alty period, will be considered to be an
available resource for the donor. DSHS
will inquire into the sources of all funds
used to pay for care in order to determine if some of them are coming from a
constructive trust — regardless of when
such a trust was established.
It was then decided by the HCA
that more detail was required for the
revisions to the rules. The changes
were deleted by further rule change
on March 14, 2014 (WSR 14-07-059).
New materials are now being prepared
to expand on the explanation of these
rules (under WSR 14-11-049, dated
May 15, 2014). However, the HCA
has taken the position that the new
procedures are adequately supported
by the Fair Hearings, other WAC sec-
tions, and the State Medicaid Manual
prepared by the federal Department
of Health and Human Services (HHS),
It will be difficult to document that a
transfer of resources is a gift for which
proceeds are not intended to be later
available to pay for any needed care.
A letter prepared by an attorney at the
time may — or may not — provide ad-
equate proof. Another possible alter-
native is to prepare a gift tax return at
the time as a proof of intent.
Under these rules, a gift within the
five-year lookback period can only be
made to qualify for Medicaid long-
term care assistance if the cost of care
for the applicant (parent) is less than
the income of the applicant, so that
none of the gifted funds are used to
pay for care. This situation may occur
rarely for some types of alternative
care. Such a situation is highly unlike-
ly to ever occur for institutional care.
(For the latter case, if an applicant has
such a high income, other private-pay
strategies for care would be available,
so a Medicaid application would not
be appropriate.) However, as another
concern, there have been suggestions
by HCA that all current transfers to
qualify for care might be considered to
be exploitation of a vulnerable adult,
which would likely end all transfers.
If care assistance is later required,
all transfers that might have estab-
lished constructive trusts (including
those before the five-year lookback
period) may be examined for intent.
Proving that the transfers did not
establish constructive trusts may be
difficult. The key consideration will
be whether any of these resources are
traceable to later payments for the
long-term care needs of the donor.
When an applicant for Medicaid assistance applies for long-term
care, the application often takes two
to three months for processing by
DSHS. For nursing home care, if eligibility is established, coverage can be
retroactive for up to 90 days, back to
the date of application. However, for
alternative care, coverage is not retroactive and will start as of the date
of the award letter.
This raises a question: How is a
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Medical Malpractice / Personal Injury /
Appellate Practice / Insurance Bad Faith
Leonard J. Feldman, J.D.
PAR TNER, P WRLK
HARVARD LAW SCHOOL, 1991