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COA affirms transfer penalty for nursing home resident

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The Indiana Court of Appeals has affirmed a finding by the Family and Social Services Administration that an elderly woman was not entitled to Medicaid nursing home benefits in the eight months after she gave $35,500 to her nephew and his wife.

In the case of Lola Austin v. Indiana Family and Social Services Administration, 64A04-1008-MI-514, Lola Austin appealed the FSSA determination that the payment constituted a transfer. The FSSA’s decision had previously been affirmed by an Administrative Law Judge and a trial court.

Austin moved into the Alzheimer’s Unit of the Whispering Pines Health Care Center in September 2007, during which time her nephew and his wife, James and Julianne Mack, began building an addition onto their home. James claimed that the addition could potentially enable Austin to live in the Mack household. At the end of September, Austin signed a form naming the Macks her attorneys-in-fact.

On November 29, 2007, the Macks, signing both on their own behalf and as Austin’s attorneys-in-fact, executed a “Lifetime Care Agreement” that stated the Macks would provide a variety of services for Austin for the remainder of her life, including grooming, laundry, and personal shopping.

The agreement provided, based on Austin’s actuarial life expectancy and an average cost of $12 per hour for the services and an estimated 15 hours per week to provide them, that the total value of the services to be provided by the Macks was $41,236. However, the Macks agreed to accept only $35,500 from Austin, as that was the full extent of her savings at the time. The Macks immediately used the $35,500 to help pay for the addition to their house.

Austin’s Medicare benefits for residing at Whispering Pines ran through November 2007. On December 12, 2007, James filed an application for Medicaid nursing home benefits with FSSA on behalf of Austin. FSSA denied this application on January 24, 2008, on the basis that Austin’s resources exceeded the Medicaid eligibility limit. On April 18, 2008, James filed another application for Medicaid benefits with FSSA, retroactive to December 2007. James believed the first denial failed to consider that several checks from Austin’s checking account had been outstanding at the time of the first application, and that the cashing of those checks would have lowered her resources below the Medicaid eligibility limit. On May 19, 2008, FSSA generally approved the application. However, FSSA stated that it was imposing a transfer penalty based on the November 2007 payment of $35,500 to the Macks, which resulted in Austin being denied coverage for nursing home benefits from December 2007 through July 2008.

In its affirmation, the COA said that it believed the FSSA and the courts are justified in turning a skeptical eye toward “personal care” contracts and carefully examining whether they truly represent a fair market value exchange for cash or assets of a nursing home resident. The FSSA didn't challenge the agreement itself, but rather argued it did not have a fair market value of $35,500.

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  1. Thank you, John Smith, for pointing out a needed correction. The article has been revised.

  2. The "National institute for Justice" is an agency for the Dept of Justice. That is not the law firm you are talking about in this article. The "institute for justice" is a public interest law firm. http://ij.org/ thanks for interesting article however

  3. I would like to try to find a lawyer as soon possible I've had my money stolen off of my bank card driver pressed charges and I try to get the information they need it and a Social Security board is just give me a hold up a run around for no reason and now it think it might be too late cuz its been over a year I believe and I can't get the right information they need because they keep giving me the runaroundwhat should I do about that

  4. It is wonderful that Indiana DOC is making some truly admirable and positive changes. People with serious mental illness, intellectual disability or developmental disability will benefit from these changes. It will be much better if people can get some help and resources that promote their health and growth than if they suffer alone. If people experience positive growth or healing of their health issues, they may be less likely to do the things that caused them to come to prison in the first place. This will be of benefit for everyone. I am also so happy that Indiana DOC added correctional personnel and mental health staffing. These are tough issues to work with. There should be adequate staffing in prisons so correctional officers and other staff are able to do the kind of work they really want to do-helping people grow and change-rather than just trying to manage chaos. Correctional officers and other staff deserve this. It would be great to see increased mental health services and services for people with intellectual or developmental disabilities in the community so that fewer people will have to receive help and support in prisons. Community services would like be less expensive, inherently less demeaning and just a whole lot better for everyone.

  5. Can I get this form on line,if not where can I obtain one. I am eligible.

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