Library: Policy
317:35-17-10. Determining financial eligibility/categorical relationship for the ADvantage program
Revised 12-18-07
Financial eligibility for the ADvantage program is determined as follows:
(1) Financial eligibility/categorically related to ABD. In determining income and resources for the individual categorically related to ABD, the "family" includes the individual and spouse, if any. If an individual and spouse cease to live together for reasons other than institutionalization, income and resources are considered available to each other through the month in which they are separated. Mutual consideration ceases with the month after the month in which the separation occurs. Any amounts which are actually contributed to the spouse after the mutual consideration has ended are considered. If the individual and spouse cease to live together because of the individual entering a nursing facility, see OAC 317:35-19-21 to determine financial eligibility.
(A) The categorically needy standard on OKDHS Appendix C-1, Schedule VI, is applicable for individuals categorically related to ABD.
(B) If the individual is receiving ADvantage program services and has received services for 30 days or longer, the categorically needy standard in OKDHS Appendix C-1, Schedule VIII. B.1., is used. The 30-day requirement is considered to have been met even if it is interrupted by a hospital stay or the individual is deceased before the 30-day period ends. If the individual does not require services past the 30 days, the categorically needy standard in OKDHS Appendix C-1, Schedule VI., is used.
(2) Transfer of capital resources on or before August 10, 1993. Individuals who have transferred capital resources on or before August 10, 1993 and applying for or receiving ADvantage waiver services are subject to penalty if the individual, the individual's spouse, the guardian, or legal representative of the individual or individual's spouse, disposes of resources for less than fair market value during the 30 months immediately prior to eligibility for Title XIX if the individual is eligible at institutionalization. If the individual is not eligible for Title XIX at institutionalization, the individual is subject to penalty if a resource was transferred during the 30 months immediately prior to the date of application for Title XIX. Any subsequent transfer is also subject to the rules in this paragraph. When there have been multiple transfers of resources without commensurate return, all transferred resources are added together to determine the penalty period. The penalty consists of a period of ineligibility (whole number of months) determined by dividing the total uncompensated value of the resource by the average monthly cost ($2,000) to a private patient in a nursing facility level of care in Oklahoma. The penalty period begins with the month the resource or resources were first transferred and cannot exceed 30 months. Uncompensated value is defined as the difference between the equity value and the amount received for the resource.
(A) However, the penalty would not apply if:
(i) the transfer was prior to July 1, 1988;
(ii) the title to the individual's home was transferred to:
(I) the spouse;
(II) the individual's child who is under age 21 or is blind or totally disabled;
(III) a sibling who has equity interest in the home and resided in the home for at least one year prior to the individual's admission to the ADvantage program; or
(IV) the individual's son or daughter who resided in the home and provided care for at least two years prior to the individual's entry into the ADvantage program;
(iii) the individual can show satisfactorily that the intent was to dispose of resources at fair market value or that the transfer was for a purpose other than eligibility;
(iv) the transfer was to the community spouse or to another person for the sole benefit of the community spouse in an amount equal to the community spouse's resource allowance;
(v) the resource was transferred to the individual's minor child who is blind or totally disabled;
(vi) the resource was transferred to the spouse (either community or institutionalized) or to another person for the sole benefit of the spouse if the resources are not subsequently transferred to still another person for less than fair market value; or
(vii) the denial would result in undue hardship. Such determination should be referred to OKDHS State Office for a decision.
(B) The individual is advised by a written notice of a period of ineligibility due to transfer of assets. The notice explains the period of ineligibility for payment for ADvantage program services and the continuance of eligibility for other Title XIX services.
(C) The penalty period can be ended by either the resource being restored or commensurate return being made to the individual.
(D) Once the restoration or commensurate return is made, eligibility is redetermined considering the value of the restored resource or the amount of commensurate return.
(E) The restoration or commensurate return will not entitle the member to benefits for the period of time that the resource remained transferred. An applicant cannot be certified for ADvantage program services for a period of resource ineligibility.
(3) Transfer of assets on or after August 11, 1993 but before February 8, 2006. An institutionalized individual, an institutionalized individual's spouse, the guardian or legal representative of the individual or individual's spouse who disposes of assets on or after August 11, 1993 but before February 8, 2006 for less than fair market value on or after the look-back date specified in (A) of this paragraph subjects the individual to a penalty period for the disposal of such assets.
(A) For an institutionalized individual, the look-back date is 36 months before the first day the individual is both institutionalized and has applied for SoonerCare. However, in the case of payments from a trust or portions of a trust that are treated as transfers of assets, the look back date is 60 months.
(B) For purposes of this paragraph, an "institutionalized" individual is one who is receiving ADvantage program services.
