New Mexico Register / Volume XXIX, Issue 4 / February 27, 2018

 

 

This is an amendment to 8.281.500 NMAC, Section 7 and Section 15 effective 3/1/2018.

 

Explanatory statement: Statute citations throughout the rule were corrected to conform to correct legislative styles.

 

8.281.500.7          DEFINITIONS:

                A.            Actuarially sound:  With respect to an annuity or promissory note, the payments made to the beneficiary must not exceed his or her life expectancy and returns to the beneficiary an amount at least equal to the amount used to establish the contract.

                B.            Annuity:  A financial instrument, usually sold by a life insurance company, that pays out a regular income at fixed intervals for a certain period of time, often beginning at a certain age and continuing for the life of the owner.

                C.            Asset limit:  An applicant or recipient may be eligible for a MAP category of institutional care on the factor of resources if countable resources do not exceed $2,000.

                D.            Assets:  All income and resources of an applicant or recipient and his or her spouse, if applicable.

                E.            Authorized representative:  The individual designated to represent and act on the applicant’s or recipient’s behalf during the eligibility process.  The applicant or recipient or his or her authorized representative must provide formal documentation authorizing the named individual or individuals to access the identified case information for a specified purpose and time frame.  An authorized representative may be an attorney representing a person or household, a person acting under the authority of a valid power of attorney, a guardian, or any other individual or individuals designated in writing by the claimant.

                F.            Bona fide:  A bona fide agreement is made in good faith and is legally valid.

                G.            Community spouse:  The spouse of an institutionalized applicant or eligible recipient who is residing in the community and is not in an institution.

                H.            Community spouse resource allowance (CSRA):  An amount of a married couple’s resources that is set aside for the community spouse when the eligible recipient is institutionalized.  There is a MAD minimum and a federal maximum amount of resources that can be set aside for the community spouse.

                I.             Encumbrance:  A general term for any claim or lien on a parcel of real property, including mortgages, deeds of trust and abstracts of judgments.

                J.             Fair market value:  An estimate of the value of an asset, if sold at the prevailing price at the time it was actually transferred.  Value is based on criteria used in appraising the value of assets for the purpose of determining a MAP category of eligibility.

                K.            Home equity:  (Also known as equity value.)  The value of a home minus the total amount owed on it in mortgages, liens and other encumbrances.

                L.            Income:  Anything that an applicant or recipient receives in cash or in kind that he or she can use to meet his or her needs for food and shelter.  In-kind income is not cash, but is actual food or shelter, or something that the applicant or recipient can use to get one of these.

                M.           Institutionalized spouse:  An applicant or recipient who is in an acute care hospital, nursing facility, intermediate care facility for individuals with intellectual disabilities (ICF-IID), swing bed or certified in-state inpatient rehabilitation center.

                N.            Life estate:  An interest in property that exists for the life of a person.  For example, an individual gives a life estate in a house to person A and the remainder to person B.  Person A has a life estate and person B has a remainder interest until person A dies.

                O.            Liquid resource:  Cash or something that can easily be converted to cash within 20 business days.

                P.            Loan:  A transaction in which one party advances money to, or on behalf of another party, who promises to repay the lender in full, with or without interest.

                Q.            Long-term Care Insurance Policy: A type of insurance developed specifically to cover the costs of nursing homes, assisted living, home health care and other long-term care services as specified in the individual’s policy.

                R.            Lookback period:  A period of time in the past through which the ISD caseworker may examine all financial transactions for asset transfers.

                S.             Minimum monthly maintenance needs allowance:  A minimum level of income that the federal government allows to be set aside for the support of the community spouse when the other spouse is in an institution.

                T.            Negotiable agreement:  An agreement (i.e., a loan) in which the ownership of the agreement and the whole amount of money can be transferred from one person to another.

                U.            Non-liquid resource:  An asset such as real property, which cannot be easily converted to cash within 20 days.

                V.            Promissory note:  A promissory note is a written, unconditional agreement in which one person promises to pay a specified sum of money at a specified time to another person.

