• Defining and determining the look-back date and the look-back period;
• Using the look-back date;
• Removing the 30-month maximum on the length of the period of ineligibility;
• Requiring multiple periods of ineligibility to be served consecutively, rather than concurrently;
• Proportioning periods of ineligibility when both spouses are institutionalized.

The manner in which you determine whether a transfer is without fair and valuable consideration has not changed.

Throughout this memorandum, all references to vendor benefits or institutionalization apply both to nursing facility and to HCB services.

OBRA '93 took effect on August 11, 1993.  All references in this memorandum to "pre-OBRA" mean events before that date.  All references to "post-OBRA" mean events that occurred on or after that date.

Defining and determining the look-back date and the look-back period:

The "look-back date" is the earliest date a transfer could have been made and still be considered in determining eligibility.  The "look-back period" is the entire period between the look-back date and the application.

Prior to OBRA '93, the look-back date was 30 months prior to application for vendor or HCB services.  Prior to OBRA '93, the look-back period was the 30 months between the look-back date and the application.

Example:

Opal Johnson, a resident of a nursing facility, applied for vendor benefits July 14, 1993.  Her look-back date at the time of application was January 14, 1991.  The look-back period ran from January 14, 1991, to July 14, 1993.

Example:

Alvin Toffman, a resident of a nursing facility, applied for vendor benefits September 28, 1992.  His look-back date for that application was March 28, 1990.  In January, 1993, he inherited money from a sister and was ineligible.  He re-applied for vendor benefits April 7, 1993.  His new look-back date was November 7, 1990.

Example:

Charles Allen, a resident of a nursing facility, applied for vendor benefits June 10, 1994.  For pre-OBRA transfers, his pre-OBRA look-back date is December 10, 1991 (30 months prior to application).  For post-OBRA transfers, his post-OBRA look-back date is August 11, 1993 (the earliest possible date).

Example:

Emily Washington was a resident of a nursing facility and was receiving vendor benefits on August 11, 1993.  If she should ever become ineligible and then later re-apply (no matter how far in the future), her post-OBRA look-back date will be August 11, 1993, because that is the first date on or after August 11, 1993, on which she was both institutionalized and receiving vendor benefits and the post-OBRA look-back date can be no earlier than August 11, 1993.  Regardless of when she would make any re-application, any transfer made after her post-OBRA look-back date must be evaluated for its effect on her eligibility.

Using the look-back date:

For any application taken on or after August 11, 1993, first determine whether the transfer was accomplished through the mechanism of a trust or similar legal device.  The look-back date depends on the mechanism of the transfer:

Transfers accomplished through trusts or annuities:  If an applicant reports being the creator (also called "grantor" or "settlor") or beneficiary of a trust, the look-back date may be 60 months prior to application.  Submit all trusts to IM Program and Policy via IM-14 for determination.  The response will include a decision on the availability of the trust's assets to the applicant and, where appropriate, a decision on which transfer policy applies.  Until further notice, submit all annuities to IM Program and Policy via IM-14 for determination.

Transfers not accomplished through trusts or annuities:  For transfers occurring on or after August 11, 1993, the post-OBRA look-back date is 36 months prior to the date the claimant first was institutionalized AND applied for or received vendor or HCB benefits, but no earlier than August 11, 1993.  For transfers occurring before August 11, 1993, the pre-OBRA look-back date is 30 months prior to the current application for vendor benefits.  Therefore, if a claimant reports a transfer within the look-back period, consider the following:

• If it occurred before August 11, 1993, and more than 30 months prior to application, do not require verification.  Such transfers would have occurred before the pre-OBRA look-back date and cannot possibly affect current eligibility.  These transfers can be ignored for purposes of the current application.

• If it occurred before August 11, 1993, and within 30 months prior to application, the transfer would have occurred after the pre-OBRA look-back date and must be treated according to the pre-OBRA policy as currently stated in Chapter XI, Section IX, part II.

• If it occurred on or after August 11, 1993, determine the first date on or after August 11, 1993, on which the claimant was both institutionalized and was applying for or receiving vendor or HCB benefits.  36 months prior to that date, but no earlier than August 11, 1993, is the look-back date.  Because this date can never change, it should be recorded on the IM-34 and retained permanently in the case record.  If the transfer occurred after the look-back date, use the policy as stated later in this memorandum to determine the length and start date of the penalty period.  The legal citation for notices remains 208.010 RSMo.

