A Massachusetts appeals court rules that the state may impose a second penalty period based on the same transfers of assets after one of the transfers was cured and the applicant reapplied for benefits before the first penalty period was over. Burt v. Director of the Office of Medicaid (Mass. Ct. App., No. 13-P-1853, May 29, 2015).
Catherine Harrington made two separate transfers of assets—one for $45,000 and one for $134,834. She applied for Medicaid benefits in December 2006. Based on the transfers, the state imposed a penalty period until December 2008. More than 60 days after Ms. Harrington was notified about the penalty period, her niece returned the $45,000 transfer. In June 2008, Ms. Harrington filed a second application for benefits. The state imposed a new penalty period, running from March 2008 until July 2009, for the $134,834 transfer that occurred before the first application.
Ms. Harrington appealed, arguing that her penalty period should have begun in December 2006 and that it was impermissible for the state to impose a new penalty period for the same transfer she was already penalized for. Under Massachusetts regulations, because the transfer was cured more than 60 days after the notice about the penalty period, Ms. Harrington had to reapply for benefits. The state argued its regulation requires it to review a new application in its entirety and make a new determination about when the applicant is “otherwise eligible.” The trial court affirmed the state’s decision, and Ms. Harrington appealed.
The Massachusetts Court of Appeals affirms, holding that the state’s imposition of the second penalty period does not violate state or federal law. According to the court, “nothing in the plain language of the regulations requires that the start date for the recalculated penalty period be the same day that the prior penalty period began.” The court rules that an applicant does not become “otherwise eligible” at a time when nursing home services are being paid for and that Ms. Harrington was paying for services until March 2008.
