5723 Transfer Determination - If a non-exempt transfer has been established, the circumstances surrounding the transfer must be evaluated to determine if a penalizable transfer has occurred and the resulting action.

 

5723.1 Misappropriation - No penalty shall be applied when the individual claims he or she was deprived of an asset by fraud, misrepresentation or criminal activity. For all cases of misappropriation, the individual is required to fully pursue recovery of any potential resources as required in KEESM 2124. If recovery is determined to be unlikely or not cost-effective, recovery efforts may be waived as described in this section.

 

  1. Protocol for Determining Misappropriation - For all claims of misappropriation the following protocol is followed to determine the initial outcome of the claim.
     

    1. APS Referral - For all claims, a formal referral to the Adult Protective Services Unit shall be made for further investigation. The report to APS shall include the facts related to the conveyance as well as other personal circumstances of the individual at the time, including any information regarding the individual's competency. For initial claims of misappropriation, no action to establish a disqualification period shall be taken until the outcome of the APS investigation is available.
       

    2. APS Finding -The results of the APS investigation shall be used to determine appropriate action (see PPS Policy and Procedure Manual 10300):
       

      1. Substantiated - If APS determines that abuse, neglect or exploitation (ANE) has occurred with respect to the claim of misappropriation, no disqualification period is established. However, the individual must pursue recovery of the assets per 2124.1. In these cases, proceed to item (E) below. If the applicant or recipient does not wish to pursue recovery, he or she may elect to serve a disqualification period and an appropriate notice shall be sent.
         

      2. Unsubstantiated - Suspected Abuse Neglect or Exploitation -In cases where the APS worker suspects ANE has occurred, and is unable to confirm, a referral will be made to the Attorney General's office for further follow-up. The individual must agree to pursue recovery of the assets per 2124.1. In these cases, proceed to item (E) below.
         

  2. Effect on Medical Assistance -Following the finding by APS, action may be taken on the medical assistance case. For any finding of misappropriation, the individual must agree to pursue recovery. Failure to do so results in denial of medical assistance per KEESM 2124.
     
    The individual is required to report the progress of recovery activities. Minimally, reports of activity are to be made every 6 months, but may occur more frequently as determined necessary based on the circumstances of the case. Appropriate recovery activities must be approved by KDHE Policy.
     

    1. For Applicants -No action is taken to approve or deny LTC coverage until APS issues a finding. If APS confirms abuse, neglect or exploitation or refers to the Attorney General, no transfer of property penalty is considered.

      For cases where APS finds no abuse, but the individual alleges misappropriation, consideration shall be given to the claim based on other information available, such as information from sources defined in item (C) below. These are evaluated on a case by case basis, with approval from KDHE-DHCF Policy . If no finding of misappropriation is made, a penalty shall be established. The individual may wish to file a hardship claim.
       

    2. For Recipients -If LTC payments are authorized, such payments shall be suspended pending a finding by APS. If APS confirms abuse, neglect or exploitation or refers to the Attorney General, no transfer of asset penalty is considered. For cases where APS finds no abuse, but the individual alleges misappropriation, consideration shall be given to the claim based on other information available, such as information from sources defined in item (C) below.

      These are evaluated on a case by case basis, with approval from KDHE-DHCF Policy. If no finding of misappropriation is made, a penalty shall be established. The individual may wish to file a hardship claim.
       

  3. Unconfirmed - If APS indicates no ANE has occurred, other sufficient evidence must be provided by the applicant/recipient or spouse to support the claim of misappropriation. Examples of sufficient evidence are official police reports, documentation of civil or criminal action against the alleged perpetrator or other similar documentation. The individual must agree to pursue recovery of the assets per 2124.1. In these cases, proceed to item (5) below.

    If no additional evidence exists, the claim of misappropriation is denied and the transfer shall be evaluated for a potential disqualification penalty.
     

  4. Referral and Cooperation with the Attorney General’s Office -If ANE is confirmed or suspected, APS will send a referral to the Attorney General's Office for further investigation and possible litigation. The individual must cooperate with the Attorney General's office during the course of the investigation, including any criminal actions that are determined appropriate. If the Attorney General's office does not wish to pursue the case, other actions for recovery as described in item (e) must be considered for the claim of misappropriation to continue to warrant consideration.
     

  5. Other Recovery Methods -To support the claim of misappropriation, the individual is expected to pursue all appropriate recovery methods. Minimally, the options listed below must be considered. All actions taken must be documented. If there is reasonable belief that recovery is likely through any of these avenues, assistance continues if the individual is otherwise eligible. The individual must provide documentation that recovery is being pursued. The cost effectiveness of pursuing the recovery method is also considered (e.g., court costs, legal fees) by the agency with regards to recovery actions.
     

