating ineligibility periods. Background and updates of statutes, regulations, policies and amendments are available from publications and sources that specialize in this area of law.52
Footnotes
1 Mr. Lupo is a principal in the law firm of David G. Lupo, P.C. He received his B.S.B.A. and J.D. degrees from Washington University and was a member of the board of editors of the Washington University Law Review. He is past chairman of the Elder Law Committee of The Missouri Bar; past chairman of the will contest subcommittee of The Missouri Bar; recipient of the “Outstanding Elder Law Attorney” award from the Missouri Chapter of the National Academy of Elder Law Attorneys (NAELA) in 1997; and editor of The Medicaid Newsletter and a Medicaid and Disability Consulting Service.
2 Omnibus Budget and Reconciliation Act of 1993, Pub. L. No. 103-66, 107 Stat. 312; 42 U.S.C. §§ 1396, et seq. See David G. Lupo, Medicaid – An Update on the C.S.R.S. and M.M.M.N.A. and the Effect of OBRA 93 on Asset Preservation, 50 J. Mo. Bar 73.
3 Section 208.010.9, RSMo Supp. 2005; 13 C.S.R § 40-2.030 (1-9); 13 C.S.R. § 40-2.030(10); 13 C.S.R.§ 40-2.30 (8-12)
4 Section 208.010(6), RSMo Supp. 2005.
5 42 U.S.C. § 1396r-5(f), (g) (2005); 13 C.S.R. 40-2.030(13)(B)(2) (3).
6 42 U.S.C. § 1396p(c)(2)(A)(B)(i-iv) (2005).
7 42 U.S.C. § 1396r-5(d)(3)(C) (2005); 42 U.S.C. § 1396r-5(g) (2005); 42 U.S.C. § 1396r-5(e)(2)(B) (2005); 42 U.S.C. § 1396r-5(d)(3) (2005).
8 42 U.S.C. § 1396r-5(d)(5) (2005).
9 In re Bryant (No. MO96-15234537, Decision and Order, before the Director of Family Services, Hearing No. MAC60006, October 15, 1992) (not published).
10 Revision of community spouse resource allowance:
If either such spouse establishes that the Community Spouse resource allowance (in relation to the amount of income generated by such an allowance) is inadequate to raise the community spouse income to the minimum monthly maintenance needs allowance, there shall be substituted, for the community spouse resource allowance under subsection (f) (2) of this section, an amount adequate to provide such a minimum monthly maintenance needs allowance (emphasis supplied). 42 U.S.C. § 1396r-5(e)(2)(c) (2005).
11 Wisconsin Dep’t of Health & Family Servs. v. Blumer, 534 U.S. 473 (2002).
12 Id. at 505.
13 Pub. L. 109-171, 120 Stat. 4 (2006).
14 U.S. Const. art. I, § 10, U.S. Const. amend. XIV; Mo. Const. art I, § 10.
15 42 U.S.C. § 1396p(c)(2)(A)(B)(i-iv) (2005); 42 U.S.C. § 1396p(c)(2)(B)(i) (2005), and (ii); 42 U.S.C. § 1396r-5(f)(1) (2005).
16 Section 208.212, RSMo Supp. 2005.
17 Monthly income will not be considered as an available asset when “the state of Missouri [is named as] secondary or contingent beneficiary.” Section 208.212(1)(3), RSMo Supp. 2005 (emphasis added). The purpose is to allow the state to recover any Medicaid expenditures made on behalf of the annuitant or their spouse, if the annuitant dies prior to receiving all of the guaranteed payments from the annuity.
18 “The department shall establish a sixty month look-back period to review any investment in an annuity by an applicant for Medicaid benefits. If an investment in an annuity is determined by the department to have been made in anticipation of obtaining or with intent to obtain eligibility for Medicaid benefits, the department shall have available all remedies and sanctions permitted under federal and state law regarding such investment. The fact that an investment in an annuity which occurred prior to August 28, 2005, does not meet the criteria established in subsection 1 of this section shall not automatically result in a disallowance of such investment.” Section 208.212, RSMo Supp. 2005.
19 “The department of social services shall promulgate rules to administer the provisions of this section. Any rule or portion of a rule, as that term is defined in section 536.010, RSMo, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536, RSMo, and, if applicable, § 536.028, RSMo. This section and chapter 536, RSMo, are non-severable and if any of the powers vested with the general assembly pursuant to chapter 536 RSMo, to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2005, shall be invalid and void.” (Emphasis supplied.) Section 208.212, RSMo Supp. 2005.
20 “An institutional spouse applying for Medicaid and having a spouse living in the community shall be required, to the maximum extent permitted by law, to divert income to such community spouse to raise the community spouse's income to the level of the minimum monthly needs allowance, as described in 42 U.S.C. Section 1396r-5. Such diversion of income shall occur before the community spouse is allowed to retain assets in excess of the community spouse's protected amount described in 42 U.S.C. Section 1396-r.” (Emphasis supplied.)
21 42 U.S.C. § 1396p(d)(4)(A)-(C) (2005).
