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How Does a Nursing Home Get Paid During a Medicaid Penalty Period?
I am a little confused. If you have to be in the nursing home and essentially out of money for a Medicaid penalty period to begin, who pays the nursing home during the penalty period? My mom is in need of a nursing home. She was in the habit of giving away money. Suppose Medicaid says she has a penalty period of five months. After she gives all her income and savings to the nursing home, how does the nursing home get paid for those five months?
That’s a good question and it's a huge problem with the law. It often means that nursing homes don’t get paid in full during the penalty period. Either the resident or the facility may appeal the transfer penalty on one of two grounds. The first is that your mother did not make the gifts for purposes of qualifying for Medicaid. At least in theory, only those transfers made to become eligible for Medicaid are supposed to be penalized. But this is an uphill battle because you would have the burden of proving your mother’s intent in making the gifts. Second, either your mother or the nursing home can seek a hardship waiver. Each state has its own, often very specific, process for this. Again, the chances of success are usually slim, but it may be worth a try.