(C) The penalty period begins the first day of the first month during which assets have been transferred and which does not occur in any other period of ineligibility due to an asset transfer. When there have been multiple transfers, all transferred assets are added together to determine the penalty.
(D) The penalty period consists of a period of ineligibility (whole number of months) determined by dividing the total uncompensated value of the asset by the average monthly cost ($2,000) to a private patient in an NF level of care in Oklahoma. In this calculation, any partial month is dropped. There is no limit to the length of the penalty period for these transfers. Uncompensated value is defined as the difference between the fair market value at the time of transfer less encumbrances and the amount received for the resource.
(E) Assets are defined as all income and resources of the individual and the individual's spouse, including any income or resources which the individual or such individual's spouse is entitled to but does not receive because of action:
(i) by the individual or such individual's spouse;
(ii) by a person, including a court or administrative body, with legal authority to act in place of or on behalf of the individual or such individual's spouse; or
(iii) by any person, including any court or administrative body acting at the direction or upon the request of the individual or such individual's spouse.
(F) A penalty would not apply if:
(i) the title to the individual's home was transferred to:
(I) the spouse;
(II) the individual's child who is under age 21 or is blind or totally disabled as determined by Social Security;
(III) a sibling who has equity interest in the home and resided in the home for at least one year immediately prior to the institutionalization of the individual; or
(IV) the individual's son or daughter who resided in the home and provided care for at least two years immediately prior to the individual's institutionalization.
(ii) the individual can show satisfactorily that the intent was to dispose of assets at fair market value or that the transfer was exclusively for a purpose other than eligibility. It is presumed that any transfer of assets made for less than fair market value was made in order to qualify the individual for SoonerCare. In order to rebut this presumption, the individual must present compelling evidence that a transfer was made for reasons other than to qualify for SoonerCare. It is not sufficient for an individual to claim that assets were transferred solely for the purposes of allowing another to have them with ostensibly no thought of SoonerCare if the individual qualifies for SoonerCare as a result of the transfer.
(iii) the transfer was to the community spouse or to another person for the sole benefit of the community spouse in an amount equal to the community spouse's asset allowance.
(iv) the asset was transferred to the individual's child who is blind or totally disabled as determined by Social Security. The transfer may be to a trust established for the benefit of the individual's child.
(v) the asset was transferred to or from the spouse (either community or institutionalized) or to another person for the sole benefit of the spouse if the assets are not subsequently transferred to still another person for less than fair market value.
(vi) the asset is transferred to a trust established solely for the benefit of a disabled individual under the age of 65.
(vii) the denial would result in undue hardship. Such determination should be referred to OKDHS State Office for a decision.
(G) The individual is advised by a written notice of a period of ineligibility due to transfer of assets. The notice explains the period of ineligibility for payment of ADvantage program services and the continuance of eligibility for other SoonerCare services.
(H) The penalty period can be ended by either all assets being restored or commensurate return being made to the individual.
(I) Once the restoration or commensurate return is made, eligibility is redetermined considering the value of the restored asset or the amount of commensurate return.
(J) The restoration or commensurate return will not entitle the member to benefits for the period of time that the asset remained transferred. An applicant cannot be certified for ADvantage program services for a period of asset ineligibility.
(K) Assets which are held by an individual with another person or persons, whether held in joint tenancy or tenancy in common or similar arrangement, and the individual's ownership or control of the asset is reduced or eliminated is considered a transfer.
(4) Transfer of assets on or after February 8, 2006. An institutionalized individual, an institutionalized individual's spouse, the guardian or legal representative of the individual or individual's spouse who disposes of assets on or after February 8, 2006 for less than fair market value on or after the look-back date specified in (A) of this paragraph subjects the individual to a penalty period for the disposal of such assets. • 1
(A) For an institutionalized individual, the look-back date is 60 months before the first day the individual is both institutionalized and has applied for SoonerCare. However, individuals that have purchased an Oklahoma Long-Term Care Partnership Program approved policy may be completely or partially exempted from this Section depending on the monetary extent of the insurance benefits paid.
(B) For purposes of this paragraph, an "institutionalized" individual is one who is receiving ADvantage program services.
(C) The penalty period will begin with the later of:
(i) the first day of a month during which assets have been transferred for less than fair market value; or
(ii) the date on which the individual is:
(I) eligible for medical assistance; and
(II) receiving institutional level of care services that, were it not for the imposition of the penalty period, would be covered by SoonerCare.
(D) The penalty period:
(i) cannot begin until the expiration of any existing period of ineligibility;
(ii) will not be interrupted or temporarily suspended once it is imposed;
(iii) when there have been multiple transfers, all transferred assets are added together to determine the penalty.
