A.V. suffered from Alzheimer’s disease and was admitted to a nursing home in January 2021. Thereafter, she submitted a Medicaid application for benefits. On her application, she reported several transfers for less than fair market value during the look-back period. She transferred various amounts to her kids and grandkids for things like wedding gifts, help with a down payment on a home, and car purchases. A.V. had specific dates and amounts for each recipient and presented verification to the Medicaid office. All transfers totaled roughly $25,000.

In accordance with 42 U.S. Code § 1396p(c)(2)(C), a Medicaid applicant will not be ineligible for benefits due to transfers during the look-back period if the applicant demonstrates to the state that the transfers were made for a purpose other than to qualify for benefits.

Many states, in their state Medicaid rules, have an exception for counting an asset for Medicaid-eligibility considerations if the applicant is trying to sell the property. Ohio, however, was not one of those states. But, in a recent case out of the First Appellate District of Ohio, the court ruled that the state must adhere to the Social Security eligibility rules on the topic and allow for a reasonable-efforts exclusion.

In this case, Diana entered into a care facility and applied for Medicaid benefits several months thereafter. Her application was denied due to the value of a piece of real property that Diana had on the market for the prior year. Diana appealed her Medicaid denial and the state department affirmed the denial. Diana again appealed and the trial court upheld the denial. Again, Diana appealed; the appeals court ruled in her favor.

In 2014, the Centers for Medicare and Medicaid Services (CMS) published final rules that states must abide by in their waiver programs for home and community-based services (HCBS). Since then, the implementation of the new rules has been delayed – first, so that states had more time to comply, and then later due to the pandemic. However, CMS has announced that they are holding tight to the latest deadline of March 2023.