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Medicaid Redeterminations Have Resumed
The National Academy of Elder Law Attorneys (NAELA) designates each May as National Elder Law Month, and suggests that its members inform their clients of significant developments in Elder Law. Unquestionably, the biggest update in recent months has been the end of the Public Health Emergency (PHE) which began in 2020 as a result of the COVID-19 pandemic. The PHE officially ended on May 11, 2023. This has significant consequences for individuals who have been receiving Medicaid benefits during the PHE. While most of our clients do not need to worry about this personally, we know that many clients have family members or friends who do receive Medicaid benefits, and we hope that this information can be helpful to them.
Prior to the PHE, individuals receiving Medicaid went through a “redetermination” process each year to determine whether they were still financially eligible for Medicaid. Additionally, for those receiving Medicaid to pay for long-term care expenses, the annual redetermination also served to reevaluate their “patient pay responsibility” toward the cost of their care, to reflect any changes in monthly income (e.g., annual cost of living increases in Social Security income). Throughout the duration of the PHE, these annual redeterminations were put on hold as a result of a federal law. However, now that the PHE has ended, the redeterminations have resumed. This is known as the “unwinding process.”
This unwinding process is an unprecedented time for the Department of Medical Assistance Services (DMAS), which oversees Virginia’s Medicaid program, as resuming these redeterminations after 3+ years without conducting them has resulted in a massive backlog of work. As a result, they are conducting the redeterminations differently than the way that they have previously been handled. Beginning in March 2023, DMAS began sending notices to individuals who have been Medicaid recipients over the past three years. DMAS has one year from this time to conduct the redeterminations for all Medicaid recipients, and there is currently no way of knowing when in that twelve-month period a particular recipient will receive his or her letter. Even individuals who were once receiving Medicaid but have died during the PHE will receive a letter, and it will be up to the family to alert DMAS of their loved one’s passing.
Once the Medicaid recipient receives the renewal notice, he has thirty (30) days to complete the renewal notice and return it to the local Department of Social Services. Failure to return it within this timeframe could result in the termination of his Medicaid coverage.
In general, a non-married Medicaid recipient can only have $2,000 in non-exempt resources to be financially eligible for Medicaid. However, DMAS is aware that Medicaid recipients may have accumulated resources in excess of this $2,000 limitation over the past three years, especially as a result of (1) the economic stimulus payments from the federal government in 2020 and 2021, and (2) patient pay responsibilities not being increased throughout the pandemic, despite cost of living increases to Social Security income. The caseworkers processing the redetermination will only look at current balances of the Medicaid recipient’s bank account, so a Medicaid recipient should not retroactively be penalized if the balance in his or her account exceeded $2,000 at some point during the PHE.
Additionally, the caseworkers have been instructed to treat excess resources in an account which have accumulated as a result of the reasons stated above as an exempt resource for twelve (12) months from the date of the redetermination. The Medicaid recipient would simply need to spend through the excess within that twelve-month period so the account balance is lower than $2,000 by the time the regular 2024 redetermination occurs. Spending through these resources needs to happen in a way which does not penalize the individual from receiving Medicaid (e.g., no gifts or transfers for less than fair market value).
It is unclear how exactly the caseworker would be able to tell whether the excess resources are due to the permissible reasons listed above, or due to a reason which would disqualify an individual from receiving Medicaid benefits (e.g., selling an interest in real property).
DMAS has also provided assurance that it does not intend to seek recoupment of any miscalculations which occurred during the PHE. In other words, if a Medicaid recipient’s patient pay responsibility was miscalculated, he should not be asked retroactively to pay a higher patient pay responsibility for care which he has already received.
DMAS is very open about the fact that this unwinding process is unchartered territory, and that many of their caseworkers – particularly those hired over the past three years – have never needed to do a Medicaid redetermination. Theoretically, the caseworkers are being provided with training regarding how to handle this process. However, everyone involved seems to anticipate that regardless of the amount of planning which has gone into this unwinding, there will be bumps along the way.
Medicaid is a combination of federal and state law, and this information pertains only to the way that Virginia, specifically, is handling the unwinding process. If our office can be of any assistance to you or a loved one throughout this unwinding process, please let us know. Payment of fees for services, including attorney fees, has always been an allowable use of a Medicaid recipient’s resources, and should continue to be allowable throughout this unwinding process.
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