Okay, I am NOT trying to ignite a firestorm here, nor am I looking for a moral perspective (I have a priest already, thank you!).
But REALISTICALLY speaking, do you honestly think that Medicaid has the time, resources, woman power, or even ability, to look into what assets someone has?
Can they REALLY determine if you have a bank account? How do they know if you have stocks?
OBVIOUSLY they can tell from public records that you own a house. However, stockholders names are not made public are they? And I don't think that the bank is either, is it?
I have grave doubts that Medicaid can "find" everything there is to find. After talking with someone who had: a car (and didn't tell Medicaid about this) and a bank account (and didn't tell Medicaid about this) and went to school and got loans (and didn't tell Medicaid), this information was NEVER "caught" by Medicaid. Admittedly, this was about 2 years ago, but still fairly recent, don't you think? I also know someone else who is doing the same thing and hasn't been caught.
No, I am not suggesting Medicaid fraud, I am simply asking a question. Anyone here ever not told Medicaid about an asset they or someone else has, and then either been caught or no?
To start with, each case worker is audited by supervisors who try to make sure that the applications are being carefully processed and properly approved.
If someone does fail to disclose the true extent of income and assets on a Medicaid application, and it gets past the case worker, the applicant can be assured that their State Medicaid agency will be swapping data with federal and state taxation agencies (IRS, state revenue departments) and other government departments. The bank and other financial institutions file annual reports on all of your accounts with the IRS and state revenue department. All this data is sifted and matched up with any public benefits payments you may be receiving.
It may take time for the data matching to detect a problem, but eventually the problem will be found.
In addition to the routine data matching programs within the state Mediciad agency, states have independent auditing departments which select and focus on certain Medicaid programs. The auditors learn to identify gaps in the application process, and follow up on applications that appear in the screens they set up to hold the Medicaid agency and the applicants accountable.
Data matching applies to all government benefits programs. If an applicant for a VA Aid & Attendance pension "forgets" to mention a bank account on an application, the account will eventually be matched to the applicant and the VA will impose an overpayment for all the money during all the months it had provided reimbursement for care.
It is unfortunate that the government must expend resources on the review and investigation of public benefits expenditures, but without these systems, more people would try to abuse the system, and there would be even less available for people who truly need the help.
We all have a duty to fully and honestly disclose the truth on applications for benefits.
There is a difference in how the review for regular Medicaid (food stamps, TANF) is done vs. the eligibility review for NH/LTC & Medicaid. NH can be done and enforced easier as for almost all there is SS income & retirement income that can be attached and the elderly don't get up and move often so can be found.
But the BIG game changer in Medicaid compliance/fraud is HMS. HMS is a huge company with many divisions - they do all the financials, compliance, eligibility audits, co-ordination of benefits, fraud, abuse, etc for CMS (Center for Medicare & Medicaid Services). They also do more than quite a few BCBS and larger hospital systems.As you can imagine their database is vast and it's very sophisticated. So every cent that is paid for via Medicare, Medicaid or health insurance or other insurance that has a health related claim is likely known by HMS.
HMS (publicly traded) got into doing Medicaid eligibility and Medicaid recovery programs for states about 3 years ago in addition to their existing insurance business. Up until then most states did a feeble attempt at Medicaid recoup as it was true state workers who get their salary no matter what. Now that HMS has it, recovery is viewed from the vantage of a collection agency.With the data they have from the insurance side of HMS, the detail on who you are is just keystrokes away. HMS is big on tight deadlines on challenging things. But that is the job they are given to do under the state's contract with them to recover Medicaid $ and make sure the eligibility is right. About 1/2 the states use HMS and more will do so
if you want to see HMS at work google Randy Drewett TX MERP to see examples of how the state of TX is going after Medicaid recoup via HMS. Drewett is a great solid elder care attorney who has a great website with all kinda info on estate planning for elders. And NO I don't know him or are even close to Beaumont.
