Medicaid Applications: Why It Makes Sense To Use A Lawyer – Begley Report

by: Begley Law Group

by Thomas D. Begley, Jr., Esquire, CELA


Medicaid applications are complex and extremely labor-intensive.  They require an enormous amount of time to collect and verify all of the necessary data that must accompany the application.  If an application is delayed for even one month because there is incomplete or incorrect information, the applicant has to pay from his or her own pocket for that month’s care.  Frequently, approvals of applications are delayed for many months, and the cost of that delay is significant.  An incomplete application will not be processed.

Medicaid is a joint federally state-funded program that pays for nursing home care and for care in the home and assisted living facilities (ALFs), for financially and medically-eligible applicants.  At our law firm, we assist our clients to prepare and file the complicated applications needed to obtain these valuable benefits.  We evaluate the legal issues that pertain to our client’s unique situation, and we develop asset protection plans that are viable to the full extent of the law.  We leave no stone unturned in applying the law to a client’s case.

An applicant must meet legal, medical and financial criteria.  If the individual cannot perform three or more of the activities of daily living (ADLs), the medical criteria is met.  To be financially eligible, an applicant cannot have more than $2,000 of available countable assets in his or her name.  The plan for the protection of assets in the context of potential Medicaid eligibility must be formulated within the limitations of the 60-month lookback rule and the community spouse resource rule.


Medicaid applications are filed with each county’s Board of Social Services.  Filings should be made in the county where the benefits will be received, rather than where the beneficiary formerly resided.  For example, if the applicant lived in Burlington County but entered an ALF or nursing home or is received home care in the home of a relative in Camden County, then the application should be filed in Camden County.  Applications may be filed in person or by mail and some County Boards of Social Services permit filing by mail.  Most counties require an appointment for in-person filings.  Many County Boards of Social Services have outstation locations.  The agency must establish outstation locations at each disproportionate share hospital and federally qualified health centers.  Many County Boards of Social Services have outstations at convenient locations, such as shopping malls.  Applications taken at these outstations are sent to the central county office for processing.


While the Medicaid recipient would be the logical person to file, that individual is generally frail or suffering from dementia and is unable to file.  “Someone acting responsibly for the applicant” is permitted to apply for benefits.  This usually includes a relative by blood or marriage, an authorized staff member of a public or private welfare agency, a physician or attorney, or an authorized staff member of an institution or facility in which the person is receiving care.


There are two considerations with respect to the timing of filing a Medicaid application.  The first consideration is don’t file too soon.  Avoid filing a Medicaid application during the lookback period, if the amount transferred would result in a penalty extending beyond the lookback period.  The second consideration is don’t file too late.  Trigger the beginning of the penalty period as soon as possible in appropriate circumstances.  A careful analysis must be made as to which is the proper filing date.  A miscalculation with respect to when to file can result in months or even years of ineligibility and can be extremely costly.


The application must be in writing on a form prescribed by the Agency and signed under penalty of perjury.  Perjury is a criminal offense.  Therefore, to avoid committing a criminal offense, it is of the utmost importance for the individual filing the application to do his or her “due diligence” in filing the Medicaid application.  The individual filing the application must complete the application truthfully and completely and submit it with all of the necessary exhibits attached.  Great care should be taken to review each exhibit to make sure that it is accurate and complete.


The State Medicaid Agency has an obligation to assist applicants in navigating the complexity of the State Medicaid Regulations. The Medicaid Agency is staffed with caseworkers, usually known as Income Maintenance Workers.  Most Medicaid agencies are understaffed, and the caseworkers do not really have time to be of much assistance in complete the application.  Many caseworkers view their job as reviewing the application and exhibits to be sure that it is complete, rather than providing assistance.  In fairness, caseworkers have a limited amount of time to assist applicants.


The following documents are needed when filing for Medicaid eligibility:

  • Copy of birth certificate/passport/baptismal certificate/naturalization papers/alien registration card;
  • Copy of photo identification;
  • Copy of death certificate, or marriage certificate/divorce papers;
  • Copy of Social Security card;
  • Copy of Medicare card;
  • Copy of secondary health insurance card (front & back of card);
  • Verification of monthly/quarterly premium payments;
  • Military discharge papers;
  • Copy of General Durable Power of Attorney;
  • Verification of monthly gross income (earned and unearned), which includes Social Security benefits, annuities, VA benefits and pensions;
  • Copies of life insurance policies, including cash values and death benefit;
  • Copies of all statements for checking accounts, savings accounts, retirement accounts, annuities, credit union accounts, brokerage accounts, Money Market accounts, Christmas club, and CDs for the last 60 months;
  • Copies of checks and verification of sources for deposits of $500 or more. Check amount may vary from county to county;
  • Verification of closed accounts either by a letter from the financial institution or a statement indicating account is closed.A zero balance is not verification of a closed account;
  • Copies of deeds for all real estate owned;
  • Verification of shelter expenses including tax bill, homeowner’s insurance policy, utility bills, gas/oil bill, water/sewer bill, and condo fee;
  • Copy of lease, if renting apartment/house;
  • Copy of prepaid burial contract (must be irrevocable);
  • Copy of deed for burial plot; and
  • Tax returns for five years.


