The Medicaid Application process is something like preparing for a five year audit. The Department of Health and Family Services., along with the Office of Inspector General will review all payments made by check or credit card that are over $500.00 and an explanation must be prepared for each of these. If caregivers were paid in cash, there would need to be affidavits prepared to allow the caregiver to clearly state what services they gave the elder in exchange for the money they received and how much money they received for the work.
If there were gifts made to family members or friends, the elder may receive requests to explain these. A gift is acceptable to a family member if it is customary and reasonable. Larger gifts will likely be penalized and the attorney helping with the application will be needed to help cure these gifting penalties with a special annuity or perhaps ask the adult child to return the gifted amount.
In all, there is a fair amount of diligence an attorney needs to put into reviewing the bank statements and asset statements, while requesting all of the documentation that will be required during the process by the state. Ideally, the documents will be thoroughly reviewed and ready to submit at the time of filing the application. When the documents are officially requested there is little time to gather them or go over them and only two extensions are allowed. I submit my Medicaid applications with a cover letter identifying all of the documents sent, along with a brief explanation if one is necessary for any anticipated challenges that can be foreseen.
Inevitably, there are more requests and communications necessary before the multi-layers of review are completed and the application is approved. Lately, there has been more need of filing appeals for denied applications and this has added to the overall expense for filing the applications. The elder is protected during this process by what is called the Medicaid pending status, while living in the skilled nursing or supportive living facility. This is a lengthy process that demands diligence and advocacy skills from the attorney.