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(L) When a transfer of assets by the spouse of an individual results in a period of ineligibility and the spouse who made such transfer subsequently becomes institutionalized, the period of ineligibility will be apportioned between the two institutionalized spouses.
- (E) The penalty period consists of a period of ineligibility determined by dividing the total uncompensated value of the asset by the average monthly cost to a private patient in a nursing facility in Oklahoma shown on OKDHS Appendix C-1. In this calculation, the penalty must include a partial month disqualification based upon the relationship between that fractional amount and the average monthly cost to a private patient in a nursing facility in Oklahoma. There is no limit to the length of the penalty period for these transfers. Uncompensated value is defined as the difference between the fair market value at the time of transfer less encumbrances and the amount received for the resource.
(F) Assets are defined as all income and resources of the individual and the individual's spouse, including any income or resources which the individual or such individual's spouse is entitled to but does not receive because of action:
(i) by the individual or such individual's spouse;
(ii) by a person, including a court or administrative body, with legal authority to act in place of or on behalf of the individual or such individual's spouse; or
(iii) by any person, including any court or administrative body acting at the direction or upon the request of the individual or such individual's spouse.
(G) Special Situations.
(i) Separate Maintenance or Divorce.
(I) There shall be presumed to be a transfer of assets if an applicant or member receives less than half of the couple's resources pursuant to a Decree of Separate Maintenance or a Decree of Divorce.
(II) There shall be presumed to be a transfer of assets if the income is reduced to an amount lower than the individual's own income plus half of the joint income. The transfer penalty shall be calculated monthly.
(III) Assets which were exempt lose the exempt character when not retained by the applicant or member in the divorce or separate maintenance. These assets, if received by the other spouse, are counted when determining the penalty.
(IV) The applicant or member may rebut the presumption of transfer by showing compelling evidence that the uneven division of income or resources was the result of factors unrelated to SoonerCare eligibility.
(ii) Inheritance from a spouse.
(I) Oklahoma law provides that a surviving spouse is entitled to a minimum portion of a deceased spouse's probate estate. The amount depends on several factors.
(II) It is considered a transfer if the deceased spouse's will places all, or some, of the statutory share the applicant or member is entitled to receive in a trust which the applicant or member does not have unfettered access to or leaves less than the statutory amount to the applicant or member, who does not then elect to receive the statutory share in probate proceedings.
(H) A penalty would not apply if:
(i) the title to the individual's home was transferred to:
(I) the spouse; or
(II) the individual's child who is under age 21 or is blind or totally disabled as determined by Social Security; or
(III) a sibling who has equity interest in the home and resided in the home for at least one year immediately prior to the institutionalization of the individual; or
(IV) the individual's son or daughter who resided in the home and provided care for at least two years immediately prior to the individual's institutionalization.
(ii) the individual can show satisfactorily that the intent was to dispose of assets at fair market value or that the transfer was exclusively for a purpose other than eligibility. It is presumed that any transfer of assets made for less than fair market value was made in order to qualify the individual for SoonerCare. In order to rebut this presumption, the individual must present compelling evidence that a transfer was made for reasons other than to qualify for SoonerCare. It is not sufficient for an individual to claim that assets were transferred solely for the purposes of allowing another to have them with ostensibly no thought of SoonerCare if the individual qualifies for SoonerCare as a result of the transfer.
(iii) the transfer was to the community spouse or to another person for the sole benefit of the community spouse in an amount equal to the community spouse's asset allowance. "Sole benefit" means that the amount transferred will be used for the benefit of the community spouse during his or her expected life.
(iv) the asset was transferred to the individual's child who is blind or totally disabled as determined by Social Security. The transfer may be to a trust established for the benefit of the individual's child.
(v) the asset was transferred to or from the spouse (either community or institutionalized) or to another person for the sole benefit of the spouse if the assets are not subsequently transferred to still another person for less than fair market value. "Sole benefit" means that the amount transferred will be used for the benefit of the spouse (either community or institutionalized) during his or her expected life.
(vi) the asset is transferred to a trust established solely for the benefit of a disabled individual under the age of 65.
(vii) the denial would result in undue hardship. Undue hardship exists when application of a transfer of assets penalty would deprive the individual of medical care such that the individual's health or life would be endangered; or of food, clothing, shelter, or other necessities of life.
(I) An undue hardship does not exist if the individual willingly transferred assets for the purpose of qualifying for SoonerCare services through the use of the undue hardship exemption.
(II) Such determination should be referred to OKDHS State Office for a decision.
(III) If the undue hardship exists because the applicant was exploited, legal action must be pursued to return the transferred assets to the applicant before a hardship waiver will be granted. Pursuing legal action means an APS referral has been made to the district attorney's office or a lawsuit has been filed and is being pursued against the perpetrator.
