Library: Policy

317:50-1-6. Determining financial eligibility for the Medically Fragile Waiver program

Revised 9-14-18

Financial eligibility for Medically Fragile Waiver services is determined using the rules on income and resources according to the category to which the individual is related. Only individuals who are categorically related to Aged Blind and Disabled (ABD) may be served through the Medically Fragile Waiver. Income, resources and expenses are evaluated on a monthly basis for all individuals requesting payment for the Medically Fragile Waiver Program.In determining income and resources for the individual categorically related to ABD, the family includes the individual and spouse, if any. However, consideration is not given to the income and resources of a spouse included in a Temporary Assistance for Needy Families case. 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. Financial eligibility for individuals in Medically Fragile Waiver program services is as follows:

(1) Individual without a spouse.For an individual without a spouse, the following rules are used to determine financial eligibility.

(A) Income eligibility. To determine the income of the individual, the rules in (i) through (iii) of this subparagraph apply.

(i) If payment of income is made to the individual and another person(s), the income is considered in proportion to the individual's interest.

(ii) If a legal instrument exists which specifies terms of payment, income is considered according to the terms of the instrument.

(iii) After determination of income, the gross income of the individual cannot exceed the categorically needy standard in DHS form 08AX001E, Schedule VIII. B. 1., to be eligible for Medically Fragile Waiver services.If the individual's gross income exceeds that standard, refer to SoonerCare rules for establishing a Medicaid Income Pension Trust [OAC 317:35-5-41.6(6)(B)].

(B) Resource eligibility. In order for an individual without a spouse to be eligible for Medically Fragile Waiver services, his/her countable resources cannot exceed the maximum resource standard for an individual listed in DHS form 08AX001E, Schedule VIII. D.

(C) Equity in capital resources.If the equity in the individual's capital resources is in excess of the maximum resource standards, certification is delayed up to thirty (30) days providing plans are made for the applicant to utilize the excess resource. Certification is made at the point the excess resources have been exhausted, with the effective date of certification being shown as the date on which the resources came within the standard.If the excess capital resources cannot reasonably be expected to come within standards in one month, the application is denied.

(2) Individual with a spouse who receives Home and Community-Based Services (HCBS), or is institutionalized in a Nursing Facility (NF) or Intermediate Care Facility for Individuals with Intellectual Disabilities (ICF/IID), or is sixty-five (65) or over and in a mental health hospital.For an individual with a spouse who receives HCBS, or is institutionalized in a NF or ICF/IID, or is sixty-five (65) or over and in a mental health hospital, resources are determined for each individual as the amount owned by each individual plus one-half of the jointly owned resources of the couple.Once this separation of assets is made, a resource of either spouse is not considered available to the other during the receipt of HCBS program services.

(A) Income eligibility.Income is determined separately for an individual and his/her spouse if the spouse is in a HCBS program, or is institutionalized in a NF or ICF/IID, or is sixty-five (65) or older and in a mental health hospital. The income of either spouse is not considered as available to the other during the receipt of Medically Fragile Waiver services.The rules in (i) - (v) of this subparagraph apply in this situation:

(i) If payment of income is made solely to one or the other, the income is considered available only to that individual.

(ii) If payment of income is made to both, one-half is considered for each individual.

(iii) If payment of income is made to either one or both and another person(s), the income is considered in proportion to either spouse's interest (if payment is to that spouse) or one-half of the joint interest if no interest is specified.

(iv) If a legal instrument exists which specifies terms of payment, income is considered according to the terms of the instrument.

(v) After determination of income, the gross income of the individual cannot exceed the categorically needy standard in DHS form 08AX001E, Schedule VIII. B. 1., to be eligible for Medically Fragile Waiver services.If the individual's gross income exceeds this standard, refer to SoonerCare rules for establishing a Medicaid Income Pension Trust OAC 317:35-5-41.6(6)(B)].

