STATE OF WISCONSIN Division of Hearings and Appeals

Transcription

1 DHA-15 (R10/97) STATE OF WISCONSIN Division of Hearings and Appeals In the Matter of (petitioner) DECISION ON REHEARING MED-40/62329 PRELIMINARY RECITALS Pursuant to a petition filed March 11, 2004, under Wis. Stat (5) and Wis. Admin. Code HA 3.03(1), to review a decision by the Milwaukee County Department of Human Services in regard to Medical Assistance (MA), a hearing was held on April 13, A decision was issued on June 2, 2004, and a rehearing request was timely filed. The rehearing request was granted on July 12, 2004, and the instant rehearing proceeding was conducted on August 18, 2004, at Milwaukee, Wisconsin. The issue for determination is whether the petitioner is ineligible for Institutional MA for a period of time due to divestment of $104,397 in December, There appeared at that time and place the following persons: PARTIES IN INTEREST: Petitioner: (petitioner) Represented by: Atty. Robert E. Bertram 350 Bishops Way Brookfield, WI Wisconsin Department of Health and Family Services Division of Health Care Financing 1 West Wilson Street, Room 250 P.O. Box 309 Madison, WI By: No appearance Milwaukee County Dept. of Human Services 1220 W. Vliet St, 2nd Floor Milwaukee, WI ADMINISTRATIVE LAW JUDGE: Nancy J. Gagnon Division of Hearings and Appeals FINDINGS OF FACT 1. Petitioner (SSN xxx-xx-xxxx, CARES #xxxxxxxxxx) is a resident of Milwaukee County.

2 2. The petitioner was admitted to a hospital on July 29, 2003, was subsequently transferred directly to a nursing home on August 6, 2003, and has remained there through the present time. His spouse, (petitioner's spouse), resides in the community. 3. An Institutional MA application was filed on the petitioner s behalf by his attorney, Robert Bertram, on December 28, The county agency scheduled an intake appointment for January 13, 2004, which was attended by the petitioner s holder of power of attorney, (redacted), his son. The agency s appointment letter, dated January 6, directed the representative to bring verification of Social Security number, identity, age, and citizenship to the January 13 appointment. See petitioner s Exhibit B. (redacted) did so. 4. At the January 13 appointment, the agency worker directed (redacted) to provide verification of his parents assets and income, and established another appointment for January 21, Attorney Bertram and (redacted) appeared for the petitioner at the January 21, 2004, appointment. Some documentation of the petitioner s assets and income as of July 29, 2003, and January 1, 2004, was provided. Per a verification letter dated January 21, 2004, the agency requested additional documentation, including proof of income from the (redacted) Trust. See Exhibit 4. Attorney Bertram and the agency worker met again on January 26, The attorney provided additional documentation. 6. No further contact occurred between the attorney or (redacted) and the agency worker before issuance of a denial notice on February 5, The negative notice states that the bases for denial of the MA application were failure to provide verification, excess assets, and excess income. 7. The combined assets of the petitioner and his spouse on July 29, 2003, were $227, Thus, the correct Institutional MA Asset Limit (or CSAS of $90,660 plus $2,000) for them was $92,660. The couple s countable assets on January 1, 2004, were $80, The petitioner s monthly income consists of $405 in Social Security, a $1, pension, $60.18 from an annuity, and $100 from the (redacted) Trust, for a total of $1, The county agency asserts that the petitioner divested $104, (from an annuity account, held jointly by the petitioner and his spouse) in December, The agency arrived at the divestment amount by asserting this scenario: starting with the cashed in value of one annuity account s value (previously owned by the petitioner and his wife) of $139, and subtracting the ¼ share retained by the spouse ($34,799.05) after the transfer, there is a divested difference of $104, The other ¾ of the account was allegedly transferred to the petitioner s children. There was no value received by the petitioner in exchange for his transfer. 10. Prior to October 17, 2003, the petitioner and his spouse, (petitioner's spouse), owned an annuity with Thrivent valued at $139, The annuity was cashed in no later than October 17, with all proceeds temporarily being deposited into (petitioner's spouse) savings account. A Thrivent agent was then directed to set up a new joint checking account with four owners (petitioner's spouse) and her three children. A misunderstanding occurred, and on November 18, 2003, the agent created three joint checking accounts: one owned by (petitioner's spouse) and child (redacted) for $46,384 (#(redacted)), one owned by (petitioner's spouse) and child (redacted) for $46,384 (#(redacted)), and one owned by (petitioner's spouse) and child (redacted) for $46,384 (#(redacted)). See Rehearing Exhibit (petitioner's spouse) advised Thrivent that it had erred, as she wanted one account to contain the annuity proceeds, not three. Therefore, on December 29, 2003, (petitioner's spouse) and her children closed account #(redacted) and #(redacted), and transferred the complete balances from those two accounts, $92,788.84, into the joint checking account owned by (petitioner's spouse) and her child (redacted) (#(redacted)). The balance in that account then became $139, The names of children (redacted) and (redacted) were also added to the account at that time as 2

