Federal law, specifically 42 U.S. Code § 1396p(c)(2)(D), dictates that a state must establish procedures that allow a Medicaid applicant to receive needed care via a hardship waiver. In these cases, the applicant (or their spouse) had made a transfer during the look-back period that would otherwise incur a penalty whereas the applicant would not be eligible to receive Medicaid benefits for a certain period of time. If the applicant can show that the imposition of the penalty period would deprive the applicant of necessary medical care or the necessities of life, then the hardship waiver can be approved, allowing the applicant to get needed care immediately. Basically, the penalty period is waived if the hardship waiver is granted.

Each state has its own nuanced rules for a hardship waiver, using the federal rule as a guide. New York’s rule is housed in 18 NYCRR 360-4.4(c) and states:

“Denial of eligibility will result in an undue hardship if:

(i) the institutionalized person is otherwise eligible for MA;

(ii) the institutionalized person is unable to obtain appropriate medical care without the provision of MA; and

(iii) despite his/her best efforts, the institutionalized person or the person’s spouse is unable to have the transferred resource returned or to receive fair market value for the resource. Best efforts include cooperating, as deemed appropriate by the commissioner of the social services district, in the pursuit of the return of such resource.”

In a recent opinion issued by the Supreme Court of the State of New York, Fourth Appellate Division, the court found that the applicant was not entitled to a hardship waiver. The applicant’s husband had made a transfer for less than fair market value during the lookback period and thus the applicant was assessed a penalty period. The opinion was a short two pages and didn’t go into many details about the facts or reasoning behind the decision, but the court found that two prongs of the test were unmet – the applicant was unable to prove that she couldn’t have the assets returned and she didn’t prove that she was not able to obtain medical care without benefits. Accordingly, her undue hardship application was denied.

What could the applicant have done differently to get her hardship waiver application approved? What evidence would have bolstered her claim? While the case didn’t go into any details, and the state statute doesn’t address the issue, it could be helpful to look at other states and their instructions on hardship waivers. For example, the District of Columbia Department of Health Care Finance states the following:

“The applicant/beneficiary has the burden of proof and must provide written evidence to clearly substantiate: (1) the reason for the transfer; (2) the risk of loss of long term care institutional or home and community based services, and (3) that losing Medicaid long term care services will either. threaten the individual’s life or health or will result in deprivation of food, clothing, shelter or other necessities of life. If the applicant/beneficiary is asserting that the denial of long term care services will threaten his/her life or health, the applicant/beneficiary must submit a signed statement from a physician to that effect.

Written documentation should include any evidence that the applicant/beneficiary believes is probative of the idea that discontinuation of long term care services will result in undue hardship, as defined. Examples of acceptable documentation include:

• A letter from a nursing facility or home health agency documenting that the applicant/beneficiary’s access to services will be discharged imminently.
• A physician’s statement
• Rent statements or payments
• Grocery bills
• Clothing bills”

Most practitioners would agree that obtaining a hardship waiver is an uphill battle; it is difficult to be successful in such a claim. However, an elder law attorney can best assist clients by knowing what situations may qualify for the waiver, what type of evidence is needed to prove the claim, how the claims process works, and backup planning strategies to get the client care in case of a denial.

Read more related articles here:

The Hardship Exception to the Medicaid Penalty Period: Rare But Possible

Undue Hardship Instructional Guide

Also, read one of our previous Blogs at:

WHAT IS MEDICAID’S 5 YEAR LOOK BACK, AND HOW CAN IT AFFECT ME?

Click here for a short informative video from our own Attorney Bill O’Leary.