                W.           Protected Asset Limit:  Protected assets up to the amount of qualified long-term care insurance partnership (QLTCPI) benefit payments made to or on the behalf of individual.  This is the applicant’s or recipient’s protected asset limit (PAL).

                X.            Qualified [long-term care insurance partnership (QLTCPI)] state long-term care insurance partnership (QSLTCIP) program:  A partnership program that joins MAD with private insurance companies that offer long-term care insurance policies.  The MAP eligibility requirements are adjusted to provide financial incentives for eligible recipients to purchase private [QLTCP] QSLTCIP coverage.

                Y.            Relative:  Relative is defined as a spouse, son or daughter; grandson or granddaughter; step-son or step-daughter; in-laws; mother or father; step-mother or step-father; half-sister or half-brother; grandmother or grandfather; aunt or uncle; sister or brother; step-brother or step-sister; and niece or nephew.

                Z.            Remainder/remainder man:  An interest in property that occurs after a life estate.  For example, an individual gives a life estate in a house to person A and the remainder to person B.  Person A has a life estate and Person B has a remainder interest until person A dies.  Person B is also called the remainderman.

                AA.         Resources:  Cash or other liquid assets and any real or personal property that applicant or recipient (or spouse if any) owns and could convert to be used for his or her support and maintenance.

                BB.         Restricted coverage:  An eligible recipient who has restricted coverage may access medically necessary MAD benefits except for long-term care services in a nursing facility.

                CC.         Reverse mortgage:  A loan against home equity providing cash advances to a borrower and requiring no repayment until a future date.

                DD.         Sole benefit of:  A transfer is considered for the sole benefit of a spouse, blind or disabled child, or a disabled individual if the transfer is arranged in such a way that no individual or entity except the spouse, blind, or disabled child, or disabled individual can benefit from the assets transferred in any way, whether at the time of the transfer or at any time in the future.

                EE.         Spouse:  For purposes of this rule, a spouse is an individual who is legally married under the laws of a state, a territory, or a foreign jurisdiction in which the marriage was celebrated.

                FF.          Transfer:  To change over the possession, control or ownership of something.

[8.281.500.7 NMAC - Rp, 8.281.500.7 NMAC, 8/15/2015; A, 3/1/2018]

 

8.281.500.15        RESOURCE STANDARDS FOR MARRIED COUPLES:

                A.            Community property resource determination methodology:  Community property resource determination methodology is used in the eligibility determination for a married applicant or recipient who began institutionalization for a continuous period prior to September 30, 1989.

                                (1)           To determine the countable value of resources, the ISD worker must:

                                                (a)           add the total value of all resources owned by both spouses;

                                                (b)           exclude the separate property of the non- applicant or recipient spouse; and

                                                (c)           attribute one-half of the total value of the community property to the applicant or recipient spouse plus the value of his or her separate property;

                                                (d)           the resulting figure must be less than $2,000.

                                (2)           Application of community property rules:  Under community property rules, all property held by either spouse is presumed to be community property unless successfully rebutted by the applicant or recipient, or representative.  To rebut community property status, the applicant or recipient, or representative must document that the property was:

                                                (a)           acquired before marriage or after a divorce or legal separation;

                                                (b)           designated as separate property by a judgment or decree of any court;

                                                (c)           acquired by either spouse as a gift or inheritance; or

                                                (d)           designated as separate property by a written agreement between the spouses, including a deed or other written agreement concerning property held by either or both spouses in which the property is designated as separate property.

                                                                (i)            If one of the parties to this written agreement is incompetent, legal counsel must execute the agreement on behalf of the incompetent spouse.

                                                                (ii)           Property designated as separate by written agreement is evaluated according to current rules regarding transfer of resources.

                                                                (iii)         Income cannot be designated as separate by an agreement between spouses; income is considered separate only if it is derived from a resource that has been determined separate.

