DEPARTMENT OF HEALTH AND SOCIAL SERVICES

Division of Medicaid and Medical Assistance

Statutory Authority: 31 Delaware Code, Section 512 (31 Del.C. §512)

FINAL

ORDER

DSSM 20350.10 Exceptions to the Transfer of Assets

Nature of the Proceedings:

Delaware Health and Social Services (“Department”) / Division of Medicaid and Medical Assistance (DMMA) initiated proceedings to amend a rule in the Division of Social Services Manual (DSSM) used to determine eligibility for the Medicaid Long Term Care Program. The Department’s proceedings to amend its regulations were initiated pursuant to 29 Delaware Code Section 10114 and its authority as prescribed by 31 Delaware Code Section 512.

The Department published its notice of proposed regulation changes pursuant to 29 Delaware Code Section 10115 in the July 2006 Delaware Register of Regulations, requiring written materials and suggestions from the public concerning the proposed regulations to be produced by July 31, 2006 at which time the Department would receive information, factual evidence and public comment to the said proposed changes to the regulations.

Summary of Proposed Change

Statutory Authority

• Omnibus Budget Reconciliation Act of 1993 (OBRA 93), Subchapter B, Part II, Section 13611, Transfer of Assets; Treatment of Certain Trusts

• 42 U.S.C. 1396p(d) and Section 1917(d) of the Social Security Act, Liens, adjustments and recoveries; transfer of assets

Background

The Omnibus Budget Reconciliation Act of 1993 (OBRA 93) allows nonprofit organizations to establish and manage a pooled trust for the benefit of people who are disabled according to SSI criteria. A pooled trust is a trust, which meets the criteria set forth in Section 1917(d)(4)(c) of the Social Security Act. It contains the assets of disabled persons and is managed by a nonprofit organization that maintains separate accounts for each such individual. The principal and interest of a pooled trust account are not counted in determining Medicaid eligibility, and transfer of assets into such accounts are not penalized, unless they are made after the disabled individuals becomes 65 years of age.

Summary of Proposed Change

The purpose of this regulation is to correct who is responsible for providing proof of disability.

Currently, the rule at DSSM 20350.10.2 directs the reader to DSSM 20102 for a separate disability determination should the individual not be in receipt of SSI or disability benefits. DSSM 20102 states, “The first of two steps in the application process is to determine medical eligibility. This is usually determined by Pre-Admission Screening (PAS). Referrals to PAS may come from the family of the applicant as well as other sources.”

Pre-Admission Screening does not determine disability according the SSI standards. Therefore, DMMA is correcting the rule language regarding the proof of disability requirement to reflect current practices and long-standing procedures. The individual who is claiming disability must submit acceptable medical evidence.

Summary of Comments Received with Agency Response and Explanation of Changes

The State Council for Persons with Disabilities (SCPD) offered the following observations and recommendations summarized below. DMMA has considered each comment and responds as follows:

As background, federal Medicaid law (OBRA ’93) provides an exclusion from general transfer of assets limitations if a qualifying person places assets in a qualifying pooled trust operated by a non-profit organization. In order to qualify, an organization must meet SSI medical disability standards. Unfortunately, the current DMMA regulation contains an incorrect reference to the medical disability standard. Therefore, DMMA is substituting a more accurate standard, i.e., referring to the State agency (DDS) which conducts medical disability assessments for the Social Security Administration. The SCPD has the following recommendation.

Although the reference to “disabled according to the standards used by The Disability Determinations Services” may be accurate, it would be preferable to refer to “…evidence, he meets medical disability standards of the SSI (Title XVI) program.” DDS does not adopt and publish its own standards. It uses the federal standards which are published on the SSA’s Website. Therefore, it would be preferable to substitute the latter provision.

Agency Response: We agree. The final order regulation reflects the latter provision.

Findings of Fact:

The Department finds that the proposed changes as set forth in the July 2006 Register of Regulations should be adopted.

