10:71-4.7 Transfer of resources
(a) The provisions of this section shall apply only to persons who are receiving an
institutional level of services, including individuals who are receiving services under a 42
U.S.C. § 1915(c) home and community care waiver under Medicaid, or who are seeking
that level of services and who have transferred resources, except as specified in N.J.A.C.
10:71-4.10. An individual shall be ineligible for institutional level services through the
Medicaid program if he or she (or his or her spouse) has disposed of resources at less than
fair market value at any time during or after the 36 month period immediately before:
1. In the case of an individual who is already eligible for Medicaid benefits, the date the
individual becomes an institutionalized individual; or
2. In the case of an individual not already eligible for Medicaid benefits, the date that the
individual applies for Medicaid as an institutionalized individual.
(b) The following definitions shall apply in situations regarding the transfer of resources:
1. Fair market value: The fair market value (FMV) is equal to the current market value at
the time of resource disposal. The FMV shall be determined in accordance with the
evaluation instructions set forth in N.J.A.C. 10:71- 4.1(d).
2. Uncompensated value: The uncompensated value (UV) is the difference between the
FMV of a nonexcludable resource (less any encumbrances) and the compensation received
by the individual. If the resource was jointly owned before disposal, the UV considered is
only the individual's share of that value (see N.J.A.C. 10:71-4.1(d)).
3. Institutionalized individual: An institutionalized individual for the purposes of this
section is a person who is receiving care in a Medicaid certified skilled nursing facility,
intermediate care facility (level A or B and ICFMR) and licensed special hospital (Class B or
C) or Title XIX psychiatric hospital (if under the age of 21 or age 65 and over). Effective
October 1, 1990, an institutionalized individual shall include an individual receiving care in a
Medicaid certified nursing facility (NF). For the purposes of this section, an institutionalized
individual shall include a person seeking benefits under a home or community care waiver
program, not including the Home Care Expansion Program. An institutionalized individual
shall not include a person who is receiving care in an acute care general hospital.
4. Penalty period: The penalty period is the period of ineligibility for Medicaid coverage for
institutional level care established for an individual as a result of the transfer of a resource
for less than fair market value. The penalty period begins with the month of the resource
transfer and is the lesser of:
i. 30 months; or
ii. The number of months resulting from dividing the uncompensated value of the
transferred resource by statewide monthly average lowest semi-private room rate for
Medicaid certified nursing facilities as calculated annually. The current average through
December 31, 1990 is $3,376.
(c) General procedures: If an individual or his or her spouse described in (a) above
(including any person acting with power of attorney or as a guardian for such individual) has
sold, given away, or otherwise transferred any resources (including any interest in a
resource or future rights to a resource) within the 30 months preceding the date of
application or entry into institutional care, the following steps shall be taken and fully
documented in the case record:
1. Ascertain and document the FMV of the resource.
2. Document the amount of compensation received by the individual for the transfer.
3. Determine the UV, if any.
4. Add the amount of the UV, if any, to the amount of other countable resources.
5. Notify the applicant, in all cases when any amount of UV is established, of the
determination via Form PA-13 before the application is approved or denied.
6. Advise the applicant that he or she may rebut the presumption that a resource was
transferred at less than FMV in order to qualify for Medicaid coverage for institutional care
(see (i) below).
(d) The provisions of this section apply whether or not the resource would have been
considered an excluded resource at the time of its disposal or transfer. However, an
individual shall not be ineligible for an institutional level of care because of the transfer of his
or her equity interest in a home which serves (or served immediately prior to entry into
institutional care) as the individual's principal place of residence and the title to the home
was transferred to:
1. The institutionalized individual's spouse;
2. A child of the institutionalized individual who is under the age of 21 or a child of any age
who is blind or totally and permanently disabled;
i. In the event that the child does not have a determination from the Social Security
Administration of blindness or disability, the blindness or disability shall be evaluated by the
Medical Review Team of the Division of Medical Assistance and Health Services in
accordance with the provisions of N.J.A.C. 10:71-3.13;
3. A brother or sister of the institutionalized individual who already had an equity interest
in the home prior to the transfer and who was residing in the home for a period of at least
one year immediately before the individual becomes an institutionalized individual; or
4. A son or daughter of the institutionalized individual (other than described in (d)2 above)
who was residing in the individual's home for a period of at least two years immediately
before the date the individual becomes an institutionalized individual and who has provided
care to such individual which permitted the individual to reside at home rather than in an
institution or facility.
i. The care provided by the individual's son or daughter must have exceeded normal
personal support activities (for example, routine transportation and shopping). The
individual's physical or mental condition must have been such as to require special attention
and care. The care provided by the son or daughter must have been essential to the health
and safety of the individual and consisted of activities such as, but not limited to, supervision
of medication, monitoring of nutritional status, and insuring the safety of the individual.
