submitted by Caroline McDonough, Esq.
The New York State (NYS) Legislature passed the Fiscal Year 2020-2021 budget on Friday, April 3, 2020. The budget creates significant changes to the Medicaid program that will greatly impact the lives of many NYS residents. Particularly, seniors and disabled individuals who are receiving health care services in the community are likely going to face more challenges in receiving such services. Below are the most notable changes that are likely to impact the lives of the seniors and disabled as well as the provisions that were threatened to be cut but were ultimately preserved thanks to the efforts of members of the Legislature.
Change: Two and a half year “look-back” for long-term care services in the community beginning October 1, 2020.
Beginning October 1, 2020, the new Medicaid rules will require a full review of an individual’s finances, going back two and a half years, if that person is seeking Medicaid coverage of long-term care services in the community. Unfortunately, a look-back creates an added barrier to accessing necessary health care services, especially for seniors and disabled individuals. It is important to note though that the initial proposals sought to impose a five-year look-back period. Without the efforts of certain members of the Legislature to reach a final compromise of a two and a half year look-back, the barriers to coverage in the community would have certainly been much greater for many.
This two and a half year look-back will likely work in the same way that the five-year look-back for Medicaid nursing home coverage does. Thus, beginning on October 1, 2020, if an individual is looking to enroll in a Medicaid run long-term care services program such as the Consumer Directed Personal Assistance Program (CDPAP),that person first must provide two and a half years of financial records (i.e. bank statements, retirement plan statements, etc.) to the Local Department of Social Services (LDSS). The LDSS is the entity that processes Medicaid applications and will review all of the provided documents in order to determine eligibility.
How will this look-back affect eligibility?
If the LDSS determines there were transfers made for less than fair market value, commonly referred to as an “uncompensated transfer,” then a penalty period is imposed. The applicant must then privately pay for services for the length of the penalty period BEFORE Medicaid will begin to cover the services.
It is not clear, based on the language of the final bill, whether individuals already receiving Medicaid coverage of long-term care services in the community will also be subject to the look-back. There are concerns that if this were the case, then when Medicaid enrollees are due to recertify, a look-back could result in them having a penalty period imposed on them and potentially losing services. However, the current is that individuals who are already enrolled in Medicaid long-term care services will be grandfathered into the program and eligibility will continue regardless of past financial transfers.
What is a transfer for less than fair market value?
Generally, the LDSS will want further clarification as to where or how certain large transfers were spent. For example, if an individual transfers property during the look-back period, then the LDSS will inquire as to how the proceeds from the transfer were spent. This is because there is a presumption in the law that large transfers made during the look-back period were done for the purpose of qualifying for Medicaid. There are a few exceptions to this presumption, but it can often prove difficult to overcome. If an exception cannot be met nor a valid explanation can be provided as to why the funds were transferred during the look-back period, then the LDSS will impose a transfer penalty upon the person seeking Medicaid coverage.
How does the LDSS determine the penalty?
Currently, it appears that the formula used when calculating a transfer penalty for long-term services in the community will be the same as that used when calculating transfer penalties for nursing home Medicaid applicants. A transfer penalty is determined by taking the total value of all transfers made for less than fair market value and dividing that by the regional rate for the cost of nursing home care. The regional rate for Western New York in 2020 is $10,720. Therefore, if it is determined that an individual seeking Medicaid coverage of long-term care services made uncompensated transfers during the look-back period, totaling $10,720, then that individual will be assessed a 1-month penalty period. This means that in order for Medicaid to cover long-term care services, this individual would need to privately pay for 1-month of services. Once that single month is paid, Medicaid will begin covering those services.
How will this impact seniors and disabled individuals?
Clearly, the potential to be assessed a transfer penalty could have serious financial consequences for people seeking Medicaid coverage of long-term care services. Many individuals may not be in a position to privately pay for such services, potentially forcing them to forego services that are otherwise medically necessary.
In addition to the financial issues that will present, gathering the necessary financial records can prove burdensome and often requires extensive efforts. Not only does this create more work for Medicaid applicants and their families, but it will likely prolong enrollment into long-term care programs in the community. It is common to hear that a nursing home Medicaid application can take up to an entire year due to all the documentation that is needed for the look-back. However, there is an important difference to note between nursing home applicants and applicants for long-term care services in the community. Generally, a nursing home Medicaid application is submitted when the individual is already living in the facility or has already received the needed care from the nursing home. However, for individuals in the community, they must wait for approval before services can begin, leaving them without the care or assistance that is often crucial to maintaining their health and well-being in the community.
Generally, the LDSS is required to make Medicaid determinations within 45-days, but even with current applications, such determinations are often not made that quickly. Thus, it is inevitable to expect added delays in receiving determinations with the implementation of the look-back. Also, while there is nothing in the new legislation to indicate immediate need applications for Medicaid will be delayed, individuals will still need to meet the heightened criteria for Medicaid eligibility. Questions as to whether processes will be put in place to ensure these applications are expedited remain unanswered.
The availability of long-term care services in the community upholds the principals of the Supreme Court’s Olmstead decision, which found individuals, regardless of disability, have a right to live in the least restrictive setting. It is concerning to know that this principal may become less attainable through the imposition of a look-back like the one slated to go into effect this October.
