Kan. Admin. Regs. § 129-6-57

Current through Register Vol. 43, No. 49, December 5, 2024

Section 129-6-57 - Transfer of assets

(a) Definitions. For purposes of this regulation, each of the following terms shall have the meaning specified in this regulation:

(1) "Assets" means all income and resources of the individual and the individual's spouse, including any income or resources that the individual or the individual's spouse is entitled to but does not receive because of action by any of the following:

(A) The individual or the individual'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; or

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

(2) "Compensation" means all money, real or personal property, food, shelter, or service received by the individual or spouse at or after the time of transfer in exchange for the asset in question. A service received shall be considered compensation only if the service is provided under the terms of a legally enforceable agreement to provide the service in exchange for the assets in question and if the terms are established before delivery of the service. Payment or assumption of a legal debt owned by the individual or spouse in exchange for the asset shall be deemed compensation.

(3) "Fair market value" means the market value of an asset at the earlier of the time of the transfer or the contract of sale. Current market value shall be determined in accordance with K.A.R. 129-6-106(b).

(4) "Institutionalized individual" means an applicant or recipient who meets any of the following conditions:

(A) Is residing in a nursing facility;

(B) is residing in a medical institution that is providing the individual with a level of care equivalent to the care provided by a nursing facility;

(C) is residing in an HCBS living arrangement; or

(D) is participating in PACE.

(5) "Transfer of assets" means any transfer or assignment of any legal or equitable interest in any asset that partially or totally passes the use, control, or ownership of the asset of an applicant or recipient, or the spouse of an applicant or recipient, to another person or corporation, including any of the following:

(A) Giving away an interest in an asset;

(B) placing an interest in an asset in a trust that is not available to the grantor;

(C) removing or eliminating an interest in a jointly owned asset in favor of other owners;

(D) disclaiming an inheritance of any property, interest, or right;

(E) failing to take a share of an estate as a surviving spouse; or

(F) transferring or disclaiming the right to income not yet received.

(6) "Uncompensated value" means the fair market value of an asset less the amount of any compensation received by the individual or spouse in exchange for the asset.

(b) Ineligibility for payment of services. If an individual or spouse has transferred or disposed of assets for less than fair market value on or after the specified look-back date as determined by the date of transfer, the individual shall not be eligible for payment of services for any institutionalized individual as specified in paragraphs (a)(4)(A) through (D).

(c) Exempted transfers. An individual shall not be ineligible for payment of services due to a transfer of assets in any of the following circumstances:

(1) The fair market value of the assets transferred has been received.

(2) A written request to transfer the assets has been submitted by the individual and approved by the secretary before the date of the transfer.

(3) The transfer has been executed pursuant to the division of assets provisions of K.A.R. 129-6-106.

(4) A transfer of an interest in the individual's home has been made to any of the following, as determined by the interest conveyed:

(A) The spouse of the individual;

(B) a child of the individual who is under the age of 21 or who meets the blindness or disability criteria of K.A.R. 129-6-85;

(C) a sibling of the individual who has an equity interest in the home and who was residing in the home for at least one year immediately before the date the individual entered an institutional or HCBS arrangement; or

(D) a child of the individual, other than the child described in paragraph (c)(4)(B), who was residing in the home for at least two years immediately before the date the individual entered an institutional or HCBS arrangement and who provided care to the individual that permitted the individual to reside at home.

(5) The assets have been transferred to any of the following:

(A) The individual's spouse or to another individual for the sole benefit of the individual's spouse;

(B) the institutionalized individual's child who meets the blindness or disability criteria of K.A.R. 129-6-85 or a trust established solely for the benefit of the child; or

(C) a trust established solely for the benefit of an individual under 65 years of age who meets the blindness or disability criteria of K.A.R. 129-6-85.

(6) A transfer of assets has been made, and a satisfactory showing that the individual intended to dispose of the assets at fair market value, for other valuable consideration, or exclusively for a purpose other than to qualify for medicaid has been established. The following criteria shall be used to establish a satisfactory showing:

(A) A record of the facts, in chronological order, related to each transfer of assets within the applicable look-back period shall be assembled; and

(B) a transfer of assets for less than fair market value shall be presumed to have been for the purpose of establishing or maintaining medicaid eligibility, unless the individual presents clear and convincing evidence that the transfer was exclusively for some other purpose. The burden shall be on the individual to rebut this presumption by furnishing clear and convincing evidence that the asset was transferred exclusively for some other purpose. A signed statement by the individual shall not be, by itself, clear and convincing evidence. Each transfer shall be considered in the light of the circumstances at the time the transfer was made. The total amount of the transfer shall be considered in proportion to the length of the interval between the date of the transfer and the date of the application for medical assistance. In addition, the following factors shall be taken into account:

(i) Whether the transfer was ordered by the court and neither the individual, the spouse, the conservator, the guardian, the beneficiary of the transfer, nor anyone else acting in their legal authority or direction took action to effectuate the transfer; and

(ii) whether the individual could not have anticipated the need for medical assistance at the time of transfer due to an unexpected event occurring after the transfer that resulted in the traumatic onset of disability or blindness, the diagnosis of a previously undetected disability, or the loss of other income or resources, completely outside of the control of the individual or spouse, that would have otherwise precluded medical eligibility.