Example:

Violet Berger transfers $70,000 in December 1993.  She enters a nursing facility and applies for vendor benefits January 14, 1997.  She has never applied for vendor benefits before.  Her post-OBRA look-back date is January 14, 1994.  The transfer will not affect eligibility.

Example:

Rose Simpson was in a nursing facility and receiving vendor benefits on August 11, 1993.  Therefore, her look-back date is August 11, 1993.  In January 1994, she inherited $90,000 and became ineligible.  She gave the $90,000 to her daughter in January 1994.

Mrs. Simpson reapplies for vendor benefits in February 1997.  Even though the transfer occurred more than 36 months prior to the 1997 application, she is still ineligible because the look-back period begins in 1993. Since the transfer occurred in the look-back period, we must calculate the length of the penalty period, which is 52 months (see discussion below on "Removing the 30-month maximum on the length of the period of ineligibility).  The January 1994 transfer will cause her to remain ineligible through the end of May 1998.

Example:

Walter Anderson applies for vendor assistance February 9, 1994.  His pre-OBRA look-back date is August 9, 1991 (30 months prior to application).  His post-OBRA look-back date is August 11, 1993 (earliest possible post-OBRA look-back date).  In investigating his application, you find that from the sale of his farm he gave $80,000 to a grand-daughter, Sarah, in April 1991.  He have $80,000 to a grandson, Mark, in March 1992.  A second grandson, Ryan, received $80,000 in May 1993.  A second grand-daughter, Beth, received $80,000 in January 1994.

Treat the transfers to the grandsons according to the policy for transfers as correctly stated in Chapter XI, Section IX, part II.  Treat the transfer to Beth according to the policy which follows in this memorandum.  Ignore the transfer to Sarah, since it occurred before the pre-OBRA look-back date and cannot affect eligibility on this application.

The types of transfers which are penalized have not changed.  Regardless of the date of the transfer, use the same policy for pre-OBRA and for post-OBRA transfers when determining whether to consider a property transfer as one that should be considered for a penalty period.

Any transfer which falls within a look-back period and which occurred on or after August 11, 1993, must be treated according to the following statements:

• Determine the total uncompensated value of the transfer.
• Divide that amount by the average private pay rate for nursing care.  That rate is currently $1725.00 per month.
• The resulting figure, rounded to the nearest whole number, represents the number of months of ineligibility for vendor or HCB services.  There is no limit to the number of months.

Example:

Mr. Anderson's transfers (described in the example above) must be treated differently.  The transfers to Mark and Ryan occurred before August 11, 1993, and within 30 months of the application.  They should be treated according to the policy in Chapter XI, Section IX, pages 12-22.  Divide $80,000 by $1725.00 to arrive at a figure of 46.38, which is then rounded to 46.00.  However, the maximum period of ineligibility for a transfer occurring at that time is 30 months.  The transfer to Beth results in the same calculation.  Because the transfer to her occurred on or after August 11, 1993, the period of ineligibility for that transfer is 46 months.

• If there is only one transfer involved in the determination, start the penalty period with the month in which the transfer occurred.  The claimant will not be eligible for vendor or HCB benefits during the penalty period.  As with pre-OBRA transfers, a post-OBRA transfer will not affect a claimant's eligibility for non-vendor benefits.

 
Exception:  If the transfer occurred on or after August 11, 1993, but before October 1, 1993, the penalty period begins in the month of the transfer.  However, there is no effect on the claimant's eligibility for vendor benefits from the month of the transfer through September 30, 1993.  The claimant will be ineligible for vendor or HCB benefits for the portion of the penalty period in October, 1993, and later.
 
• If there is more than one transfer involved in the determination, see below for handling multiple periods of ineligibility.

Periods of ineligibility resulting from transfers which occurred on or after August 11, 1993, may not overlap any other period of ineligibility due to transfers.  Determine the length of each period independently.  If all the transfers occurred on or after August 11, 1993, the period of ineligibility for the first transfer begins in the month that transfer occurred.  The period of ineligibility for the next transfer begins in the month following the month in which the first penalty period ended, or the month of the next transfer, whichever is later.

Policy has not changed for multiple transfers which occurred before August 11, 1993.  Determine the length of each period independently.  The period of ineligibility for each transfer begins in the month of the transfer.  Therefore, the periods may overlap.