(B) Resource eligibility.In order for an individual with a spouse who receives HCBS, or is institutionalized in a NF or ICF/IID or is sixty-five (65) or older and in a mental health hospital to be eligible for the Medically Fragile Waiver services, his/her countable resources cannot exceed the maximum resource standard for an individual listed in DHS form 08AX001E, Schedule VIII. D.

(C) Equity in capital resources.If the equity in the individual's capital resources is in excess of the maximum resource standards, certification is delayed up to thirty (30) days providing plans are made for the applicant to utilize the excess resource.Certification is made at the point the excess resources have been exhausted, with the effective date of certification being shown as the date on which the resources came within the standard.If the excess capital resources cannot reasonably be expected to come within standards in one month, the application is denied.

(3) Individual with a spouse in the home who is not in a Homeand Community Based Services program.When only one individual of a couple in their own home is in a HCBS Program, income and resources are determined separately.However, the income and resources of the individual who is not in the HCBS program (community spouse) must be included on the application form.At redetermination of eligibility, the community spouse's income must be included in the review process.During any month that the individual is receiving Medically Fragile Waiver program services, the income of the community spouse is not considered available to that individual.The following rules are used to determine the income and resources of each:

(A) Income eligibility.To determine the income of both spouses, the rules in (i) - (v) of this subparagraph apply.

(i) If payment of income is made solely to one or the other, the income is considered available only to that individual.

(ii) If payment of income is made to both, one-half is considered for each individual.

(iv) If a legal instrument exists which specifies terms of payment, income is considered according to the terms of the instrument.

(v) After determination of income, the gross income of the individual in the Medically Fragile Waiver program cannot exceed the categorically needy standard in DHS form 08AX001E, Schedule VIII. B. 1., to be eligible for care. If the individual's gross income exceeds this standard, refer to SoonerCare rules for establishing a Medicaid Income Pension Trust [OAC 317:35-5-41.6(6)(B)].

(B) Resource eligibility.To determine resource eligibility, it is necessary to determine the amount of resources for both spouses for the month of the individual's application for the Medically Fragile Waiver program.Of the resources available to the couple (both individual and joint ownership) an amount will be protected for the community spouse which will not be considered available to the spouse receiving Medically Fragile Waiver program services. The amount determined as the spousal share is used for all subsequent applications for SoonerCare, regardless of changes in the couple's resources. The protected spousal share cannot be changed for any reason. When application for SoonerCare is made at the same time the individual begins receiving Medically Fragile program services, DHS Form 08MA012E, Title XIX Worksheet, is used.

(i) The first step in the assessment process is to establish the total amount of resources for the couple during the month of application of the spouse into the Medically Fragile Waiver program (regardless of payment source).

(ii) The community spouse's share is equal to one-half of the total resources of the couple not to exceed the maximum amount of resource value that can be protected for the community spouse, as shown on DHS form 08AX001E, Schedule XI.

(iii) The minimum resource standard for the community spouse, as established by the OHCA, is found on DHS form 08AX001E, Schedule XI.When the community spouse's share is less than the minimum standard, an amount may be deemed from the other spouse's share to ensure the minimum resource standard for the community spouse.If the community spouse's share equals or exceeds the minimum resource standard, deeming cannot be done.

(iv) If deeming is necessary to meet the minimum resource standard for the community spouse, the amount that is deemed must be legally transferred to the community spouse within one year of the effective date of certification for SoonerCare.At the first redetermination of eligibility, the worker must document that the resources have been transferred. After the first year of SoonerCare eligibility, resources of the community spouse will not be available to the other spouse and resources cannot be deemed to the community spouse.

(v) After the month in which the institutionalized spouse and community spouse have met the resource standard and the institutionalized spouse is determined eligible for benefits, no resources of the community spouse, regardless of value, will be considered available to the institutionalized spouse.If the resources of the community spouse grow to exceed the original deemed amount, the State cannot require the community spouse to apply any of these excess resources toward the cost of the care of the institutionalized spouse.