                B.            Spousal impoverishment:  Spousal impoverishment provisions apply if one spouse of a married couple is institutionalized for a continuous period of at least 30 consecutive days beginning on or after September 30, 1989.  See spousal impoverishment provisions of the Medicare Catastrophic Coverage Act of 1988 (MCCA).  No comparable treatment of resources and income is required for non-institutionalized applicants or recipients who do not have a spouse remaining in the community.  These provisions cease to apply as of the month following the month an applicant or recipient is no longer institutionalized or no longer has a community spouse.  If a community spouse or other dependents apply for a MAP category of eligibility they are subject to the rules governing treatment of income and resources for the individual applicant or recipient.

                                (1)           Resource assessment:  A resource assessment must be completed to evaluate a couple's resources as of the first moment of the first day of the month one member of the married couple is institutionalized for a continuous period of at least 30 consecutive days beginning on or after September 30, 1989.  This process is used to determine the amount of resources which may be protected for the community spouse.  See Subparagraph (f) below for resources which must be included in the resource assessment.  The resource assessment and computation of spousal shares occurs only once, at the beginning of the first continuous period of institutionalization beginning on or after September 30, 1989.  A new resource assessment may be completed if it is later determined that the original resource assessment was inaccurate.  Upon the death of the community spouse, the ISD worker may review the applicant’s or recipient’s resources.

                                                (a)           A MAP application does not need to be submitted at the time the assessment is requested.  A reasonable fee may be charged for completing assessments which are not made in conjunction with the applications.  Applications for assessments are available at the ISD offices which determine eligibility for a MAP category of institutional care.  Either member of the couple or their authorized representative may request an assessment application.

                                                (b)           The ISD worker must complete a resource assessment using the following criteria:

                                                                (i)            one member of a married couple became institutionalized on or after September 30, 1989 in an acute care hospital or nursing facility for a continuous period of at least 30 consecutive days;

                                                                (ii)           the institutionalized applicant or recipient has a spouse who remains in the community in a non-institutionalized setting; and

                                                                (iii)         the institutionalized spouse remains, or is likely to remain, institutionalized for a period of at least 30 consecutive days based on a written statement from his or her physician and supporting medical documentation; the institutionalized applicant or recipient is considered “likely to remain” even if he or she does not actually remain in an institution for 30 consecutive days if he or she met this condition at the beginning of the period of institutionalization.

                                                (c)           The ISD worker explains exactly what verification is required to complete the assessment.  If the ISD worker requires further information, the individual requesting the assessment is notified in writing and given a reasonable time period of at least 10 working days to provide the additional information.

                                                (d)           The institutionalized individual or his or her spouse or an authorized representative is responsible for providing all verification necessary to complete the assessment.

                                                (e)           The ISD worker completes the resource assessment within 45 calendar days of the date of receipt of the completed and signed assessment application unless verification is still pending by the 45th day.  In that case, the assessment is not completed until all necessary information is provided by the institutionalized individual or his or her spouse or authorized representative.

                                                (f)            Assessments include the total value of the couple's countable resources held jointly or separately as of the first moment of the first day of the month one spouse became institutionalized for a continuous period of at least 30 consecutive days beginning on or after September 30, 1989.  The assessment form identifies the spousal shares and the CSRA.  The couple is entitled to all resource exclusions allowed in 8.281.500.13 NMAC except that value limits for the exempt vehicle and household goods of the community spouse do not apply.  Assets excluded under the [QSLTCI] QSLTCIP program are counted in the spousal resource assessment.  The disregarded assets are included in determining the amount of the CSRA.  The disregarded asset is not counted in determining the applicant’s or recipient’s eligibility.

                                                (g)           When the assessment is complete, the ISD worker copies all documentation used to make the determination of countable resources and retains the documents in the case record.  The ISD worker also provides complete copies of the assessment forms to the following parties:

                                                                (i)            institutionalized applicant or recipient;

                                                                (ii)           community spouse; and

                                                                (iii)         authorized representative(s) if any.