(7) The transferred asset has been returned to the individual or has been made available for use by the individual or spouse.

(d) Look-back date. The look-back date shall mean the earliest date on which a penalty for transferring assets for less than fair market value can be assessed, as specified in this subsection. A penalty shall be assessed for all transfers by the individual or the individual's spouse that take place on or after the look-back date. A penalty shall not be assessed for any transfers that take place before the look-back date.

(1) For transfers of assets before February 8, 2006, multiple transfers that occur within a single month shall be treated as a single transfer. The look-back date shall be either of the following:

(A) 60 months before the date the individual received or was otherwise eligible to receive institutional care or HCBS and has applied for medical assistance in the case of payment from a trust or portions of a trust that are treated as assets disposed of by the individual as specified in K.A.R. 129-6-109(c)(1) and (2); or

(B) 36 months before the date the individual received or was otherwise eligible to receive institutional care or HCBS and has applied for medical assistance in the case of all other transfers of assets.

(2) For transfers of assets on and after February 8, 2006, multiple transfers that occur within a single month shall be treated as a single transfer. The look-back date shall be the date that is 60 months before the date the individual received or was otherwise eligible to receive institutional care or HCBS and has applied for medical assistance.

(e) Transfer period of ineligibility. If the individual or spouse has transferred assets for less than fair market value, the individual shall not be eligible for the services specified in paragraphs (a)(4)(A) through (D), as follows:

(1) For transfers before February 8, 2006, the penalty period shall be equal to the number of months calculated by taking the total cumulative uncompensated value of the assets transferred by the individual or spouse on or after the look-back date, divided by $4,000.

(2) For transfers on and after February 8, 2006, the penalty period shall be equal to the number of days calculated by taking the total cumulative uncompensated value of the assets transferred by the individual or spouse on or after the look-back date, divided by the average daily private-pay cost of nursing facilities in the state in effect on the date the penalty begins. The average daily private-pay cost shall be determined at least annually based on the rates reported by the nursing facilities and compiled by department for aging and disability services.

(f) Penalty start date.

(1) The date on which the penalty period begins shall be determined by the date of the transfer, as follows:

(A) For transfers before February 8, 2006, the penalty start date shall be the first day of the month in which the transfer occurred for applicants and no later than the second month following the month of transfer for recipients giving timely and adequate notice as defined in K.A.R. 129-7-65.

(B) For transfers on and after February 8, 2006, the penalty start date shall be the later of the following:

(i) For applicants, the later of the following: the first day of the month in which the transfer occurred or the first day on which the individual is eligible for medical assistance based on an application for medical assistance and is receiving institutional care or would be receiving HCBS but for the application of the penalty period; and

(ii) for recipients giving timely and adequate notice as defined in K.A.R. 129-7-65, no later than the second month following the month of transfer.

(2) Separately established penalty periods shall be served consecutively. Once the penalty period is imposed, the period shall not be interrupted or suspended even if the individual no longer receives institutional care or HCBS.

(3) If the spouse of the individual transfers an asset that results in a penalty period and that spouse is subsequently institutionalized and is determined otherwise eligible for medical assistance, the remaining penalty period shall be divided between the spouses.

(g) Hardship waiver.

(1) A penalty period shall be initially waived or suspended if the imposition of the penalty period would cause an undue hardship on the individual. To cause an "undue hardship" on the individual shall mean to deprive the individual of either of the following:

(A) Medical care to the extent that the individual's health or life would be endangered; or

(B) food, clothing, shelter, or other necessities of life to the extent that the individual would be at risk of serious harm.

(2) Undue hardship shall not exist if the application of a penalty period merely causes an individual or any individual's family members inconvenience or restricts their lifestyle. Undue hardship shall not exist if the individual transferred the assets to the spouse and the spouse refuses to cooperate in making the resources available to the individual.

(3)

(A) Any individual claiming undue hardship may submit a written request to the department at any time during the penalty period. The request shall include a description of the undue hardship along with evidence to support the claim.

(B) The facility in which the individual resides shall obtain written consent from the individual or the individual's personal representative in order to assert a claim of undue hardship on behalf of the individual and provide supporting information on behalf of the individual.

Kan. Admin. Regs. § 129-6-57

Authorized by and implementing K.S.A. 2012 Supp. 65-1,254 and 75-7403; effective, T-129-10-31-13, Nov. 1, 2013; effective Feb. 28, 2014.