Friday, March 02, 2007

Uncompensated Transfer of Assets penalty just got better

Effective March 1, 2007, the figure used in West Virginia to calculate the penalty period for uncompensated transfers of assets in the long-term care Medicaid program changed. The WV Bureau for Medical Services (our state's Medicaid agency) divides this figure (which is the private pay nursing home rate) by the the fair market value of the transfer to determine how many months of penalty the Medicaid beneficiary will suffer. For about 8 years the figure they used was $3,380, which especially recently has been seriously below the true average private pay rate in the state. The new figure is $5,087 or $112.65 per day.

The per day fraction is important to know because once WV implements the changes in federal long-term care Medicaid law that were promulgated in the Deficit Reduction Act of 2005 (DRA), penalties will include fractions of the month. Before DRA the penalty period was rounded down to whole months only. Post-DRA implementation the period will also include fractions of a month, eliminating the benefit of transferring just under the value of the monthly private pay rate, which would formerly have resulted in rounding down to 0 months.


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