Medicaid applications for community based long-term care will be subject to a 30-month lookback period, which will be phased in. The implementation of the changes to the law was originally to begin on October 1, 2020, has been pushed back once again, and is now scheduled to begin April 1, 2022. The April 1, 2022 implementation date is due to the extension of the public health emergency. As such, for those who have a long-term care need, and those considering Medicaid planning and applications, it is critical to submit applications prior to April 1, 2022 if at all possible.

Medicaid will perform a financial review only looking back to gifts made on or after October 1, 2020. In other words, applications submitted on April 1, 2022 will have to include 18 months of documentation. The lookback will be fully phased in with Medicaid applications submitted on or after April 1, 2023, and will require 30 months of documentation at that point.

In addition, Medicaid will impose a penalty period for uncompensated transfers of assets (gifts) to “non-exempt” individuals. On the other hand, gifts to exempt individuals, such as a spouse or disabled child, will not incur a penalty. Applications will have to provide all financial documentation, including bank and brokerage statements, for the lookback period. The Medicaid agency will impose a penalty that is equal to one month for every $13,037 gifted for NYC applicants or one month for every $13,834 gifted for Long Island applicants. The start date of the penalty period is the first day the individual is receiving the services for which he is applying.

The lookback applies to home health services, consumer directed personal assistance program (CDPAP), personal care services and Medicaid funded assisted living program services (ALP). If an individual owns a home, it is exempt as long as the value is within the home equity limitation of $906,000.

There are several outstanding concerns with regard to the implementation of the new policy. First, it is likely that there will now be delays in processing Medicaid applications given the increased documentation requirement. The current time frames for approval are 45 days for applications and 90 days if a disability determination is required to determine eligibility (under 65), except for “immediate need applications” which are expedited. However, given that there are delays under the current system with only a minimal documentation requirement, we believe that it is probable that applications will take longer to process, and therefore applicants will likely not get services in place when they need them.

In addition to changes in the financial documentation requirement, there are changes to the functional eligibility criteria for community-based services. Current recipients of home care will not be subject to the new requirements, but will be “grandfathered” under the former rules. Under the new rules, in order to be eligible for home care and CDPAP, applicants must need assistance for physical maneuvering with at least three activities of daily living (ADLs).  If there is a diagnosis of dementia, they must require supervision with at least two ADLs.

Home care and CDPAP services must be prescribed by a qualified independent physician selected or approved by the Department of Health. This change becomes effective November 8, 2021. In addition, a new standardized task-based assessment tool will be created to determine hours. The tool will be used to determine how the individual’s needs can be met with telehealth and family supports. 

Advocates are concerned regarding several aspects of the law and there is certainly the possibility that some of these new requirements may be changed before final implementation. In addition, there is now a valuable opportunity to engage in Medicaid planning. Medicaid planning involves transferring assets to a Medicaid Asset Protection Trust or to an individual(s). By transferring assets to the Medicaid Trust, the asset is out of the Medicaid applicant’s name for the purpose of Medicaid eligibility and Medicaid estate recovery, while maintaining income tax, capital gains tax and other benefits.

Those who are considering applying for long-term community-based benefits, such as a home health attendant, should strongly consider submitting their Medicaid applications as soon as possible, but no later than the end of March, 2022. It is important to consult with an elder care attorney who can advise on the best steps for your particular situation and needs. 

Ronald A. Fatoullah, Esq. is the founder of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Stacey Meshnick, Esq. is a senior attorney of the firm. The law firm can be reached at 718-261-1700, 516-466-4422, or toll free at 1-877-ELDER-LAW or 1-877-ESTATES.  Mr. Fatoullah is also a partner advisor with Advice Period, a wealth management firm, and he can be reached at 424-256-7273. 

 This is not intended to be individual legal advice which can only be provided if you retain our firm. If you need legal advice please contact our offices to schedule a consultation at 1-877-ELDERLAW (1-877-353-3752).

By Ronald Fatoullah, Esq. and Stacey Meshnick, Esq.