As a general rule, once a Medicaid application is filed the applicant has 45 days in which to furnish any missing information.  If the information is not filed within that timeframe, the application is denied.  With respect to the time period to act on a complete application, the Medicaid Agency has 45 days.  In practice, it takes anywhere from six months to one, or even two, years for the Medicaid Agency to act on an application depending on the county and the complexity of the application.  Any time lost because the application is incomplete or because the application is defective, is totally lost time and the Medicaid applicant will have to pay for care during that lost time.  This is why it is important to have an application filed completely and correctly at the very beginning.  Delays are costly.


Each Medicaid Agency is responsible for the administration and enforcement of Pre-Admission Screening and Resident Review (PASRR).  The purpose of the PASRR is to determine medical eligibility.  Typically, the PASRR is conducted prior to admission to a nursing home or ALF and after a significant change in the resident’s physical or mental condition.  It is designed to prevent nursing home or ALF placement of persons suffering from mental illness or mental retardation, if they do not require nursing home care.  A PASRR is also used to determine medical eligibility for home care.  On a practical level, if a resident is entering a nursing home or ALF from home and will be applying for Medicaid prior to placement, the PASRR must be ordered prior to admission.  Medicaid will send a nurse to visit the individual and perform a medical examination.  If the applicant is already in the nursing home or ALF, the applicant should coordinate with the facility to arrange for the PASRR.  The PASRR should be requested early enough to give the Medicaid office ample time to complete the PASRR.  This will prevent a client from being financially eligible, but not medically eligible.


Under federal law, an agency must make eligibility for Medicaid effective no later than the third month prior to the month of application, if the individual receives services covered under the State Medicaid Plan and would have been eligible at the time those services were received had he or she applied.  This is called “retroactive eligibility.”  The applicant must have been medically and financially eligible as of the retroactive eligibility date.  The agency may make eligibility for Medicaid effective on the first day of the month, if the individual was eligible at any time during that month.  A separate application is required for retroactive eligibility.  The retroactive eligibility application must be filed within a certain period of time from the date of the initial application.


The community spouse resource rule essentially provides that the spouse remaining at home, called the community spouse, is permitted to retain one-half of the couple’s assets, to a maximum amount that is fixed annually.  This is called the Community Spouse Resource Allowance (CSRA).  The value of the marital home (if the community spouse resides in the home when eligibility is sought) and other assets such as an automobile, an Irrevocable Funeral Trust and burial plots, are exempt assets and not counted as part of the CSRA.  In 2022, the maximum amount the community spouse is permitted to have as of the eligibility date is $137,400, and there is also a floor for protection of modest assets.  This amount increases every year with inflation.  A resident of an ALF may be a community spouse.  The first day of the month in which a spouse becomes institutionalized that is, either enters a hospital and then goes to a nursing home or enters a nursing home directly, is the date the assets will be valued for purposes of the community spouse resource rule.  The spousal resource calculation is composed only of countable resources.


The spouse allowance is often called the Minimum Monthly Maintenance Needs Allowance (MMMNA).  The community spouse is entitled to MMMNA comprised of two components:  a basic allowance and an excess shelter allowance.  The allowance is adjusted annually on July 1 of each calendar year.


If the gross monthly income of the Medicaid applicant exceeds $2,523 per month in 2022, the applicant must establish a Qualified Income Trust (QIT), also known as a Miller Trust, prior to applying for Medicaid.  A portion of the applicant’s income is diverted into the QIT.


The applicant can only have $2,000 is countable available resources.


There will generally be a Medicaid lien against any assets in the applicant’s estate after he or she dies except for certain limitations (such as if he or she has a surviving spouse, surviving child under 21 or surviving disabled child).


Assets transferred within a period of 60 months prior to filing a Medicaid application are penalized.  The 60-month lookback rule, in essence, provides that the transfer of assets for less than fair market value (gifts) within 60 months immediately preceding the Medicaid application is presumed to have been made for Medicaid eligibility purposes.  Such transfers would render the applicant ineligible for a period of time, called a “transfer penalty.”  The penalty period is calculated using a formula that changes from time to time.  The penalty period begins to run from the time an individual is otherwise medically and financially eligible for Medicaid to pay for institutional care.  In other words, the penalty begins to run when the applicant would be eligible for Medicaid payments “but for” the penalty.  Transfers and gifts made more than 60 months prior to the application have no consequences in determining eligibility.


The Medicaid applicant will be responsible for a share of the cost of care.  The Medicaid applicant is entitled to:

  • A personal needs allowance of $50 per month if in a nursing home, and $117.75 per month for a resident in an ALF.An applicant receiving home care retains all of their income.
  • The amount necessary to pay for the Medicaid applicant’s medical insurance premiums.
  • The amount necessary to satisfy the MMMNA of the community spouse, if any. This includes the basic allowance and the excess shelter allowance.
  • A family member maintenance deduction for certain dependent family members.
  • A temporary housing allowance, if a physician has determined that it is likely that the individual will return home within six months. The maximum allowance of $150 may be deducted from the individual’s income per month for maintenance of his or her in the community.


In conclusion, the Medicaid application process is complex and time-consuming for the person preparing the application.  If the application is submitted incorrectly or if the application raises legal issues, there will be a significant delay in approval.  Every month of delay is costly to the applicant.  It is generally much cheaper to have a lawyer prepare the application to ensure that it is processed quickly and expeditiously and that no time is lost during which the applicant’s care must be paid for by the applicant.