News Release - New York Counties Vary Widely in Rejecting Medicaid Applications for Nursing Home Care Due to Asset Transfers, Rockefeller Institute Study Shows

For Immediate Release –

April 9, 2009

Media contact: Mark Marchand – (518) 443-5283 / marchanm@rockinst.org

New York Counties Vary Widely in Rejecting Medicaid Applications for Nursing Home Care Due to Asset Transfers, Rockefeller Institute Study Shows

Variations Among Counties May Reflect Different Efforts to Detect Asset Transfers by Medicaid Applicants

Albany, N.Y. — During the last 10 years, New York counties outside New York City cited the transfer of personal financial assets in denying an average of 7 percent of applications for Medicaid coverage of nursing home care, according to new research from the Rockefeller Institute of Government.

The research — funded by the New York State Health Foundation and provided to the New York State Department of Health — also found a wide range of denial rates among the counties, with some denying close to half of applications examined in the study, while others denied less than one percent. The new Institute research is the first comprehensive statewide examination of the issue.

The study analyzed the role of asset transfers in county officials’ decisions to deny Medicaid coverage for nursing home care in the 57 counties outside of New York City. Fifty-two counties issued denials based on asset transfers. Among the state’s larger counties, the study found higher-than-average rejection rates in Rockland (24.2%), Ulster (22.6%), Saratoga (14.6%), and Suffolk (14.5%) counties. In Westchester (0.5%), Duchess (1.0%), Schenectady (1.2%), Rensselaer (1.3%), Orange (1.4%), and Erie (2.1%) counties, reported rejection rates were well below the statewide average.

Study authors noted that the percentages cited may underestimate the total asset transfer rates due to data limitations or because some asset transfers may have gone undetected.

“It is not clear why counties differ so much in their denials of Medicaid nursing facility services due to asset transfers,” said Ajita De, study author and research scientist at the Rockefeller Institute’s Health Policy Research Center. “Asset transfer denial rates may reflect how counties understand or implement the rules.”

Under federal eligibility rules, state and county officials can review financial records up to five years preceding a Medicaid application to determine whether individuals transferred assets to qualify for long-term care funding from Medicaid. New York applies this requirement only to nursing-home care, while some other states also apply the rule to personal care and home care. With growing demand for long-term care funding from Medicaid — 42 percent of the state’s $18.9 billion Medicaid budget was spent on long-term care in 2006 — officials in New York and elsewhere seek to minimize asset transfers to stem rising costs and ensure the program’s integrity as a critical safety net for poor individuals and families.

“We need to ensure both that all people entitled to Medicaid coverage receive it, and that taxpayer dollars are being spent prudently,” said David Sandman, senior vice president of the New York State Health Foundation. “Examining why some counties have denial rates that are four to five times higher than the statewide average is a call to action for program officials.”

Asset transfer is a practice whereby people with resources beyond Medicaid financial eligibility levels transfer all or a portion of their assets to become eligible for Medicaid. Various methods are used: establishing a trust, purchasing annuities and promissory notes, gifting assets, using personal service contracts with relatives to pay them for providing care, and selling or transferring ownership of certain assets at less than fair market value. Individuals and families can also “spend down” assets before they apply for Medicaid.

While comparisons with six other states indicated that New York’s efforts to track asset transfer denials may be more sophisticated than others, the study recommends future goals for research, including a better understanding of denial rates among all New York counties.

“A reasonable short-term agenda for policymakers could be to understand the reasons for county differences,” said Courtney Burke, director of the Institute’s Health Policy Research Center. “Further research could improve program administration, increase consistency among counties in enforcing rules about asset transfers, and enhance the availability of reliable data for future analyses.”

Similar research involving Medicaid applicants in New York City, which was not included in the study because the city uses a separate data collection system, could also be helpful, the study suggests.

For a full copy of the report, visit www.rockinst.org.

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About the Rockefeller Institute of Government

The Nelson A. Rockefeller Institute of Government, the public policy research arm of the State University of New York, conducts fiscal and programmatic research on American state and local governments. It works closely with federal, state, and local government agencies nationally and in New York, and draws on the State University’s rich intellectual resources and on networks of public-policy academic experts throughout the country. Reporters can find useful information on the Newsroom page of the Web site, www.rockinst.org.

About the New York State Health Foundation

The New York State Health Foundation (NYSHealth) is a private foundation dedicated to improving the health of all New Yorkers. NYSHealth has a three-part mission: expanding health insurance coverage, increasing access to high-quality health care services, and improving public and community health by educating New Yorkers about health issues and empowering communities to address them. For more information about NYSHealth and the work of its grantees, please visit: www.nyshealthfoundation.org.