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Wisconsin Department of Health and Family Services |
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Wisconsin Department of Health and Family Services |
If there was a divestment during the lookback period or any time after, and if none of the above exceptions apply, the institutionalized person must be determined ineligible for a period of time.
During this penalty period Medicaid will not pay the institutionalized person's daily care rate in the nursing home. A Community Waivers applicant or recipient is ineligible for Community Waivers. S/he may, however, still be eligible for MA card services (4.7.15)
The penalty period begins with the month of divestment and extends for the number of months that result from dividing the divested amount (4.7.2.7) by the average nursing home cost to a private pay patient ($5,339).
Round all fractions downward. For example, 8.6 = 8 months, .7 = 0 months.
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Example 1: Jeff transfers $83,512 in cash, CDs, and stocks to The Green Tree Brethren, Inc. $83,512 divided by $5339 is 15.64. Jeff is ineligible for 15 months. |
To shorten a divestment penalty period when some of the originally divested amount is returned, subtract the divestment amount returned from the original divestment amount. Then divide the divestment remainder by the original average nursing home pay rate that was used to calculate the original divestment penalty period. To determine the new divestment penalty period, drop the fraction, use whole months, and begin the new shortened penalty period in the month the divestment occurred.
Send the client a notice advising him/her that the consequence of the partial divestment payback is a reduced penalty period and specify the new penalty dates.
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Example 2: Jeff transfers $83,000 in cash to his family in January. The penalty period is 16. months. But in March he returns $53,000 of the divestment. To determine the shortened divestment penalty period, $83,000 minus $53,000 is $30,000. $30,000 divided by $5,339 is 5.61. The worker sends Jeff a notice that says that the shortened penalty period is five months, beginning in January. |
If another divestment occurs when a penalty period is in effect, another penalty must be calculated for the most recent divestment. This calculation would use the divestment penalty divisor currently effective. The whole month penalty period that is derived from this most recent divestment determination is added onto the previous penalty, but the new penalty period will not begin until the existing period has expired. The penalty periods cannot run concurrently.
Send the client a notice advising him/her that the consequence of the new divestment is an increased penalty period and specify the new penalty dates.
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Example 3: In June, Jeff in Example 1, transfers another $40,000 to friends. $40,000 divided by $5,339 is 7.49. The divestment penalty period is 7 months. The new divestment period of 7 months begins in July, the month after the original divestment penalty period has ended. The new divestment penalty period does not run concurrently with the original divestment period. |
The divestment report, CRM1403A, doesn’t register divestment penalty changes. If it is necessary to remove a divestment penalty, update AAAT, run SFED, and confirm. Then contact EDS (608-221-4746, ext. 3103). Provide EDS with the date that the divestment penalty was removed. The level of care will then be revised. Also contact the appropriate individual at the client’s nursing home to submit bills for the period that is now covered by institutional MA.
Reminder: the divestment notices are inaccurate. Send a manual notice explaining eligibility for card services, the reason for service reduction, and the number of months in the penalty period when a case receives a divestment penalty. Include the legal citation [49.453 Wis. Stats.].
This page last updated in Release Number : 06-01
Release Date: 03/13/06
Effective Date: 01/01/06
