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Practical Considerations when Preparing Medicaid Applications

If you agree to file a client’s Medicaid application as part of your representation, here are a few practical considerations. Keep in mind, these suggestions are how we handle matters in our office. If you have a different approach, that’s fine. If you have suggestions on other ways to approach applications, we’d love to hear from you.


First, begin with your fee agreement or letter of representation. Set out the terms of representation. If your agreement is a flat-fee agreement, it is critical to define the scope of representation. How far does your representation go? Stated otherwise, when does it stop? Don’t agree to fight the case beyond the level you’re willing to tackle under your flat-fee agreement. If another fee will be due at some point, define the period covered by your agreement and when the new fee will be due.

Second, set expectations in writing. Begin in the fee agreement and, as necessary, have clients sign additional documents acknowledging what you will do and what they must do. In virtually every case, we have clients sign an acknowledgment that their case will be denied if they do not provide the necessary verification. Tell the client what is needed. Give them a written checklist. We ask clients to complete questionnaires so we collect information in two ways.

Third, come up with a game plan. You don’t have to have all of the specifics immediately, but until you know the game plan, you don’t know what is necessary to prepare the application.

Next, we schedule a 2nd meeting about 10 days out. If problems were identified during the first meeting (e.g. life insurance) we provide specific instructions concerning what we need to address those problems. We approach applications playing offense, not defense so if we spot problems, we want to deal with them head-on. Our timelines frequently move up if we are hired near the end of the month; this may impact our fee since we have to stop working on other matters to address eligibility issues before month-end. In our office, we do not take over money, so we’re providing direction. We follow up to determine whether the client followed our direction, but sometimes they drop the ball.

The Application:

During 2nd meeting, we review documents the client brings in. Usually, something is missing so we create second checklist listing items still missing. We begin preparing Form 700 with the client present. The goal is to have the completed application at end of the meeting. We have the client sign all required Medicaid forms. In our office, we do not sign client Medicaid forms since they must be signed under penalty of perjury.

Basic forms that must be submitted include:

– Form 700
– Form 5459 – authorization for release of information (we have our contact information pre-typed on form)
– Form 216 (citizenship)
– Form DMA 315 – Notice of Estate Recovery
– DHS Form 985 – burial exclusion and designation form
– HIPAA Notice of Privacy Practices
– DMA 285 – third party liability and health insurance
– Form 106 – Insurance Clearance
– Form 987 – Designation of Cemetery Plots
– Form 129 – Transfer of Assets to Spouse

The following forms are collected from the nursing home:

– DMA 59 with hospital dates
– Form 958 (patient fund account)
– If on hospice, we also need a hospice communicator form and a new DMA 59 discharging resident to hospice

If the applicant is on hospice, keep in mind that hospice bills Medicaid and reimburses the nursing home.

If the client is seeking home and community-based services, Elderly Disabled Waiver Program (formerly CCSP), then you will need an Elderly and Disabled Waiver Communicator Form 5588 (Level of Care/LOC)

If the applicant is Veteran, you will need a completed VA Communicator form. We usually get this from the Georgia Department of Veterans Service.

If documents were missing, we usually schedule a third meeting within 7 days.

Playing Offense:

Once you have all of the verification, evaluate (or re-evaluate) when the application needs to be filed. Considerations include when eligibility was achieved, and whether IMEs and retroactive coverage are necessary. Also, do we need to get a transfer penalty started?

  • What is an IME? Can only back 90 days. Cannot get IME if there is a transfer penalty. Must be a patient liability greater than zero. No effective IMEs if all patient income is transferred to community spouse.
  • What is a transfer penalty? When does it start? How do you get it to start?

If there is a community spouse, estimate community spouse resource allowance. Estimate patient cost-share and instruct resident (or agent) to pay cost-share while the application is pending.

Counsel client on whether to keep Medicare Supplement and Part D (with IME allowing the resident to keep income to pay the premium)

Stop all non-required deductions from income (except health insurance premiums if keeping insurance).

Determine whether QIT is needed and, if so, get trust in place and documentation that QIT was properly established and funded (this includes getting POA if the agent is setting up QIT). Usually, we provide client with example checks for the first month

If exempt transfers occurred, document justification for transfers.

  • For example, if the home was transferred to caregiver-child, then get proof the child lived in the parent’s home and provided care for two or more years. The caseworker is looking for DL or mail (e.g., bank statement) showing the child resided at the address. Usually, we secure affidavits from people familiar with care stating what care was provided.
  • If there was a transfer to a disabled child, then SSDI/SSI letter, DL, and birth certificate. For children with new last names, you will need to connect parentage with marriage certificates and/or divorce decrees.
  • If there was a transfer to a special needs trust, get an approval letter from the Trust Unit, the DL of the beneficiary showing under 65 years old, and an SSDI /SSI letter.

If there was a penalized transfer, calculate the penalty period and determine how the nursing home bill will be paid during the penalty period.

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