    1. Law Enforcement - Allegations or other evidence of the events are to be documented in an official police report and provided to the agency. A decision by a city, county, district, federal or other attorney of appropriate jurisdiction to decline prosecution is considered. This requirement may be waived if no criminal action appears to have been taken based on the opinion of KDHE-DHCF Policy.
       

    2. Civil Recoveries - If recovery isn't available through a criminal action, a civil action must be considered. Copies of any pending court actions must be provided. This requirement may be waived if civil recovery does not present a reasonable option for recovery based on the opinion of KDHE-DHCF Policy.
       

    3. Private Agreements - If the recipient of the transfer has agreed to repay the funds in order to avoid legal action, but is unable to do so in a lump sum, a written repayment agreement may be established. The agreement must be presented to the agency for consideration and final approval. Repayment arrangements must be clearly stated in a written agreement. The repayment terms and conditions must be included and the agreement must be notarized.
       

    4. Private Legal Consultation - If the individual does not wish to pursue the above options, or recovery actions are not reasonable in light of the circumstances of the case, the opinion of a private attorney shall be obtained. Kansas Legal Services staff may be available to provide this service for those with insufficient resources. A report of potential action provided by the attorney shall be presented to the agency.
       

    5. Recovery Waived - For situations where recovery has not been achieved and all avenues of recovery have been fully exhausted the agency can waive recovery and give the individual permission to abandon recovery activities. No penalty period is assessed in these situations. However, if the situation changes or new information becomes available, the agency may ask the client to again pursue recovery efforts.

 

5723.2 Intent to Receive Fair Market Value or Other Valuable Consideration - No penalty will be applied where the individual believed a fair market value was received, but actually transferred the property for a lesser value. It is not expected that all persons will avoid an error in judgment and a determination of intent must be made. In determining intent, the agency should first verify the fair market value of the property transferred as well as the particular circumstances surrounding the transfer:

 

  1. The length of time the property was on the market;
     

  2. The efforts the individual made to sell the property;
     

  3. Methods of advertising and marketing the property;
     

  4. Other offers received for the property and specific reasons regarding the individual’s decision to accept or reject the offer;
     

  5. The fair market value of the property at the time of the transfer, as believed by the owner compared to the actual value of the property;
     

  6. The recipient of the transferred property;
     

  7. Other considerations the individual may have received in exchange for the property that were pertinent to the decision. Consideration is given to the receipt of other assets, objects, services or other benefit which has a tangible or intrinsic value to the individual.

 

5723.3 Transfer of Property for Purposes other than to Qualify for Medicaid - A penalty period is not considered if a satisfactory showing is made that the transfer occurred exclusively for a purpose other than to qualify for medical assistance.

 

Any transfer of property for less than fair market value within the appropriate look-back period is presumed to have been made for the purpose of establishing or maintaining Medicaid eligibility. The burden of proof is on the individual to disprove the presumption the transfer was made exclusively for another purpose. Clear and convincing evidence must be provided to establish the claim. The individual must provide a chronological record of the facts related to each transfer within the appropriate look-back period which includes the following information:

 

Clear and Convincing Evidence -The agency shall evaluate the information provided to determine if clear and convincing evidence exists to substantiate the purpose of the transfer. The following factors are considered:
 

  1. The transfer was ordered by a court and neither the individual nor spouse nor anyone acting in their legal authority or direction took any action to petition the court to order the transfer.
     

  2. Unexpected events that have altered the circumstances present at the time of transfer which occurred between the transfer and the application, including:
     

    1. a traumatic onset of disability or blindness;
       
    2. the diagnosis of a previously undetected disabling condition; or
       
    3. an unanticipated loss of other income or resources completely outside of the control of the individual or spouse which would have otherwise precluded medical eligibility;
    4.  

     

  3. Transfers to family members, friends and acquaintances are presumed to be for the purpose of becoming eligible unless evidence is presented that the transfer occurred exclusively for one of the following reasons::

       

             i. the property transfer was necessary in relation to a change in location or maintenance of a satisfactory standard of living;

      

             ii. the property transfer was related to payment of a legitimate debt created by a contract entered into prior to the delivery of services or materials and   services or goods were provided at fair market value;

      

             iii .the salvaging of an investment before foreclosure or failure of a business or a business investment to assist the person to be partially or wholly self-supporting;

      

  4. Gifts and other charitable contributions are presumed to be given for the purpose of becoming eligible for medical assistance. The following exceptions apply when considering gifts:

       

            i. When the total amount of all gifts given totals less than $50.00 in a given month.

      

            ii. For applicants only, gifts consistent with an established, well-documented, history of charitable contributions occurring over a number of years prior to the transfer. For example, an individual who has regularly


     e. The longer the period between the transfer and the application for assistance, the more weight is given to the individual's claim.
 

      f. Previous contact with the agency by the individual, spouse, responsible person or others concerning eligibility for medical assistance and/or consultation with or    hiring of an attorney for estate planning purposes are strong indicators that the transfer was not exclusively for another reason other than to qualify for medical assistance.