1.1                          A bill for an act 
  1.2             relating to human services; requiring biennial 
  1.3             information on asset diversion; expanding information 
  1.4             available through the senior linkage line; applying 
  1.5             excess homestead equity towards the cost of long-term 
  1.6             care; extending the prohibition on certain transfers 
  1.7             of income and assets to 72 months prior to application 
  1.8             for medical assistance; providing a period of 
  1.9             ineligibility; providing exceptions; requiring the 
  1.10            commissioner of human services to seek a waiver; 
  1.11            amending Minnesota Statutes 2002, sections 256.01, by 
  1.12            adding a subdivision; 256.975, subdivision 7; 
  1.13            256B.0595, by adding subdivisions. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 2002, section 256.01, is 
  1.16  amended by adding a subdivision to read: 
  1.17     Subd. 21.  [EFFORTS TO CONTROL ASSET DIVERSION.] The 
  1.18  commissioner shall include with each biennial budget information 
  1.19  on the extent of asset transfers used by Minnesotans to qualify 
  1.20  for public programs, including, if ascertainable, the cost to 
  1.21  public programs to pay medical and support costs for persons who 
  1.22  have diverted assets in order to qualify, any changes in federal 
  1.23  law or rule in this area, and any recommendations for 
  1.24  legislative action to strengthen the ability of the commissioner 
  1.25  to control or prevent asset transfers as a method of qualifying 
  1.26  for public assistance programs. 
  1.27     Sec. 2.  Minnesota Statutes 2002, section 256.975, 
  1.28  subdivision 7, is amended to read: 
  1.29     Subd. 7.  [CONSUMER INFORMATION AND ASSISTANCE; SENIOR 
  2.1   LINKAGE.] (a) The Minnesota board on aging shall operate a 
  2.2   statewide information and assistance service to aid older 
  2.3   Minnesotans and their families in making informed choices about 
  2.4   long-term care options and health care benefits.  Language 
  2.5   services to persons with limited English language skills may be 
  2.6   made available.  The service, known as Senior LinkAge Line, must 
  2.7   be available during business hours through a statewide toll-free 
  2.8   number and must also be available through the Internet. 
  2.9      (b) The service must assist older adults, caregivers, and 
  2.10  providers in accessing information about choices in long-term 
  2.11  care services that are purchased through private providers or 
  2.12  available through public options.  The service must: 
  2.13     (1) develop a comprehensive database that includes detailed 
  2.14  listings in both consumer- and provider-oriented formats; 
  2.15     (2) make the database accessible on the Internet and 
  2.16  through other telecommunication and media-related tools; 
  2.17     (3) link callers to interactive long-term care screening 
  2.18  tools and make these tools available through the Internet by 
  2.19  integrating the tools with the database; 
  2.20     (4) develop community education materials with a focus on 
  2.21  planning for long-term care and evaluating independent living, 
  2.22  housing, and service options; 
  2.23     (5) conduct an outreach campaign to assist older adults and 
  2.24  their caregivers in finding information on the Internet and 
  2.25  through other means of communication; 
  2.26     (6) implement a messaging system for overflow callers and 
  2.27  respond to these callers by the next business day; 
  2.28     (7) link callers with county human services and other 
  2.29  providers to receive more in-depth assistance and consultation 
  2.30  related to long-term care options; and 
  2.31     (8) link callers with quality profiles for nursing 
  2.32  facilities and other providers developed by the commissioner of 
  2.33  health; and 
  2.34     (9) link callers with lenders and others who can provide 
  2.35  information and assistance on the possible use of assets, 
  2.36  including home equity, to pay for long-term care services 
  3.1   without enrolling in public assistance programs. 
  3.2      (c) The Minnesota board on aging shall conduct an 
  3.3   evaluation of the effectiveness of the statewide information and 
  3.4   assistance, and submit this evaluation to the legislature by 
  3.5   December 1, 2002.  The evaluation must include an analysis of 
  3.6   funding adequacy, gaps in service delivery, continuity in 
  3.7   information between the service and identified linkages, and 
  3.8   potential use of private funding to enhance the service. 
  3.9      Sec. 3.  Minnesota Statutes 2002, section 256B.0595, is 
  3.10  amended by adding a subdivision to read: 
  3.11     Subd. 1b.  [PROHIBITED TRANSFERS.] (a) Notwithstanding any 
  3.12  contrary provisions of this section, this subdivision applies to 
  3.13  transfers involving recipients of medical assistance that are 
  3.14  made on or after its effective date and to all transfers 
  3.15  involving persons who apply for medical assistance on or after 
  3.16  its effective date if the transfer occurred within 72 months 
  3.17  before the person applies for medical assistance, except that 
  3.18  this subdivision does not apply to transfers made prior to March 
  3.19  1, 2003.  A person, a person's spouse, or any person, court, or 
  3.20  administrative body with legal authority to act in place of, on 
  3.21  behalf of, at the direction of, or upon the request of the 
  3.22  person or the person's spouse, may not give away, sell, dispose 
  3.23  of, or reduce ownership or control of any income, asset, or 
  3.24  interest therein for less than fair market value for the purpose 
  3.25  of establishing or maintaining medical assistance eligibility 
  3.26  for the person.  For purposes of determining eligibility for 
  3.27  medical assistance services, any transfer of such income or 
  3.28  assets for less than fair market value within 72 months before 
  3.29  or any time after a person applies for medical assistance may be 
  3.30  considered.  Any such transfer is presumed to have been made for 
  3.31  the purpose of establishing or maintaining medical assistance 
  3.32  eligibility, and the person is ineligible for medical assistance 
  3.33  services for the period of time determined under subdivision 2b, 
  3.34  unless the person furnishes convincing evidence to establish 
  3.35  that the transaction was exclusively for another purpose or 
  3.36  unless the transfer is permitted under subdivision 3b or 4b. 