3 joint owners. See Rehearing Exhibits 7, 8. No withdrawals were made from account (redacted) by anyone until at least January 14, DISCUSSION The petitioner seeks Institutional MA certification as of January 1, Per its February 5, 2004, notice, the agency denied that application due to failure to provide requested verification, excess assets, and excess income. During the April 13 hearing, the county also argued the petitioner was ineligible for MA due to a $104,397 divestment occurring in December, This ALJ issued a decision stating that the agency s denial rationales pertaining to failure to provide verification, excess assets, and excess income, were all incorrect. However, denial of the application on the basis of a $104,397 divestment was sustained. The petitioner sought rehearing regarding the divestment component of this decision. Findings of Fact #1 through #5 are taken verbatim from the earlier decision. Findings #6, 7, and 8 are also taken from the earlier decision, although they have been re-numbered. A person cannot be eligible for institutional/nursing home MA if he has nonexempt assets exceeding the relevant asset limit for his case. To prevent a person from simply giving away his assets when the specter of nursing home costs appears, the MA program has developed policies to limit eligibility in the event of such giveaways, or prohibited divestments. A divestment is a transfer of assets for less than fair market value. Sec (2)(a), Wis. Stats.; MA Handbook, Appendix A divestment or divestments made within 36 months (60 months if the divestment is to an irrevocable trust) before an application for institutional MA may cause ineligibility for the institutional type of MA. Sec (1)(f), Stats.; MA Handbook, App The ineligibility is only for nursing home care; divestment does not impact on eligibility for other medical services such as medical care, medications, and medical equipment (all of which are known as MA card services in the parlance). The penalty period is specified in sec (3), Stats., to be the number of months determined by dividing the value of property divested by the average monthly cost of nursing facility services ($4,542). MA Handbook, Appendix The petitioner owns an unimproved lot, a life insurance policy with cash value, an account at North Shore Bank, and two retirement accounts, none of which were divested. The focus of the agency s divestment position is an account with Thrivent, #(redacted). On July 29, 2003, an annuity account was jointly owned by the petitioner and his wife, with a value of $139, That annuity contract was cashed in. In a process ending on December 29, 2003, the petitioner removed himself from the ownership of those proceeds, with the result being a joint checking account titled in the names of (petitioner's spouse) and her three children account #(redacted). The petitioner argues that the divestment of his interest in the annuity proceeds to his wife in the summer of 2003 was a permitted divestment that does not make him ineligible for MA. He is correct that his relinquishment of control over the annuity proceeds, which occurred when the entire $139, in proceeds was deposited into a savings account owned solely by (petitioner's spouse), was a permitted divestment. State code and policy are clear in allowing such transfers from an institutionalized person to 3