THEREFORE, IT IS ORDERED, that the proposed regulation to amend the Division of Social Services Manual related to proof of disability used in determining eligibility for the Medicaid Long Term Care Program is adopted and shall be final effective September 10, 2006.

Vincent P. Meconi, Secretary, DHSS, 8/14/06

DMMA FINAL ORDER REGULATION #06-37

REVISION:

20350.10 Exceptions to the Transfer of Assets

20350.10.1 Exceptions to Transfer of Residence

20350.10.2 Exceptions to Transfer of an Asset

20350.10.1 Exceptions to Transfer of Residence

The transfer provision does not apply to the HOME and title to the home transferred to:

a. a spouse (as long as spouse does not then transfer property for less than fair market value);

b. a child under 21 years of age;

c. a child who is blind or disabled, as defined by the SSI program;

d. a sibling who has an equity interest in the home and who has resided in the home for at least one year immediately before the date the individual becomes institutionalized; or

e. a son or daughter of the individual (other than a child described above) who was residing in the home for at least 2 years immediately before the date the individual became institutionalized, and who provided care to that individual which permitted the individual to reside at home rather than in an institution.

In items d. and e. above the property cannot be excluded unless and until the assets are actually transferred. Also verification for this would consist of a written statement from the parent indicating that this situation existed. If the parent is not capable, a statement from an adult child or sibling and statements from two other adults indicating that the situation existed would suffice. Statements must specify the number of years spent in the home and the exact nature of the care provided.

20350.10.2 Exceptions to Transfer of an Asset

The transfer provision does not apply to ANY asset transferred:

a. to the individual's spouse, or to another for the sole benefit of the individual's spouse;

b. from the individual's spouse to another for the sole benefit of the individual's spouse (OBRA 93);

c. to the individual's blind or totally and permanently disabled child;

d. to a trust containing the assets of an individual under age 65 who is disabled as defined by the SSI program and which is established for the benefit of the individual by a parent, grandparent, legal guardian of the individual or a court if the trust contains a provision that upon the death of the individual the State will receive all amounts remaining in the trust up to an amount equal to the total medical assistance paid on behalf of the individual (OBRA 93);

e. to a pooled trust containing the assets of an individual who is disabled as defined by the SSI program and that is established and managed by a non-profit association if the trust contains a provision that upon the death of the individual the State will receive all amounts remaining in the trust up to an amount equal to the total medical assistance paid on behalf of the individual (OBRA 93).

A transfer of assets or an establishment of a trust is considered to be for the sole benefit of a spouse, disabled child, or individual under age 65, if the transfer is arranged in such a way that no individual except the spouse, child or individual can benefit from the assets in any way, either at the time of the transfer, or at any time in the future. If a beneficiary is named to receive the asset at the time of the individual's death, the transfer or trust will nevertheless be considered to have been made for the sole benefit of the individual if Medicaid is named as the primary beneficiary of the asset, up to the amount paid for services provided to the individual.

To determine whether an asset was transferred for the sole benefit of a spouse, child, or disabled individual, obtain a legally binding, written document (such as a trust document). The document must clearly define the conditions under which the transfer was made, as well as who can benefit from the transfer. A transfer without such a document cannot be said to have been made for the sole benefit of the spouse, child, or disabled individual, since there is no way to establish, without a document, that only the individual will benefit from the transfer.

Where it is alleged that an asset was transferred to or for the benefit of an individual who is blind or totally and permanently disabled, a determination must be made that the individual in fact meets the definition of blindness or disability used by the SSI program. If the individual is receiving either SSI or Title II benefits, accept the disability determination made for those programs. If the individual is not receiving those benefits, a separate disability determination must be made[.] using the procedures described in Section 20102 - Medical Eligibility Determination. The individual who is claiming the disability must submit acceptable medical evidence he has been determined disabled according to the standards used by [The Disability Determination Services The SSI program (Title XVI)]. The individual will be given a reasonable amount of time to provide the medical evidence.

10 DE Reg. 558 (09/01/06) (Final)