Long Term Care (LTC) Penalty Periods - Partial Months

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  • An LTC penalty period for non-allowable transfers may include partial months;
  • This memo is intended to provide additional information about how to calculate and apply an LTC penalty period under various circumstances.

An LTC penalty period for non-allowable transfers may include partial months (WAG 07-02-20-d). When a nursing home or supportive living facility customer has a partial day within a partial month of eligibility due to a penalty period, enter the effective date (first full or partial day after the penalty period ends) in the MMIS LTC subsystem (preferable) or on the HFS 2299, Long Term Care Authorization (optional). When entering available income:

  • First, enter the partial day as both begin date and end date with the adjusted NH or SLF credit (the final amount due for the partial day of the penalty period);
  • Second, enter the first full day of eligibility as the begin date and the last day of that month as the end date; to calculate available income, divide the amount by 30 and multiply that result by the number of days beginning with the first full day of eligibility and ending with the last day of the month;
  • Third, enter the first day of the first full month of eligibility as begin date and 999999 as end date and the total available income for the month.

    Example 1: Mr. Y applies for LTC assistance 09/01/12. He had a non-allowable transfer of $3,200 six months ago. The LTC private payment rate is $5,310. Mr. Y is ineligible for .61 months ($3,200 ÷ $5,310 = .602; roundup to two decimals). This makes Mr. Y ineligible for 18.3 days (30 days x .61). The first day of eligibility is 09/19/12. Mr. Y has $53 remaining ($177 daily rate X .3) from the penalty period to apply as the group care credit on 09/19. Enter 09/19/12 and $53 in the MMIS LTC subsystem or on the HFS 2299. 

Continue to apply Mr. Y's income and resources to any remaining days in the month after the penalty period expires. Report the amount of the customer's Nursing Home Credit or SLF Credit and any remaining penalty liability in the MMIS LTC subsystem or on the HFS 2299. Complete the HFS 458LTC, Notice of Decision on Application for Medical Assistance - MANG Long Term Care/Supportive Living Facility, with the first day or partial day of eligibility.

  • Example 1, continued: Mr. Y receives $900 monthly from Social Security and has $300 in resource spenddown. He is eligible for 11 full days in September (09/20/12 through 09/30/12) with a private pay rate of $1,947 ($177 daily rate X 11 days). Using the two-step budgeting process (PM 15-04-04), the worker determines that Mr. Y is eligible. Mr. Y has $1,170 in Nursing Home Credit for his care for September ($900 SSA + $300 resources - $30 personal allowance = $1,170). The worker enters $1,170 in the MMIS LTC subsystem or on HFS 2299 for 09/20/ though 09/30/12. The FCRC sends the HFS 458LTC to Mr. Y and the facility to notify them that his eligibility begins 09/19/12 with a $1,170 NH credit ($53 for partial day 09/19/12 and $1,117 for 09/20/12 through 09/30/12).
  • For October, Mr. Y will have $870 Nursing Home Credit ($900 SSA - $30 personal allowance).
  • Example 2: Mr. M transferred resources worth $16,650 for less than FMV in August 2012. He entered an LTC facility with a private payment rate of $5,050 per month, applied for medical assistance, and was determined eligible beginning 09/15/12. Mr. M has a 99-day (3 months plus 9 days) penalty based on the non-allowable transfer ($16,650 ÷ $5,050 = 3.297, rounded to 3.3; 30 days X 3.3 = 99 days). His penalty runs 09/15-10/14 (month 1), 10/15-11/14 (month 2) and 11/15-12/14 (month 3). He also has a 5-day penalty (12/15-12/19), so the FCRC enters 12/20 as the admission date.

For Department on Aging Community Care (HCBS waiver) cases, add the amount of the unused penalty to the customer's income for the month to reflect the partial month of ineligibility.

  • Example: Mrs. S receives $1,200 SSA benefits, has $500 in countable resources and a non-allowable transfer of $6,800 that occurred three months ago. She applied for medical benefits in 09/12. Using the Community Care rate of $5,430 ($181 per day), the worker determines that Mrs. S is ineligible for 1.26 months ($6,800 ÷ $5,430 = 1.252). Mrs. S is ineligible for September and part of October. After using the $5,430 for September, Mrs. S has $1,370 plus her regular income to pay for her care for October. Mrs. S has a spenddown of $1,614 for October ($1,200 SSA + $1,370 penalty balance -$25 income disregard - $931 AABD medical standard). The FCRC enters $1,614 as her income spenddown for October and $244 for November because the penalty will no longer apply ($1,200 SSA -$25 income disregard - $931 AABD medical standard). The FCRC sends a decision form (360 series) to Mrs. S informing her that she is eligible beginning in October with a $1,614 spenddown. The FCRC has the IL444-360L centrally sent to notify the Community Care provider that the case has been approved, effective October.

[signed copy on file]

Michelle R.B. Saddler

Secretary, Illinois Department of Human Services

Julie Hamos

Director, Illinois Department of Healthcare and Family Services