## Facts

- A Medicaid application was filed for Martha Weiss in October 2011.
- Within the Medicaid look-back period, Weiss transferred $78,236.74 to her daughter, Beverly Blier.
- Weiss did not dispute at the fair hearing that the transfer was without consideration and made to qualify her for Medicaid.
- Blier later used $41,600 of the transferred funds to pay for Weiss’s assisted-living care before Weiss entered a nursing facility.
- Suffolk County Department of Social Services (DSS) found Weiss otherwise eligible for Medicaid but imposed a 6.84-month penalty period of ineligibility for nursing facility services based on the full $78,236.74 uncompensated transfer.
- Weiss sought a reduction of the penalty period to reflect the $41,600 spent on assisted-living care.

## Issues

1. Whether the New York State Department of Health (DOH) acted unlawfully or irrationally in refusing to reduce the nursing-home penalty period where the transferee used part of the gifted funds to pay for the applicant’s assisted-living care.
2. Whether DOH’s determination was supported by substantial evidence under CPLR 7803(4).

## Decision

- The proceeding was dismissed as against DSS.
- DOH’s fair-hearing determination was confirmed.
- The petition was denied on the merits as against DOH because DOH’s refusal to reduce the penalty period was supported by substantial evidence and had a rational basis.
- The court held that payments by the daughter for assisted-living care did not constitute a return of transferred assets or other qualifying compensation that would reduce the penalty.

## Legal Principles

- Uncompensated transfers made within the Medicaid look-back period may trigger a penalty period of ineligibility for Medicaid coverage of nursing facility services (42 U.S.C. § 1396p(c), as implemented by New York law and regulations).
- The penalty is generally calculated using the full value of the uncompensated transfer divided by the applicable regional nursing-facility rate.
- A penalty reduction or elimination is available only within limited regulatory exceptions, including when transferred assets are returned to the applicant or the applicant shows fair-market-value compensation.
- Payments made by a transferee to third parties for the applicant’s assisted-living care, even if funded by the original gift, do not qualify as a “return” of assets to the applicant for purposes of reducing the nursing-facility penalty.
- Courts uphold an agency’s determination if it is supported by substantial evidence and defer to the administering agency’s reasonable interpretation of Medicaid regulations.

## Conclusion

The court upheld DOH’s determination imposing a nursing-home Medicaid penalty based on Weiss’s full uncompensated transfer to her daughter, ruling that the daughter’s later payments for assisted-living care did not meet regulatory requirements for returned assets or fair-market-value compensation that would shorten the penalty period.


Weiss v. Suffolk Cnty. Dep't of Soc. Servs., 121 A.D.3d 703 (N.Y. App. Div. 2d Dep't 2014)