22 Any creditor . . . other than the state of Missouri, shall also be paid all sums due for such person's care, maintenance and support, to the extent trust property is sufficient therefor. . . . Such trust shall terminate upon such person's (the beneficiary) death and any amounts remaining in the trust after the foregoing payments shall be distributed to such decedent's estate. Section 475.092.2, RSMo Supp. 2005.
23 SSI POMS (Supplemental Security Income, “Programs Operations Manual System”) POMS Section S1-01150.001 (1994) (POMS are similar to Internal Revenue Service regulations).
24 H.B. 1184, 93rd Gen. Assem., 2d Reg. Sess. (not passed).
25 Tidrow v. Director, Mo. State Div. of Family Servs., 688 S.W.2d 9 (Mo. App. ED 1985). Missouri Div. of Family Servs. v. Wilson, 849 S.W.2d 104 (Mo. App. W.D. 1993).
26 This type of trust established for an individual is applicable only if the state Medicaid plan provides Medicaid to individuals eligible under a special income level. These trusts are referred to as a “Miller Trust” 42 U.S.C. § 1396p(d)(4)(B). Missouri does not have a special income level, and this is therefore not applicable.
27 Memorandum IM-119 (10-07-05) from Family Support Division to caseworkers.
28 Sections 402.199, et seq., RSMo Supp. 2005.
29 Section 402.215.2(7)-(9), RSMo Supp. 2005.
30 Section 208.215.13, RSMo Supp. 2005.
31 A Notice of Intent to File Medicaid TEFRA Lien will come from the Division of Medical Services (DMS).
1. The lien will be removed upon the individual's discharge from the medical institution and return home.
2. No lien may be imposed on the individual's home if one or more of the following persons is lawfully residing in such home: a) The individual's spouse; b) The individual's child who is under twenty-one years of age or is blind or permanently and totally disabled; or c) A sibling of the individual who has an equity interest in the home and who was residing in the home for a period of at least one year immediately before the date of the individual's admission to the medical institution.
Memorandum from Family Support Division to caseworkers, IM-119 (10-07-05).
32 Deficit Reduction Act of 2005, Pub. L. 109-171, 120 Stat. 4 (2006).
33 Ahlborn v. Arkansas Dep't of Human Servs., 397 F.3d 620 (8th Cir. 2005).
34 Arkansas Dep't of Health and Human Servs., 126 S. Ct. 1752 (2006).
35 The relevant section reads as follows:
When the amount of the transfer is less than the monthly cost of nursing facility care, you have the option of not imposing a penalty or imposing a penalty for less than a full month. Under the latter option, the actual length of the penalty is based on the proportion of the State's private nursing facility rate that was transferred. If you choose to impose penalties for less than a full month, you must impose such penalties in all cases where a partial month penalty applies.
When an individual makes a series of transfers, each of which is less than the private nursing facility rate for a month, you have the option of imposing no penalty or imposing a series of penalties, each for less than a full month.
Department of Health and Human Services, State Medicaid Manual, Transmittal 64, § 3258 (1994).
36 Zeigler v. Gonzalez, No. CV-00080-CG-M (S.D. Ala.).
37 Public Citizens Org. v. U.S. Dist. Court, No. CV-00523-JDB (D.D.C.).
38 One Simple Loan v. U.S. Dep't of Educ., No. CV-02979-RMB (S.D. N.Y.).
39 Conyers v. Bush, No. CV-119792 (E.D. Mich.).
40 Section 208.309.2(5), RSMo Supp. 2005; 42 U.S.C. § 1396p(c)(1)(E) (2005) applicant who makes disqualifying transfer; 42 U.S.C. §1396p (c)(1)(A)(B) (2005), disqualifying transfer is defined as total uncompensated value of assets transferred.
41 42 C.F.R. § 431.120; 42 U.S.C. § 1396a(m)(n) (2005).
42 Telephone interview with Gary Seaborne, program manager of FSD.
43 42 U.S.C. § 1396p(d)(2)(A) (2005)
44 Section 475.130, RSMo Supp. 2005.
45 Sections 404.700, et seq., RSMo Supp. 2005.
46 Sections 459.010, et seq., RSMo Supp. 2005.
47 Cruzan, ex. rel. Cruzan v. Director, Mo. Dep't of Health, 497 U.S. 261 (1990).
48 Case nos. ED 85999 and ED 86019 (Mo. App. E.D. 2006).
49 Id.
50 19 CSR 30-81.030 (2006).
51 Id.
52 A few of many sources: The Medicaid Newsletter (Elder Law Publication Co., Inc.); The Elder Law Report (Aspen Publishing Co.); Medicare and Medicaid Law Bulletin (LRP Publications); NAELA News (National Academy of Elder Law Attorney, Inc.); and NAELA Quarterly (National Academy of Elder Law Attorneys, Inc.); See David G. Lupo Qualifying Under Missouri's New Medicaid for Long Term Nursing Care, 48 J. Mo. Bar 124 (1992); See Barbara J. Gilchrist Medicaid Rules 1990 for Missouri's Elderly, 46 J. Mo. Bar 441 (1990); The Family Support Division, Jefferson City, MO., Gary Seaborne and/or Donna Schubert, program development managers.