The Division of Medical Assistance and Health Services recently issued a new Med Comm increasing the divisor utilized in calculating a Medicaid applicant’s potential penalty period from the existing divisor of $332.50 to $423.95 per day. This is a positive for clients and applicants that need to apply, or have applied, for Medicaid as it potentially reduces the penalty period and thus the wait time for applicants that do have prior gifting issues to deal with. Now the State’s use of the divisor is more in line with what the actual cost of care is in New Jersey.
The average daily cost of nursing home services is called the penalty divisor which is adjusted annually through an independent survey of all nursing facilities in New Jersey. The penalty divisor is used to determine the penalty period for an individual applying for Long Term Services and Supports when that individual transfers resources/assets for less than the fair market value. The number of days in a penalty period is calculated using the value of the transferred resource/asset divided by the amount of the penalty divisor and then rounded down. The penalty clock begins on the date that an individual is determined to be otherwise eligible, but for the penalty.
For all cases received on or after April 1, 2017, the new daily penalty divisor of $423.95 must be used in the calculation.
For those cases pending on April 1, 2017, where the previous penalty divisor of $332.50 was used to calculate the penalty period, it will now be recalculated using the new daily divisor amount of $423.95. However, eligibility may not be established prior to April 1, 2017, when applying the new daily figure for these pending cases.
If you and your family have questions or need assistance with Medicaid, please contact our office at 856-857-6000