Tuesday, April 17, 2018

CMS Revised Guidance: Penalty Period Start Date for 1915(c) Waiver Participants

Lilly Hummel


The Centers for Medicare and Medicaid Services (CMS) released new guidance this week to correct an unintended consequence of prior guidance for determining the penalty start date of an asset transfer for Medicaid applicants seeking eligibility for home and community-based services (HCBS) delivered under a 1915(c) waiver.

According to the revised guidance, the penalty period start date for these applicants is no later than the point at which the applicant would otherwise be receiving HCBS waiver coverage based on the approved application for such care, but for the penalty. 

Specifically, the penalty period start date would be no later than the date the state confirms that it has: 

(1) Determined that the applicant meets the financial and non-financial requirements for Medicaid eligibility and the level-of-care criteria for the 1915(c) waiver; 
(2) Developed a person-centered service plan; and 
(3) Identified an available waiver slot.

The earlier guidance (SMDL #06-018) created a catch-22 for those applying to receive HCBS services under a 1915(c) waiver and who were subject to an asset transfer penalty period.Under that guidance, the penalty period did not begin to run until the individual began receiving HCBS waiver services, but the individual could not begin to receive waiver services until the penalty period has run. The result was an infinite penalty period. 

CMS stated that the new guidance will ensure CMS is interpreting the provision consistent with statutory intent.

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