Lawmakers demand better adherence to Medicaid's eligibility and asset transfer rules

Two federal lawmakers are calling on the Centers for Medicare & Medicaid Services to crack down on states that don't enforce eligibility and asset-transfer regulations.

“[Twenty two] states and the District of Columbia have yet to comply with federal law,” notes a scathing joint letter from Rep. Fred Upton (R-MI), chairman of the House Energy and Commerce Committee, and Sen. Orrin G. Hatch (R-UT), chairman of the Senate Finance Committee. The lawmakers have given CMS until Feb. 27 to explain its current role in policing state efforts, as well as future plans. Medicaid outlays for long-term care services topped $126 billion in 2013, they noted.

Both the 1993 budget law and the Deficit Reduction Act of 2005 discourage divestiture schemes as a Medicaid eligibility strategy.

“For example, federal law notes that individuals who transfer assets for less than fair market value during a set period of time before applying for Medicaid [coverage] may be subject to a penalty period in which they are ineligible,” the letter notes. The correspondence adds that federal laws spell out how states should treat assets like annuities and trusts when determining Medicaid assistance.

Click here to see the lawmakers' letter.