(vi) When determining eligibility for SoonerCare, the community spouse's share of resources is protected and the remainder considered available to the spouse receiving Medically Fragile Waiver program services.

(vii) The resources determined in (i) - (vi) of this subparagraph for the individual receiving Medically Fragile Waiver program services cannot exceed the maximum resource standard for an individual as shown in DHS form 08AX001E, Schedule VIII. D.

(viii) Once the dollar value of the community spouse's share of resources is established for the month of the other spouse's entry into the Medically Fragile Waiver program, that amount is used when determining resource eligibility for a subsequent SoonerCare application for long-term care for either spouse.

(ix) Once a determination of eligibility for SoonerCare is made, either spouse is entitled to a fair hearing.A fair hearing regarding the determination of the community spouse's resource allowance is held within thirty (30) days of the date of the request for the hearing.Either spouse is entitled to a fair hearing if dissatisfied with a determination of:

(I) the community spouse's monthly income allowance;

(II) the amount of monthly income otherwise available to the community spouse;

(III) determination of the spousal share of resource;

(IV) the attribution of resources (amount deemed); or

(V) the determination of the community spouse's resource allowance.

(x) The rules on determination of income and resources are applicable only when an individual receiving Medically Fragile Waiver program services is likely to remain under care for thirty (30) consecutive days.The thirty (30) day requirement is considered to have been met even if a hospital stay interrupts it or the individual is deceased before the thirty (30) day period ends.

(C) Excess resources.If the equity in the individual's capital resources is in excess of the maximum resource standards, certification is delayed up to thirty (30) days providing plans are made for the applicant to utilize the excess resource.Certification is made at the point the excess resources have been exhausted, with the effective date of certification being shown as the date on which the resources came within the standard.If the excess capital resources cannot reasonably be expected to come within standards in one month, the application is denied.

(4) 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 thirty-six (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 sixty (60) months.

(B) For purposes of this paragraph, an institutionalized individual is one who is receiving HCBS 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 skilled nursing facility or hospital 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 twenty-one (21) or is blind or totally disabled as determined by the Social Security Administration;

(III) a sibling who has equity interest in the home and resided in the home for at least one (1) 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 (2) 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 the Social Security Administration.The transfer may be to a trust established for the benefit of the individual's child.

(vi) the asset is transferred to a trust established solely for the benefit of a disabled individual under the age of sixty-five (65).

(vii) the denial would result in undue hardship.Such determination should be referred to DHS 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 Medically Fragile Waiver 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 re-determined 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 Medically Fragile Waiver program services for a period of asset ineligibility.

(K) When assets 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.

(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.

(5) 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 sixty (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 Medically Fragile program services.

(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.

(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 DHS form 08AX001E.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 that would apply:

(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 twenty-one (21) or is blind or totally disabled as determined by the Social Security Administration; or

(III) a sibling who has equity interest in the home and resided in the home for at least one (1) 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 (2) 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 sixty-five (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 DHS 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 Adult Protective Services 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 Medically Fragile Waiver 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 re-determined 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 Medically Fragile Waiver 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 (2) institutionalized spouses.

(6) 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 (5) 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 317:50-1-6

Issued 3-15-17

1.When an individual eligible for the Medically Fragile Waiver applies for long-term-care services (LTC), 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 LTC services if it were not for the transfer penalty.This is normally the medical eligibility date.

(1) The Oklahoma Health Care Authority (OHCA) and/or 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 OHCA and/or the area nurse determines that the individual does not meet nursing facility level of care or does not recommend Home and Community Based 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 OHCA and/or the area nurse of the denial.

(4) When AFS LTC staff denies the LTC 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 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 nursing facility level of care 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.When the individual waits until after May 15, 2018 to apply, the large transfer would have occurred over five years ago and is not considered for the January application.The individual must serve a 70-calendar 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.