9803.1At the time of the initial eligibility determination, the Department shall conduct a review to determine whether the applicant, the applicant's spouse, or an individual with legal authority to act in place of or on behalf of the applicant or the applicant's spouse has improperly transferred resources for less than fair market value within sixty (60) months prior to the date of an application for LTCSS.
9803.2The Department shall impose a penalty period if the applicant, the applicant's spouse, or an individual with legal authority to act in place of or on behalf of the applicant or the applicant's spouse has transferred resources for less than fair market value within sixty (60) months prior to the date of an application for LTCSS.
9803.3The penalty period shall be the length of time during which an individual is ineligible for Medicaid coverage of LTCSS due to improper resource transfers made within sixty (60) months prior to the date of an application for LTCSS.
9803.4The length of the penalty period shall be based on the following formula:
Total Uncompensated Value of All Transferred Resources
÷
Average Monthly Cost of a Private Nursing Facility Patient in the Community
=
Number of Months of Penalty Period.
9803.5 The Department shall determine the total uncompensated value of all transferred resources by subtracting the amount received by the individual for the improperly transferred resources from the fair market value of those resources.9803.6The Department shall determine the average monthly cost of a private nursing facility patient in the community on an annual basis, using a single standard figure for all LTCSS applicants.
9803.7Where a partial month period exists at the end of the penalty period, the applicant is only eligible for LTCSS for the portion of the month after the penalty period ends.
9803.8The Department may waive the penalty period if it could create an undue hardship. Undue hardship may exist:
(a) For applicants in an institutional setting, if the individual has been threatened with eviction from a long-term care facility or medical institution and has exhausted all legal methods to prevent the eviction; or(b) For applicants eligible for Home and Community-Based Services (HCBS) Waiver, if the individual's service provider has threatened to terminate services; and (1) The individual to whom the resource was transferred is no longer in possession of the transferred resource and has no other resources of comparable value with which to pay the cost of care; and(2) There is no family member or other individual or organization able and willing to provide care to the individual; or(c) For all LTCSS applicants, if the applicant would be deprived of medical care that would endanger his or her life or health; or food, clothing, shelter, or other necessities of life; or(d) For all LTCSS applicants, if any other undue hardship or good cause exemption exists, as may be defined by the Secretary for the U.S. Department of Health and Human Services or the Secretary for the U.S. Department of Agriculture.9803.9Transfers of resources under the following circumstances shall not be subject to the penalty period described in Subsection 9803.3:
(a) The resource that was transferred was the applicant's personal home, and title to the home was transferred to: (1) The spouse of the applicant;(2) A child of the applicant who: (i) Was under the age of twenty-one (21);(ii) Was blind or permanently and totally disabled; or(iii) Had been residing in the home for at least two (2) years immediately before the date the applicant became institutionalized and who provided care to the applicant which permitted the applicant to reside at home, rather than in an institution; or(3) A sibling of the applicant who had an equity interest in the home and who had been residing in the home for at least one (1) year immediately before the date the applicant became institutionalized.(b) Any type of resource that was transferred:(1) To the applicant's spouse or to another for the sole benefit of the spouse;(2) From the applicant's spouse to another for the sole benefit of the spouse;(3) To the applicant's child who is blind or permanently and totally disabled, or to a trust established for the sole benefit of such child; or(4) To a trust established for the sole benefit of an individual under the age of sixty-five (65) who is disabled as defined by SSI.(c) Any type of resource that was transferred, and for which a satisfactory showing is made to the District that: (1) The applicant intended to dispose of the resources at fair market value;(2) The resources were transferred exclusively for a purpose other than to qualify for medical assistance; or(3) All resources transferred for less than fair market value have been returned to the applicant, or the fair market equivalent has been returned.9803.10Establishment of the following types of trusts s shall not be subject to the penalty period described in Subsection 9803.3:
(a) A "special needs" trust containing the resources of an individual under the age of sixty-five (65) with a disability, which may also contain the resources of other individuals and which meets the following conditions:(1) The trust is established for the sole benefit of the individual by a parent, grandparent, legal guardian, or court; and(2) The trust contains a provision stating that, upon the death of the individual, the District receives all amounts remaining in the trust, up to the total amount of medical assistance paid on behalf of the individual.(b) A "pooled" trust containing the resources of an individual with a disability which meets the following conditions:(1) The trust is established for the sole benefit of the individual by a parent, grandparent, legal guardian, or court;(2) The trust is established and managed by a non-profit association;(3) A separate account is maintained for each beneficiary, but funds are pooled for investment and management purposes; and(4) The trust contains a provision stating that, to the extent that any amounts remaining in the individual's account upon his or her death are not retained by the trust, the trust pays to the District the amount remaining in the account up to the total amount of medical assistance paid on behalf of the individual.9803.11The purchase of an annuity shall not be subject to the penalty period described in Subsection 9803.3 under the following conditions:
(a) Annuities purchased on or after February 8, 2006 name the District as the primary remainder beneficiary, or secondary remainder beneficiary after a community spouse or minor child or child with a disability, for an amount equal to the total amount of medical assistance paid on the behalf of the applicant; and(b) Annuities purchased on or after February 8, 2006, are irrevocable, non-assignable, actuarially sound, and provide for payments in equal amounts during the annuity term, with no deferral or balloon payments; or meet the requirements pertaining to retirement plans in 42 U.S.C. § 1396 p(c)(1)(G)(i).9803.12For annuities purchased prior to February 8, 2006, actions taken by the individual that change the course of payments to be made by the annuity or treatment of the income or principal of the annuity subject the annuity to the requirements for those purchased on or after February 8, 2006.
9803.13Routine changes and automatic events that do not require action by the individual do not subject an annuity purchased prior to February 8, 2006, to the requirements for those purchased on or after February 8, 2006.
9803.14The purchase of a life estate interest in another individual's home shall not be subject to the penalty period described in Subsection 9803.3 when the purchaser lives in the home for at least one (1) year after the date of purchase.
9803.15The full purchase price of the life estate interest shall be deemed a transfer of resources for less than fair market value if the purchaser has not lived in the home for at least one (1) year.
9803.16Notwithstanding the length of time the purchaser lives in the home, if the purchase amount of the life estate interest is greater than the computed value of the interest, the difference is considered a transfer of resources for less than fair market value.
9803.17The purchase of a promissory note or loan shall not be subject to the penalty period described in Subsection 9803.3 under the following conditions:
(a) The repayment terms are actuarially sound;(b) Payments are made in equal amounts with no balloon payments; and(c) The note, loan or mortgage prohibits cancellation of the debt upon the death of the lender.D.C. Mun. Regs. tit. 29, r. 29-9803
Final Rulemaking published at 63 DCR 1605 (2/12/2016)