In a case argued by ElderLawAnswers members Richard Meyer and Bill Browning, along with New York elder law attorney René H. Reixach, Jr.,, a federal district court rules that North Dakota properly assessed a transfer-of-assets penalty against a 78-year-old Medicaid applicant who had funded a pooled trust account prior to applying for benefits. Center for Special Needs Trust Administration, Inc. v. Olson (D.N.D., No. 1:09-cv-072, April 25, 2011).
In November, 2007, Allen Kemmet, a 78-year-old nursing home resident from Bismark, North Dakota, entered into a pooled trust joinder agreement with the Center for Special Needs Trust Administration, a Florida non-profit organization. Pursuant to the agreement, Mr. Kemmet transferred $54,450 into a pooled trust account with the Center. In January 2008, Mr. Kemmet filed a Medicaid application, which the county Medicaid agency approved, in part because it misread the application and believed that Mr. Kemmet was 54 years old.
When Mr. Kemmet died in October 2008, the state discovered that he was actually above age 65 and it determined that he should not have been eligible for Medicaid because the transfer into a pooled trust was a disqualifying transfer. It then proceeded to demand reimbursement from the trust for the cost of Mr. Kemmet's care. The Center filed an action in federal court requesting a declaratory judgment, an injunction preventing the state from seeking recovery from pooled trusts upon the death of a beneficiary, and damages under a civil rights law, claiming that the state's recovery statute conflicted with federal law. The state responded by claiming, among other things, that the Center did not have standing because the transfer into the pooled trust disqualified Mr. Kemmet from receiving benefits. Both sides filed motions for summary judgment.
The U.S. District Court for the District of North Dakota partially grants both motions for summary judgment but dismisses the Center's claim. Although the court finds that the Center had standing, it relies on a 2008 Centers for Medicare and Medicaid Services (CMS) letter addressing the issue of transfers into pooled trusts and rules that "[u]nder CMS's interpretation, Kemmet's transfer of assets to the pooled trust was not exempt from application of the transfer of assets penalty provisions." The court finds that "CMS's interpretation is neither plainly erroneous nor inconsistent with the Medicaid Act."
For the full text of this decision, go to: https://www.ga-elderlaw.com/Kemmet.pdf
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