(I) The individual is advised by a written notice of a period of ineligibility due to transfer of assets, a timely process for determining whether an undue hardship waiver will be granted and a process for an adverse determination appeal. The notice explains the period of ineligibility for payment of ADvantage program services and the continuance of eligibility for other SoonerCare services.
(J) The penalty period can be ended by either all assets being restored or commensurate return being made to the individual.
(K) Once the restoration or commensurate return is made, eligibility is redetermined considering the value of the restored asset or the amount of commensurate return.
(L) The restoration or commensurate return will not entitle the member to benefits for the period of time that the asset remained transferred. An applicant cannot be certified for ADvantage program services for a period of asset ineligibility.
(M) Assets which are held by an individual with another person or persons, whether held in joint tenancy or tenancy in common or similar arrangement, and the individual's ownership or control of the asset is reduced or eliminated is considered a transfer. The exception to this rule is if ownership of a joint account is divided according to the amount contributed by each owner.
(i) Documentation must be provided to show each co-owner's contribution;
(ii) The funds contributed by the applicant or SoonerCare member end up in an account owned solely by the applicant or member.
(N) When a transfer of assets by the spouse of an individual results in a period of ineligibility and the spouse who made such transfer subsequently becomes institutionalized, the period of ineligibility will be apportioned between the two institutionalized spouses.
(5) Commensurate return. Commensurate return for purposes of this Section is defined as actual money payment or documentation of money spent on the member's behalf; i.e., property taxes, medical debts, nursing care expenses, etc., corresponding to the market value of the transferred property. The definition does not include personal services, labor or provision of rent-free shelter. It also does not include a monetary value assigned and projected for future payment either by cash or provision of services. Any transfer of property within the five years prior to application or during receipt of assistance must be analyzed in regard to commensurate return as well as determination of intent.
INSTRUCTIONS TO STAFF 317:35-17-10
Issued 3-15-17
1.When an individual applies for ADvantage Waiver services, the transfer of assets look-back period starts with the application date.When the individual transferred assets without receiving fair market value within the last 60-calendar months, the penalty period starts with the date the individual is determined financially and medically eligible for long-term care (LTC) services if it were not for the transfer penalty.This is normally the medical eligibility date.
(1) The area nurse determines medical eligibility at the same time as Adult and Family Services (AFS) LTC staff determines financial eligibility.When the individual is receiving SoonerCare (Medicaid), AFS staff only needs to determine if the individual transferred assets without receiving fair market value.
(2) When the area nurse determines the individual does not meet nursing facility level of care or does not recommend ADvantage Waiver services, the area nurse denies the authorization and a penalty period start date is not set.
(3) When the individual is not financially eligible for a reason other than transfer of resources, AFS LTC staff denies the application and a penalty period is not set.AFS LTC staff notifies the area nurse of the denial.
(4) When AFS LTC staff denies the ADvantage Waiver application because of the asset transfer and sets a penalty period, the individual is eligible for SoonerCare (Medicaid) only benefits during the penalty period unless the individual requires a Medicaid Income Pension Trust (MIPT) to be eligible. When a MIPT is required in order for the individual to be income eligible for LTC, the individual must establish and fund a MIPT for at least one month to start the penalty period.After one month, the individual may stop contributing to the MIPT in order to have money to pay bills until the penalty period ends.When the individual chooses not to fund the MIPT after the first month of SoonerCare (Medicaid) eligibility, the worker closes the SoonerCare (Medicaid benefit.
(5) When the penalty period exceeds the 60-calendar month look back period, AFS LTC staff explains the benefit of withdrawing the LTC application and not reapplying until the 60-calendar months from the last large transfer.This avoids the requirement of serving the complete penalty period.
(A) For example, if the individual transferred $300,000 on May 15, 2013, and $10,000 more on November 15, 2016, and applied for ADvantage Waiver services on January 2, 2017, it is better to withdraw the application and wait to apply until after May 15, 2018.When the individual waits until after May 15, 2018 to apply, the 60-calendar month look back period will have ended for the large transfer.Using the Transfer of Assets Calculator, $310,000 divided by the current average daily cost of nursing home care, that for this example is $144.67, equals 2143 days.2143 days equals a transfer penalty period lasting until November 15, 2022.This exceeds 60 months or 365 days times 5 that equals 1825 days.If the individual waits until after May 15, 2018 to apply, the large transfer occurred over five years ago and is not considered for the January application.The individual must serve a 70-day transfer penalty for the $10,000 transfer so he or she is not eligible until July 25, 2018.
(B) Contact Adult and Family Services Health Related and Medical Services staff when assistance is needed to determine the best case scenario for the individual.
