This week’s post is the last of 3 on the danger of losing Medicaid after having been approved. In both of our cases the Qualified Income Trust was the cause and each time it happened during the annual redetermination process.
As I explained last week the QIT rules are very specific and must be strictly adhered to. Income must pass into and out of the trust bank account each and every month.
In both of our cases, in the last month before redetermination it appeared from a review of the bank statement that this didn’t happen. In one case the income remaining in the account was $3400. Medicaid imposed a penalty of 10 days, with approval of benefits beginning again on the 11th day for another year.
In the other case, the income remaining in the trust bank account was $4800 so the penalty was 14 days. In the first case the penalty could not be avoided but in the second it was. So what was the difference?
In the first instance the trustee told me he just forgot to write a check to the nursing home before the end of the month so he made a “double” payment the next month. He didn’t think it was a big deal but as I explained it was. There was nothing I could do to avoid the penalty.
The second case was different. Examining a copy of the check to the nursing home and the next month’s statement revealed that while the check was written (and the trustee confirmed was mailed) before the end of the month, it did not clear until the next month.
I was able to convince the caseworker that they should treat the income as being distributed correctly because the trustee has no control over when the check is deposited by the facility. This rule is the same as is applied when spending down assets.
And how much did the nursing home bill the family for the 10 days of lost benefits? $4250 at the rate of $425 per day which was their private rate. A costly mistake and just another example of how tricky getting – and keeping – Medicaid can be.