Probate & Trust Law Section Conference Manual ... - Minnesota CLE

This was commonly known as the "transfer/apply/deny" strategy by which all
excess assets were transferred to another family member in one lump sum, the
individual then applied for medical assistance benefits, and the penalty period
would then start to run. Once the penalty period started to run, the penalty period
was shortened by one month for each month after the start of the penalty period,
and the penalty period was further reduced by returning part of the transferred
assets each month as the original transferor needed funds to pay medical expenses
not covered by medical assistance. This strategy allowed the family members to
keep substantial portions of transferred assets.
To stop this practice, or at least hinder it, the 2009 amendment proposed to allow a
penalty period to be reduced or eliminated only if all transferred assets are
returned within 12 months of the start date of the penalty period. The amendment
prohibited adjustment of a penalty period unless the full value of the transferred
assets was returned.
This change was supposed to be effective for periods of ineligibility established on
or after January 1, 2011, but was blocked until implementation of the State Plan
Amendment discussed below.
Previous policy remains in effect, allowing the transfer/apply/deny strategy,
for penalty periods imposed prior to December 1, 2011. Previous policy can
be found by following the “Archive” link in HCPM § 19.40.35.
B. THE STATE PLAN AMENDMENT
Here, in pertinent part, is the State Plan Amendment approved by the Chicago
Regional Office of CMS in September of 2011. The new language is shown by
underlining:
State: Minnesota
Supplement 9 to Attachment 2.6-A
TN-11-03 Page 3
Effective: 01/01/11
Approved: SEP 23 2011
Supersedes: 06-11, 03-22 and 96-17
10. Eliminating a Penalty Period Established on or after January 1,
2011: A penalty period cannot be shortened by a partial return of assets
used in the calculation of the penalty period. A penalty period can be
eliminated only if the transferors have all assets that were included in the
calculation of the penalty period returned to them. An asset will not be
considered returned unless the value of the asset at the time of return is not
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