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Filing a Medicaid application for long-term care in Chicago or any part of Illinois can be a substantial undertaking, especially when asset protection planning is involved in the process. Some nursing facilities will do it for you but they are precluded from providing any advice or implementing any legal measures designed to protect assets of the applicant or the applicant’s family. That is why most of our clients look for legal representation in the filing of a Medicaid application for long-term care so that every asset preservation advantage that is legal and ethical can be obtained in the process.
When nursing homes can cost $8000-$12,000 per month, it makes sense to be very careful and obtain the correct advice before embarking on this process. There can be a lot at stake for the applicant and also the individuals that the applicant leaves behind in his or her household such as spouse, children etc.
What can make this process especially difficult is, if the applicant is no longer able to assist you in the gathering of the below listed information, and has not designated anybody to have the authority to know where the below information can be obtained.
In understanding the scope of these tasks, below are the major areas to be focused on in preparing a Medicaid application:
- A Vision Meeting – with the clients so that they understand the scope of what is involved;
- Examine Powers of Attorney – If in existence, or reliance on the Guardianship process – to obtain the authority to act on behalf of the applicant;
- Inventory of Assets – must be prepared and be thorough;
- Existing estate planning document – must be examined and understood;
- Trusts and other estate planning vehicles, if any – must be examined and understood if funded;
- Nursing Home or other facility contract – must be examined and understood;
- Collection and review of documents regarding financial accounts for the last 60 months – must be thorough and complete;
- All Medicaid Asset Protection Strategies – must be implemented PRIOR to the filing of the Medicaid application;
- The Medicaid Application – must be prepared thoroughly and accurately;
- The Post Application Filing Audit by the Government – must be anticipated and prepared;
- Preparation of an Appeal of a unfavorable Medicaid decision – must be prepared;
- Annual Redetermination of Medicaid eligibility for the applicant – must be prepared annually.
Additional Key Points:
- When should Medicaid asset protection strategies be undertaken? Whatever strategies are to be undertaken to preserve assets should be done in the month before the filing of the Medicaid application.
- While there is in some cases a temporary relaxation by the State of Illinois regarding examination of underlying assets and resources due to the pandemic, no one can rely that this temporary relaxation of examination procedures will continue once the pandemic has ended.
- What if there are no assets remaining? If there are little or no assets to protect, the task is made somewhat easier. However, if they’re are little or no assets to protect because these assets have been erroneously or unscrupulously transferred away from the applicant during the last five years to third parties without any consideration in return ( Medicaid refers to these types of transfers as “uncompensated transfers” ) then the task of obtaining Medicaid approval with such an application is made much harder. The reason is that penalties will be imposed for uncompensated transfers. And without assets to pay through the penalty period created by such transfers, obtaining eligibility will be difficult.
- If the application is approved, are there still tasks to be performed ? Once an approval for Medicaid is obtained in a Notice of Decision it is important to be sure that the nursing home files the proper “admit” documentation in order to begin the payment stream to flow to the nursing home to be used for the care of the applicant.
- What if the application is denied? If a denial of Medicaid is received in a Notice of Decision, then the applicant or their representative must make a prompt choice whether to appeal during that appeal time allowed (usually 60 days from the date of the notice of decision) and also whether to request a hardship waiver. Or the choice may be made to just accept the penalty or Spenddown amount that Medicaid is asserting in their Notice of Decision.
- What if the applicant is married? If the applicant is married, all of the assets and transactions attributable to the non-applying spouse will also be subject to scrutiny in the Medicaid application for the spouse who is applying.
- What if the applicant acquires or inherits money unexpectedly? If after an applicant is approved, the applicant acquires additional funds either through an inheritance or some other method or means, then there is required reporting by applicant about the newly acquired funds to Medicaid within 10 days of receipt. Then, serious consideration must be given to consider whether or not there are enough funds to warrant a removal of the applicant from the Medicaid system, planning again with the newly acquired assets, and then reapplying after the new planning is completed.
- What if the applicant dies? If the Medicaid applicant should die while their Medicaid application is pending approval, please be aware that it may be necessary to continue to pursue the approval of the application to cover time periods of coverage that accrued after the filing of the application but before the applicant’s death.
Needless to say, there are numerous concerns that arise in the Medicaid Application preparation and filing process.
On behalf of your loved one, consider obtaining the necessary assistance before filing a Medicaid Application.
Anthony B. Ferraro
DiMonte & Lizak, LLC