Penalty Periods 510-05-80-15

(Revised 8/1/05 ML #2981)

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(N.D.A.C. Section 75-02-02.1-33.1)

 

  1. The number of months and days of ineligibility for an individual shall be equal to the total uncompensated value of all income and assets transferred by the individual, or individual's spouse, on or after the look-back date, divided by the average monthly cost, or daily cost as appropriate, of nursing facility care in North Dakota at the time of the individual's first application.

The following example demonstrates how the monthly and daily period of ineligibility is calculated:

 

Example:  On December 10, 2002, Mr. Brown made a disqualifying transfer of $70,000.  He applied for Medicaid on July 18, 2003.  The average cost of nursing facility care at the time of application is $3945 per month and $129.71 per day.  $70,000 divided by $3945 is 17.74 months.  Seventeen months at $3945 per month is $67,065, leaving $2935 to which the daily rate is applied.  $2935 divided by $129.71 is 22.63 days.  Mr. Brown's penalty period is 17 months and 23 days (partial days are rounded up).

 

Since the average cost of care used is the amount from when an individual first applies for Medicaid, if Mr. Brown had previously applied for Medicaid in July 2001 (regardless of the action taken on that application) the average cost of care used to calculate the penalty period would be $3652 per month and $120.08 per day. Mr. Brown's penalty period would have been 19 months and 6 days.

  1. The period of ineligibility begins the first day of the month in which the income or assets were transferred for less than fair  market value, or if that day is within any other period of ineligibility under this chapter, the first day thereafter that is not in such a period of ineligibility.

For Example: Mr. Smith made a disqualifying transfer in January of last year that resulted in a ten-month period of ineligibility. The period begins the first day of the month of transfer, January, and goes through October. In July of last year, he made a second disqualifying transfer that resulted in a 12-month period of ineligibility. Because the month of transfer, July, was already within a period of ineligibility, the 12-month period from the second transfer only begins in November, and goes through October of this year.

  1. If a transfer results in a period of ineligibility for an individual receiving nursing care services, and the individual’s spouse begins receiving nursing care services and is otherwise eligible for Medicaid, the remaining period of ineligibility shall be apportioned equally between the spouses if the transfer was made on or after the individual's spouse's look-back date. Any months remaining in the period of ineligibility must be assigned or reassigned to the spouse who continues to receive the nursing care services if one spouse dies or stops receiving nursing care services.

Example: Mr. and Mrs. White make a disqualifying transfer in January 2004. Mrs. White enters LTC in February 2004 and is informed that the transfer in January will cause her to be ineligible for Medicaid coverage of her nursing care services until June 30, 2006. On March 1, 2005, Mr. White also enters LTC and is otherwise eligible for Medicaid. There are still 16 months of the penalty period remaining, which is divided between them. They will both be ineligible for eight months, or through October 2005.

 

If Mr. White left LTC on June 20, 2005, his remaining four months and ten days from his ineligibility period must be given back to Mrs. White, extending her period of ineligibility through February 10, 2006.

 

Example: Mr. and Mrs. Brown make a large disqualifying transfer that causes 70 months of ineligibility. At the same time, Mr. Brown enters LTC, applies for Medicaid, and is ineligible because the disqualifying transfer was made on or after his look-back date. Mrs. Brown enters LTC 48 months later and applies for Medicaid. The disqualifying transfer was made prior to her look-back date (36 months) so none of Mr. Brown's remaining 22 months of penalty period is assigned to Mrs. Brown.