Change: Eligibility criteria for enrollment in Medicaid’s Consumer Directed Personal Assistance Program (CDPAP) and Personal Care Services (PCS).
Beginning October 1, 2020, Medicaid applicants will have to meet heightened standards in order to enroll in most programs that offer long-term care services in the community. Previously, a conflict-free assessment was conducted in order to determine whether the individual seeking Medicaid coverage required at least 120 consecutive days of care, and if so, this qualified the individual for enrollment and the provision of some level of services in community based programs like CDPAP or PCS. Starting in October, the eligibility criteria will become more strict. In order to be eligible, individuals will need to be found as requiring at least limited assistance with two or more activities of daily living (ADLs).
There is an exception to the heightened standards. For individuals with a dementia or Alzheimer’s diagnosis, eligibility for enrollment is met if it is found that at least supervision is needed for assistance with one or more ADL. This is exemption recognizes the type of assistance needed among these populations present unique issues.
What are Activities of Daily Living?
When determining whether an individual is eligible to enroll in a program like CDPAP, an assessment of the individual’s ability to perform ADLs and what level of assistance may be necessary in order to complete the ADLs must be done. Performing tasks such as bathing, personal hygiene, feeding, walking, etc. are just a few of the types of things considered ADLs and assessed when determining eligibility.
Does this affect current recipients of long-term care services in the community?
While these new standards will make it more challenging for disabled individuals to enroll in certain Medicaid programs, those who are already in receipt of long-term care services in the community will not be required to meet these heightened standards in order to maintain eligibility.
Change: Determination of eligibility for enrollment in CDPAP and PCS will change from the Local Department of Social Services (LDSS), Managed Long Term Care (MLTC) Plans, or Medicaid Managed Care (MMC) providers to an independent assessor, contracted through the Department of Health (DOH), by October 1, 2022.
Historically, individuals receiving Medicaid coverage of long-term care services in the community have undergone initial assessments as well as reassessments to determine what level of care is needed. These assessments were conducted by the agency that provided the care. However, with the new budget, these assessments will be done by an agency of DOH’s choosing. The manner in which these assessments are performed and the criteria used to establish and identify what level of assistance and types of services are needed are to be developed by DOH. Thus, it is not clear what future applicants can expect when seeking Medicaid coverage for long-term care services.
There are serious concerns about implementing an assessment system of this sort. It is more likely that an agency that is directly providing services to individuals in the community will have more familiarity with the unique needs of those individuals. The appointment of an independent assessor however, allows for coverage determinations to be made by those who do not regularly treat or interact with the individuals receiving and needing care.
Protected Provisions: Spousal impoverishment budgeting rules will remain the same for individuals seeking Medicaid coverage of long-term care services.
Initially, the final budget sought to propose changes to the Medicaid program that would drastically cut the amount of resources that a married individual in the community may have when his or her spouse seeks to receive Medicaid coverage of long-term care services. Thankfully, through the strong advocacy efforts of members of our Legislature, the spousal impoverishment provisions remain intact, permitting community spouses to keep income and assets that allow for a practical standard of living and prevent poverty.
What is spousal impoverishment budgeting?
Spousal impoverishment budgeting was designed to prevent a community spouse, who does not need Medicaid covered services, from having to pay large portions of his or her income and resources towards the cost of care for the “sick” spouse, often referred to as the institutionalized spouse. This budgeting is available when one spouse is receiving nursing home care or long-term care services in the community through a MLTC, MMC or the LDSS, and the other spouse remains in the community without a need for Medicaid coverage.
Currently, spousal impoverishment budgeting in NYS, permits the community spouse to keep income up to $3,216 each month and resources up to $74,820 or half the couple’s combined resources up to $128,640, whichever is greater. The budget proposal sought to decrease the allowable resource amount for the community spouse to $25,728, which would have had severe economic consequences for married couples seeking Medicaid coverage for one spouse.
Protected Provisions: Spousal refusal is still available to a community spouse who is unable to contribute to the cost of care for an institutionalized spouse.
The proposed changes to the final budget threatened to eliminate spousal refusal protections available to married individuals applying for Medicaid coverage of nursing home care. Thankfully, the Legislature ensured this provision remained unharmed, preventing low-income couples from having to choose between divorce or poverty.
What is the spousal refusal provision?
Generally, a community spouse has a legal obligation to contribute towards the cost of care for the institutionalized spouse. However, such financial obligations can prove to be incredibly burdensome for low-income couples. Therefore, if a community spouse fails or refuses to contribute towards the cost of care, then Medicaid coverage is still available for the institutionalized spouse. A spousal refusal needs to be submitted in writing at the time of or during the pendency of the Medicaid application, and the institutionalized spouse is required to assign his or her right to pursue support for the cost of care against the community spouse to the LDSS.
If not for spousal refusal, married couples may face a situation where divorce would prove to be the most feasible option in order to lessen the financial obligations of the community spouse. Spousal refusal ensures that the institutionalized spouse is able to receive Medicaid coverage of the medically necessary services and prevents the community spouse from having to give up a portion of his or her already modest income.
PLEASE NOTE: The information provided above is subject to change and should not be construed as legal or medical advice.