There are many reasons why an application for Medicaid long-term care benefits can be denied. A denial of Medicaid benefits needs to be taken seriously and appealed in a timely manner. Usually, the time frame for filing an appeal is 30 days from the mailing date of the determination notice. If you do not file the application on time and appeal a denial in a timely manner, the eventual authorization of benefits may not be retroactive to the start date you need.
Here are the top three reasons a Medicaid application is denied, and some things you and your lawyer can do about it:
Failure to Provide Verification
You spent down the excess resources and filed the Medicaid application, but the caseworker at the County Assistance Office is missing something in the file. This may be a surprise to you. The nursing home business office may have told you that they 
have everything and that the benefits would be approved retroactively, and not to worry. The missing documentation could be a bank statement, missing tax return, or requested proof that withdrawal from a bank account was not a gift. The caseworker at the County Assistance Office should have told you what he or she needed and given you time to obtain it. However, sometimes the Medicaid applicant is not sure exactly what the casework needs, time runs out and the caseworker issues a denial notice. It is possible that you have already sent the necessary information to the County Assistance Office, but it did not make it through the clerical department in time to reach the caseworker’s desk before the issuance of a denial notice. Your lawyer should help you appeal the denial notice on time, confirm what is missing, and supply the missing documentation to the County Assistance Office. The regulations require the Medicaid applicant to cooperate in the verification process. If you can prove that you have taken all reasonable steps to secure the missing documents, you may be able get the Medicaid benefits authorized even if you are missing the requested documents. This is a situation where a knowledgeable elder law firm can provide valuable guidance.
Excess Resources
The notice you received says that the application is denied due to “excess resources.” This usually means the applicant has too much money based on the information provided to the County Assistance Office. Remember that for a married couple, the County Assistance Office looks to the non-excluded resources of both spouses. Some assets are excluded, but other assets are counted. In any event, if your application is denied due to excess resources, the caseworker thinks you still have too much in the way of resources to qualify for Medicaid long-term care benefits.
You need to confirm the applicable resource limit. Single applicants will have a resource limit for non-exempt assets of either $2,400 or $8,000, depending on the person’s gross income. Married applicants have a resource limit that depends on their total countable assets on the admission date to the nursing home.
If you find that you are still over the limit, an elder law attorney can tell you how best to spend-down the excess resources without causing a problem. For example, spending down on non-medical items can prevent the caseworker from authorizing benefits retroactively. There are some bills that can be paid to secure retroactive coverage, such as medical bills, but you need to be careful when spending down on non-medical expenses.
Sometimes there is a misunderstanding with the caseworker, who may not know that you have already spent excess resources down or may be applying the wrong resource limit to the case. The caseworkers are usually correct about the resource limit applicable to a single applicant but need much more information to accurately determine the resource limits in a case of a married nursing home resident. Communication and follow-up with the caseworker are critical to addressing denial of Medicaid benefits due to excess resources.
Asset Transfers
If you have given away assets within the five years prior to applying for Medicaid long-term care benefits, these transfers can give rise to a period of ineligibility for Medicaid long-term care benefits. Some transactions called out as asset transfers were not gifts but require explanation to the caseworker. For example, sometimes money was withdrawn from one account and deposited to another account. If the caseworker does not have a clear paper trail, they may conclude assets were gifted away and impose a denial of benefits, i.e., a Medicaid transfer penalty.
Some asset transfers and gifts are permissible, and do not result in a transfer penalty. For example, the gift of assets to a disabled child is normally exempt from the Medicaid transfer penalties. Also, if you can prove that gifts were made exclusively for reasons other than to qualify for Medicaid long-term care benefits, they may be excused from the Medicaid transfer penalties.
The best approach is to work with an elder law attorney from the beginning, but if you were working directly with the nursing home business office, handling the application on your own, or working with some non-lawyer contractor the nursing home suggested and your Medicaid application was denied, you should hire an elder law attorney right away.
There are often things that an elder law attorney can do to address a denial of benefits. The first thing the lawyer will likely do is file an appeal to buy some time. You can then discuss options to address the denial of benefits.
—
Disclaimer: We recommend that you receive ongoing legal advice from an elder law attorney before attempting to navigate the Medicaid application process. If you wish to secure our services in connection with an application for Medicaid long-term care benefits, please contact us.