(e) The provisions of this section do not apply to the following resource transfer situations:
1. The resources were transferred to the community spouse (or to another individual for
the sole benefit of the community spouse) prior to the entry into institutional care so long as
the resources were not subsequently transferred by the community spouse;
i. If funds were transferred to another individual for the sole benefit of the community
spouse prior to entry into institutional care, in order that the transfer not be considered to
have been for the purposes of qualifying for Medicaid, the funds must have been transferred
in the form of a legally binding trust document specifying that the trustee(s) may use the
funds solely for the benefit of the community spouse. Should the transferred funds not be
so designated, the transfer shall be presumed to be for the purpose of qualifying for
Medicaid in accordance with the provisions of this section;
2. The resources were transferred to the community spouse subsequent to the application
for Medicaid in accordance with N.J.A.C. 10:71-4.8(a)3; or
3. The resources were transferred from the institutionalized individual or the community
spouse to the institutionalized individual's child who is blind or permanently and totally
disabled.
i. In the event that the child does not have a determination from the Social Security
Administration of blindness or disability, the blindness or disability will be evaluated by the
Disability Review Section of the Division of Medical Assistance and Health Services in
accordance with the provisions of N.J.A.C. 10:71-3.13.
(f) Resource transferred at fair market value: When the resource was transferred at FMV,
the application shall be processed as usual. No special procedure is required.
(g) Resource transferred, resource limit not exceeded: When the UV of a transferred
resource, combined with other countable resources does not exceed the applicable
resource limit, the application shall be processed as usual.
(h) Resource transferred, resource limit exceeded: When the UV of a transferred
resource, combined with other countable resources, exceeds the resource limit, eligibility for
institutional level services shall be denied and the procedures below followed:
1. Notify the applicant via Form PA-13 that he or she has transferred a resource at less
than FMV, the amount of the UV and the length of the penalty period. Explain that the law
states that transfer of a resource at less than FMV is presumed to be for the purpose of
establishing Medicaid eligibility for institutional services.
2. Advise the applicant that he or she may rebut the presumption (see (i) below).
3. Prepare a list of such cases for control purposes. The control list shall include the case
number, client's name, Social Security number, date of resource disposal, FMV of the
resource, amount of UV, and the start and end dates of the period of ineligibility for
institutional level services.
(i) Rebuttal of presumption that the resource was transferred to establish eligibility: All
applicants or beneficiaries may rebut the presumption that a resource was transferred to
establish Medicaid eligibility. If the individual wishes to rebut such presumption, explain that
it will be his or her responsibility to present convincing evidence that the resource was
transferred exclusively (that is, solely) for some other purpose. The applicant should be
assisted in obtaining information when necessary. However, the burden of proof rests with
the applicant. Accordingly, when the applicant expresses the desire to rebut the agency's
presumption that he or she transferred a nonexcludable resource to establish Medicaid
eligibility, the procedures below shall be followed.
1. The applicant's statement concerning the circumstances of the transfer shall be
recorded. The statement should include, but need not be limited to, the following:
i. The applicant's stated purpose for transferring the resource;
ii. The applicant's attempt to dispose of the resource at FMV;
iii. The applicant's reasons for accepting less than FMV for the resource;
iv. The applicant's means of, or plans for, supporting himself or herself after the transfer;
v. The applicant's relationship, if any, to the person(s) to whom the resource was
transferred.
2. Request the applicant to submit any pertinent documentary evidence (for example,
legal documents, realtor agreements, relevant correspondence).
3. Take statements from other individuals if material to the decision.
(j) Factors which may indicate that the transfer was for some other purpose: The presence
of one or more of the following factors, while not conclusive, may indicate that resources
were transferred exclusively for some purpose other than establishing Medicaid eligibility.
1. The occurrence after transfer of the resource of:
i. Traumatic onset of disability;
ii. Unexpected loss of other resources which would have precluded Medicaid eligibility;
iii. Unexpected loss of income which would have precluded Medicaid eligibility.
2. Resources that would have been below the resource limit during each of the preceding
30 months if the transferred resource has been retained.
3. Court-ordered transfer.
4. Evidence of good faith effort to transfer the resource at FMV.
(k) Agency determination pursuant to client rebuttal:
1. The presumption that a resource was transferred to establish Medicaid eligibility is
successfully rebutted only if the applicant demonstrates that the resource was transferred
exclusively for some other purpose.
2. If the applicant had some other purpose for transferring the resource, but establishing
Medicaid eligibility seems to have been a factor in his or her decision to transfer, the
presumption is not successfully rebutted.
3. The determination will not include an evaluation of the merits of the applicant's stated
purpose of transferring a resource. The determination will only deal with whether or not the
applicant has proven that the transfer was solely for some purpose other than establishing
Medicaid eligibility.
4. The final determination regarding the purpose of the transfer shall be made at a
supervisory level and documented in the case record.
5. The applicant shall be sent a notice of the decision which shall include his or her right to
a fair hearing.
(l) In the case of any resource transfer which occurred between April 1, 1990 and August
20, 1990 and which would otherwise be subject to the provisions of this section, the period
of ineligibility for institutional services shall be the lesser of:
1. 24 months; or
2. The number of months resulting from the application of the calculation at N.J.A.C.
10:71-4.7(b)4ii.