There is an impression being created out in the field that the filing of a Medicaid application is just a matter of spending down and then assembling a few years of records and submitting them to the county board of social services. The fact is that every application is intensively scrutinized. Some counties are scanning all of the financial documents to a reader program that generates a lengthy list of questions. Questions are asked about every check that is payable to a person (as opposed to a company). Questions will be asked about every cash withdrawal that was made at the ATM.
If you can’t explain what the applicant did with their money, there will be an issue. If there were any gifts made during the prior 5 years (big or small), there will be an issue. If you are unable to provide a few older bank statements or an explanation of where the account received a deposit from, there will be an issue. If the applicant lived with another family member and had any shared accounts, there will be big issues. If the applicant still owns the house, there will be issues. And there might be substantial asset preservation opportunities that will be missed if you don’t get legal advice before just embarking on a spend-down. Applicants are being denied for “failure to cooperate” and “failure to provide documentation” when it is in fact sometimes impossible to answer some questions to the satisfaction of the agency.
What sorts of legal issues arise? Here’s just a short sample: (1) whether certain assets are “available” and countable, or unavailable so that there could still be eligibility. (2) whether a transaction was a “gift” (that causes a penalty) or was not a gift. (3) whether a gift is exempt and causes no penalty. (4) whether the application was properly denied for “failure to cooperate.” (5) whether the application of a married but separated person can be processed without the information from their recalcitrant spouse. (6) whether leftover pre-eligibility medical bills can be paid by Medicaid. (7) the implications of certain trusts that include the applicant as a beneficiary. The statutes, regulations and case decisions — both state and federal — provide the answers to these issues, as well as the challenges that can be made to a decision that results in a denial of eligibility.
To err is human, and the applications are of course processed by human beings. You can protect your interests by making sure you are getting legal assistance and advice as you embark on this grueling and confusing process.
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