Medicaid: No Transfer Penalty Where Transfer Was Exclusively for Purpose Other Than to Qualify for Medicaid

Transfer penalty cannot be imposed where transfer was exclusively for purpose other than to qualify for Medicaid. Petitioner was admitted to a nursing home with dementia and her doctor states she cannot make legal decisions. Petitioner owned her home jointly with her daughter following the death of Petitioner’s husband. The daughter then conveyed the home to satisfy a debt and apparently left town; the ALJ recited that her whereabouts were unknown. Due to her dementia, Petitioner did not know that she no longer owned the home. A transfer penalty was imposed. Petitioner sought to avoid the penalty by showing the transfer was for a reason other than to qualify for Medicaid. The Georgia Manual provided that this exception to application of the transfer penalty exclusion does not apply to the transfer of a homeplace. See Section 2342. The ALJ found that the Georgia Manual conflicts with federal law, 42 U.S.C.§ 1396p(c)(2)(C)(ii), on this point and that the State cannot impose a penalty if the transfer was exclusively for a purpose other than qualifying for Medicaid. Citing Hines v. Davidowitz, 312 U.S. 52, 67 (1941), the ALJ found that Georgia’s Medicaid Manual conflicts with federal law to the extent it imposes a transfer penalty even if the transfer was made exclusively for a purpose other that to qualify for Medicaid. In determining whether the exemption applied, the ALJ found that the nursing home resident was “elderly, vulnerable and suffers from dementia.” She was taken advantage of and did not even know the home had been sold. Under these facts, the Court found that Petition met her burden and no penalty could be imposed. By footnote the Court found that even if the exception did not apply, Petitioner would still be entitled to an undue hardship exception under Section 2345-2 (“the applicant or representative must have taken legal action and equitable remedies to recover the asset before undue hardship can be considered”). Since she was unable to take action on her own, she discharged her duty to recover the property by engaging Georgia Legal Services and seeking help from Adult Protective Services.

OSAH-Whitfield-Miller-4-2008.pdf (April 29, 2008).