In some situations of multiple transfers, some transfers will have occurred before August 11, 1993, and some on or after August 11, 1993.  Assess penalty periods for the transfers occurring before August 11, 1993, allowing overlapping periods.  Determine the lengths of periods for those transfers occurring on or after August 11, 1993.  Begin the period of ineligibility for the first post-OBRA transfer in the first month in which no pre-OBRA transfer penalty remains or the month of transfer, whichever is later.

Example:

Re-examine Mr. Anderson's situation.  The transfer of $80,000 to Mark occurred in March 1992.  The transfer to Ryan, also $80,000, occurred in May 1993.  The transfer of $80,000 to Beth occurred in January 1994.  The period of ineligibility for the transfer to Mark is the pre-OBRA maximum of 30 months.  Ineligibility begins March 1992, and runs through August 1994.  The period of ineligibility for the transfer to Ryan is also the pre-OBRA maximum of 30 months.  Because the second transfer occurred before August 11, 1993, the period of ineligibility begins in the month of transfer and runs concurrently with the first period of ineligibility.  Thus, the second period of ineligibility begins May 1993, and runs through October 1995.  The period of ineligibility for the transfer to Beth is 46 months (because there is no limit on the penalty period for post-OBRA transfers).

Because the third transfer occurred on or after August 11, 1993, the period of ineligibility may not begin until all other penalty periods have expired.  Because Mr. Anderson has already incurred periods of ineligibility extending through October 1995, the period for the third transfer begins November 1995, and runs through September 1999.  See the next page for a time-line illustrating how the penalty periods would look.

The notice to Mr. Anderson should tell him that due to his transfers to his grandchildren, he is ineligible for vendor coverage from march 1992 through September 1999.  The legal reference should be 208.010 RSMo.

Whenever a penalty period is assessed to either member of a couple, the period applies to whichever one of the couple becomes institutionalized.  If only one member of the couple is institutionalized, the period is calculated and applied in the same manner as thought he institutionalized person were single.  However, if at any time during the penalty period both members of the couple should become institutionalized, the remaining penalty period must be proportioned between them.  Divide the remaining penalty period by two.  If the remaining penalty period before dividing is an even number of months in their respective penalty periods.  If the remaining penalty period before dividing is an odd number of months, arbitrarily assign the extra month to one or the other spouses.

If a penalty period applies while both spouses are institutionalized but one spouse then leaves the facility or dies, the remaining penalty period must be applied in its entirety to the remaining institutionalized spouse.

If neither spouse is institutionalized, the penalty period runs in the same manner as though applied to a single institutionalized person.

Example:

Emile and Carlotta Guitterez are married.  Carlotta transfers property to her niece in June 1994, incurring a penalty period of 38 months, ending in July 1997.  Emile becomes institutionalized in October 1994.  Because of Carlotta's transfer, Emile is ineligible for vendor benefits.  The notice to Emile should include the months for which he is ineligible, a statement that any transfers made by either spouse on or after August 11, 1993, may affect applications by either spouse, and that this or other penalty periods may change if Carlotta should require nursing care or HCB services.  The legal citation remains 208.010 RSMo.

In November 1995, in the 18th month of the penalty period, Carlotta also becomes institutionalized and applies for benefits.  20 months of the penalty period remain.  It is divided equally between them.  Emile and Carlotta each remain ineligible for vendor benefits for 10 more months, through September 1996.  The notice to Carlotta should include the months for which both she and Emile are ineligible, citing 208.010 RSMo.

Example:

Sam and Irma Goldberg gave away property in April 1994, enough to incur a period of ineligibility of 42 months.  In June, they both enter a nursing facility.  Two months of the penalty period had passed prior to their entry into the nursing facility, leaving 40 months (since neither was institutionalized for those two months).  Each is ineligible for vendor benefits for 20 months.

Eight months later, Sam dies.  Between the two spouses 16 more months of the penalty period have been used.  Irma remains ineligible for 24 more months.

OBRA '93 also greatly expanded the language on trusts.  The term "Medicaid Qualifying Trust" does not apply to any trust created on or after August 11, 1993.  Because of the complexity of the new law, it becomes even more important that all trusts, regardless of the date of creation, be submitted to IM Program and Policy on IM-14's, even when it appears no transfer has been made.  Do not submit trusts directly to Legal Services for opinion.

• Review this memorandum with all appropriate staff.
• Effective upon receipt of this memorandum, begin applying the above transfer policy to all new and pending applications.
• Submit all trusts and annuities to IM Program and Policy via IM-14's.