4 his spouse without penalty. Wis. Admin. Code HFS (4)(cm); MEH, Appendix , item #8. The amount divested by the petitioner when all of the proceeds went into (petitioner's spouse) solo savings account was one-half of the proceeds - $69, because the joint asset ownership policy in place throughout 2003 attributed one-half of the joint assets value to each of the two owners. See MEH, Appendix (valid to ). Because (petitioner's spouse) owned one-half of the proceeds already, only the other half was divested to her. As was just mentioned, the petitioner s $69, divestment to his spouse in 2003 was a permitted divestment. However, it does not follow that the spouse can then divest her or the couple s assets to others during the lookback period. After an institutionalized person becomes eligible for MA (i.e., he applies, does not have excess income, and the household s assets are under the CSAS plus $2,000), his community spouse may divest assets included in the CSAS: Exceptions A divestment that occurred in the lookback period or any time after does not affect eligibility if any of the following exceptions apply: 2. The community spouse divested assets that were part of the community spouse asset share. a. After the institutionalized person is determined eligible, the community spouse can divest assets that are part of the community spouse asset share (23.4.2). S/he can give them to anyone without affecting the eligibility of the institutionalized spouse. (emphasis added) MEH, Appendix (4-1-99). Before the applicant is eligible for MA (such as during an earlier period of ineligibility due to excess assets), the community spouse cannot transfer their joint assets without incurring a divestment sanction. Wis. Stat (2)(a). Thus, if (petitioner's spouse) gave away assets belonging to herself or the petitioner during 2003, such a giveaway would have been a prohibited divestment that could create MA ineligibility. However, during this rehearing process, the petitioner has clarified that (petitioner's spouse) did not divest assets in 2003, under the policy provisions in place at the time. After placing the annuity proceeds in her savings account, (petitioner's spouse) ultimately placed the proceeds into a checking account on December 29, That account, #(redacted), was jointly owned by (petitioner's spouse) and her three children. Per policy, ownership of the account was considered to be held by all four persons: Joint Accounts Apply the following policy to savings, checking, NOW and share accounts, certificates of deposit, and similar arrange- 4

5 ments where the holders have equal access to the funds. Assign an equal share available to each client who is a holder of the joint account. Equal share means an amount in proportion to the number of account holders. If there are three holders, an equal share means each gets 1/3 of the account s balance. MEH, Appendix (valid to ). This policy was changed effective February 27, 2004, to treat any MA applicant/recipient joint account holder as the sole owner of the account. Id., ( ). The remaining question is, therefore, whether under 2003 policy, the petitioner s wife divested funds when she placed funds previously solely controlled by herself into a joint checking account with three other persons, none of whom are her spouse. Importantly, none of those persons withdrew funds from the account. If they had made such a withdrawal, it would have been a divestment: Jointly Held Assets When an institutionalized person owns an asset in common with another person and when s/he or the other person or any person acting on their behalf transfers the asset during the lookback period or anytime thereafter, s/he may be penalized for divestment if the transfer: 1. Reduces or eliminates the institutionalized person s ownership or control of the asset, or 2. Limits the institutionalized person s right to sell or Otherwise dispose of the asset. MEH, Appendix (4-1-03). If any of the children had made a withdrawal from the joint checking account, it would have been a divestment, because the withdrawal would have eliminated (petitioner's spouse) control over the withdrawn amount. However, because no withdrawals were made, there was theoretically no reduction or elimination of (petitioner's spouse) ownership or control of the account funds. This conclusion is also in accord with a response provided by DHFS call center analyst Bluma to private legal counsel when this question was posed. Thus, on the basis of the record before me, I conclude that no prohibited divestment occurred through at least January 14, 2004, which is after the filing of the MA application here. CONCLUSIONS OF LAW 1. As was stated in the June 2, 2004, decision in this matter, the county agency incorrectly denied the petitioner s MA application for failure to verify income information, excess assets, and excess income. 2. The petitioner s transfer of his share of his annuity proceeds to his spouse before or on October 17, 2003, was not a prohibited divestment for MA purposes. 5

6 3. The petitioner s spouse did not divest her own or the couple s assets in 2003 when she created a joint checking account in the names of herself and her three children, because no withdrawals were made from that account. 4. The previous decision s instruction to the county agency to compute a divestment penalty period (which it did, of 22 months) was an error, as no prohibited divestment has been established in this record. NOW, THEREFORE, it is ORDERED That the petition herein be remanded to the county agency with instructions to remove the 22 month divestment penalty period from the petitioner s case, and to certify him for MA effective January 1, 2004, if he was otherwise eligible. This action shall be taken within 10 days of the date of this decision. APPEAL TO COURT You may also appeal this decision to Circuit Court in the county where you live. Appeals must be filed no more than thirty (30) days after the date of this hearing decision (or 30 days after a denial of rehearing, if you ask for one). Appeals concerning Medical Assistance (MA) must be served on Department of Health and Family Services, P.O. Box 7850, Madison, WI, , as respondent. The appeal must also be served on the other PARTIES IN INTEREST named in this decision. The process for Court appeals is in sec of the statutes. Given under my hand at the City of Madison, Wisconsin, this 27 th day of August, Nancy J. Gagnon Administrative Law Judge Division of Hearings and Appeals 27/NJG 6