                                                (h)           When the amount of the couple's total countable resources has been determined, the resulting amount is divided by two to determine the spousal shares.  The community spouse is entitled to his or her spousal share or the MAD minimum resource allowance, whichever is greater, up to the applicable federal maximum standard or an amount determined at a HSD administrative hearing or an amount transferred pursuant to a district court order.  The CSRA is the amount by which the greatest of the spousal shares or state minimum resource allowance exceeds the amount of resources otherwise available to the community spouse without regard to such an allowance.  The CSRA remains in effect until one of the spouses dies.  The remainder of the couple's total countable resources in excess of the CSRA is considered available to the institutionalized spouse.  If either the institutionalized spouse or the community spouse is dissatisfied with the computation of the spousal share of the resources, the attribution of resources or the determination of the community spouse resource allowance, he or she can request a HSD administrative hearing pursuant to 8.352.2 NMAC.  Refer to 8.352.2 NMAC for a detailed description of the HSD administrative hearing process.

                                (2)           CSRA standards:  The state minimum resource allowance and the federal maximum standards vary based on when the applicant or recipient became institutionalized for a continuous period of at least 30 consecutive days.  See 8.281.500.10 NMAC for the applicable standards.

                                (3)           CSRA revision:  The CSRA can be revised if either of the following occurs:

                                                (a)           a different amount is determined by a HSD administrative hearing final decision or district court decision; or

                                                (b)           inaccurate information was provided to the ISD worker at the time the spousal share was calculated.

                                (4)           Resource availability after computation of CSRA:  Resources of a couple remaining after the computation of the CSRA are considered available to the institutionalized spouse.  These remaining resources are compared to the resource limit.

                                                (a)           From the time of the initial determination of eligibility until the first regularly scheduled redetermination, the CSRA is not considered available to the institutionalized spouse.

                                                (b)           The CSRA may be applied retroactively for the three months prior to the month of application and is not considered available to the institutionalized spouse until the first periodic review following initial approval.

                                (5)           Resource transfer after computation of the CSRA:  When eligibility has been approved for an institutionalized spouse, resources equal to the amount of the CSRA may be transferred to the community spouse.  This transfer is intended to assist the community spouse in meeting his or her needs in the community.  Couples should transfer resources in the amount of the CSRA to the community spouse as soon as possible after approval for a MAP category of institutional care eligibility.  The institutionalized spouse or authorized representative can complete this transfer at any time between the date of the assessment and the first periodic review 12 months after approval.

                                (6)           Resource transfers which exceed the CSRA:  Resources transferred to a community spouse at less than fair market value are not subject to transfer penalties.  Resources transferred to the community spouse in excess of the computed CSRA are considered available to the institutionalized spouse and must be spent down to below the resource standard before eligibility can be established.  Resources transferred to the community spouse may exceed the CSRA if an increased amount is ordered by any court having jurisdiction or by the MAD director as part of a HSD administrative hearing final decision.

                                (7)           Transfer deadlines:  If the resource transfer is not completed by the institutionalized spouse by the end of the initial period of eligibility, the resources are considered completely available to the institutionalized spouse beginning with the first periodic review after the initial determination of eligibility.

                                (8)           Newly acquired assets:  After a continuous period of institutionalization begins, newly acquired resources or increases in the value of resources owned by the institutionalized spouse are countable.  Recalculations of eligibility for the institutionalized spouse based on countable resources are effective at the beginning of the month following the month in which new resources were received or an increase occurred in the value of resources already owned.

                                                (a)           The institutionalized spouse may transfer newly acquired resources to the community spouse without a penalty up to the difference between the CSRA and the state minimum resource standard in effect as of the date of institutionalization.

                                                (b)           After a continuous period begins, new resources acquired by the community spouse or increases in the value of resources which are part of the CSRA are not considered available to the institutionalized spouse.

[8.281.500.15 NMAC - Rp, 8.281.500.16 NMAC, 8/15/2015; A, 3/1/2018]