Most states have also gotten better on X reference on ownership too with central database on home and any property ownership (cars, boats, etc). So eventually they will find out what those assets are and when they are transferred and the amount. So if you get a penalty for asset transfer it will be done with hard data by the state that determined the amount. Will be hard to refute.
Probate is public document and often on-line, so anyone including the state can find out who inherited what pretty easy if you have the time or reason to dig.
Remember when you do a Medicaid application, you sign off full access to the state system to get data on you wherever.... IRS, retirement, banks, etc. You also have to provide all information on life insurance, so they will know if mom has a term 100K policy and who is the beneficiary.
The brokerage houses send 1099's on all accounts so that will show up too.
The only thing I can think of that is private is if there is a living trust - a real living trust and not those chicken dinner "trusts" marketed to the gullible elderly. LT doesn't go to probate but every single asset must be changed to trust ownership. Anything left out and that part has to go to probate. Imho, LT needs a significant amt of assets to be funded to be worthwhile. If you mom has an LT then you are likely not on this site .....LOL.
Every week in the paper in my area there is yet another person who is getting jail time or a huge financial hit or assets seized for fraud related to $ gotten from FEMA or their insurance company related to Hurricane Katrina. That was in 2005. Six years ago. My point is that likely & eventually it will surface and the penalty will be quite nasty. Some of these were small amounts like 15K but balloon to 40K with penalties. Just not worth it.
Here 's my thoughts:
because of the existing contract to purchase on the farm I'd bet that her application will get reviewed by a higher level Medicaid staffer than the initial caseworker....and she needs an elder law atty to "shepherd" her application. Her income sounds low enough that it's under the amount. But the farm could be an issue. I don't know about farms but for ranches, they can be an exempt asset even if they are huge (TX ranches are done by sections as you need a lot of land for grazings and could easily be a dz. sections which is over 7,000 acres) as long as its a working ranch. That it is a "working" ranch seems to be the key to being exempt. Farms & ranch income are common enough that there is a ? specifically on ranch income on the annual renewal for TX Medicaid.
If the contract wasn't done by a real estate attorney & so was a more casual agreement, it could have issues to start with. really to be on the safer side, I'd gather up all her & your legal (DPOA, MPOA, old wills, etc) and get all reviewed & updated by elder law atty and have them deal with her application & the paperwork that I'd bet the state is going to need above the usual paperwork.
Do you know if the contact was done as a SCIN (self canceling installment note) if she died before the balloon? These are often used for property sales between family. Medicaid, well, I'd bet they hate those.... But probably something needs to happen to be written to be an adjunct (just what I'm not sure) or whatever to the existing contract so that the stepson doesn't face a Medicaid claim or lein on the farm after your sister dies that could be an issue for him down the road.
I'm going to PM one of the members who has insight on contracts to see if she can come up with ideas as well.
One problem that comes up with trusts seems to be that folks hear they can do a trust and they think "it's in a trust so no worries!"! But the trust has to have its own reliable source of funding for the items in the trust over time. A trust is its own legal entity and has costs associated with that entity & needs an income steam to pay those costs. Like say you put grannies house in a trust...so how is all the costs on the house, like taxes, insurance, utilities, etc going to be paid? And paid year after year? If grannie ends up in a facility, she may not have extra $ anymore, so then what? to me & just my non-legal, non-financial professional opinion, is that a trust requires long term financial planning with resources to have the trust work.
So Sra, what are you trying to do??...is it that mom needs a NH and mom has assets & you are trying to find some magic way to hold onto her assets for yourself or for her? If its for her, mom can do a special needs trust for her $ allowed by Medicaid in most states but the beneficiary of the trust will be the state. An elder law atty can tell you what the SNT options are for your state. If its retaining liquid assets for you, that isnt gong to happen as the lookback will find the transferring of moms $.
If mom has a home, that might be able to be kept as an asset & be inherited as per valid will but this approach will require that you pay for all costs on property from now till mom dies and then go through the probate process and deal with MERP. This approach runs risk, and most people are risk adverse.
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