  4.1      (b) This section applies to transfers of income or assets 
  4.2   for less than fair market value including assets that are 
  4.3   considered income in the month received, such as inheritances, 
  4.4   court settlements, and retroactive benefit payments or income to 
  4.5   which the person or the person's spouse is entitled but does not 
  4.6   receive due to action by the person, the person's spouse, or any 
  4.7   person, court, or administrative body with legal authority to 
  4.8   act in place of, on behalf of, at the direction of, or upon the 
  4.9   request of the person or the person's spouse. 
  4.10     (c) This section applies to payments for care or personal 
  4.11  services provided by a relative unless the compensation was 
  4.12  stipulated in a notarized written agreement which was in 
  4.13  existence when the service was performed, the care or services 
  4.14  directly benefited the person, and the payments made represented 
  4.15  reasonable compensation for the care or services provided.  A 
  4.16  notarized written agreement is not required if payment for the 
  4.17  services was made within 60 days after the service was provided. 
  4.18     (d) This section applies to the portion of any income, 
  4.19  asset, or interest therein that a person, a person's spouse, or 
  4.20  any person, court, or administrative body with legal authority 
  4.21  to act in place of, on behalf of, at the direction of, or upon 
  4.22  the request of the person or the person's spouse, transfers to 
  4.23  any annuity that exceeds the value of the benefit likely to be 
  4.24  returned to the person or the person's spouse while alive, based 
  4.25  on estimated life expectancy of adults entering long-term care.  
  4.26  The commissioner shall adopt rules establishing life 
  4.27  expectancies of adults entering long-term care. 
  4.28     (e) This section applies to an annuity described in this 
  4.29  paragraph purchased on or after March 1, 2002, that: 
  4.30     (1) is not purchased from an insurance company or financial 
  4.31  institution that is subject to licensing or regulation by the 
  4.32  Minnesota department of commerce or a similar regulatory agency 
  4.33  of another state; 
  4.34     (2) does not pay out principal and interest in equal 
  4.35  monthly installments; or 
  4.36     (3) does not begin payment at the earliest possible date 
  5.1   after annuitization.  
  5.2      Sec. 4.  Minnesota Statutes 2002, section 256B.0595, is 
  5.3   amended by adding a subdivision to read: 
  5.4      Subd. 2b.  [PERIOD OF INELIGIBILITY.] (a) Notwithstanding 
  5.5   any contrary provisions of this section, this subdivision 
  5.6   applies to transfers involving recipients of medical assistance 
  5.7   that are made on or after its effective date and to all 
  5.8   transfers involving persons who apply for medical assistance on 
  5.9   or after its effective date, regardless of when the transfer 
  5.10  occurred, except that this subdivision does not apply to 
  5.11  transfers made prior to March 1, 2003.  For any uncompensated 
  5.12  transfer occurring within 72 months prior to the date of 
  5.13  application, at any time after application, or while eligible, 
  5.14  the number of months of cumulative ineligibility for medical 
  5.15  assistance services shall be the total uncompensated value of 
  5.16  the assets and income transferred divided by the statewide 
  5.17  average per person nursing facility payment made by the state in 
  5.18  effect on the date of application.  The amount used to calculate 
  5.19  the average per person nursing facility payment shall be 
  5.20  adjusted each July 1 to reflect average payments for the 
  5.21  previous calendar year.  For applicants, the period of 
  5.22  ineligibility begins with the month in which the person applied 
  5.23  for medical assistance and satisfied all other requirements for 
  5.24  eligibility, or the month the local agency becomes aware of the 
  5.25  transfer, if later.  For recipients, the period of ineligibility 
  5.26  begins in the month the agency becomes aware of the transfer, 
  5.27  except that penalty periods for transfers made during a period 
  5.28  of ineligibility as determined under this section shall begin in 
  5.29  the month following the existing period of ineligibility.  If 
  5.30  the transfer was not reported to the local agency at the time of 
  5.31  application, and the applicant received medical assistance 
  5.32  services during what would have been the period of ineligibility 
  5.33  if the transfer had been reported, a cause of action exists 
  5.34  against the transferee for the cost of medical assistance 
  5.35  services provided during the period of ineligibility or for the 
  5.36  uncompensated amount of the transfer that was not recovered from 
  6.1   the transferor through the implementation of a penalty period 
  6.2   under this subdivision, whichever is less.  The action may be 
  6.3   brought by the state or the local agency responsible for 
  6.4   providing medical assistance under chapter 256G.  The total 
  6.5   uncompensated value is the fair market value of the income or 
  6.6   asset at the time it was given away, sold, or disposed of, less 
  6.7   the amount of compensation received.  No cause of action exists 
  6.8   for a transfer unless:  
  6.9      (1) the transferee knew or should have known that the 
  6.10  transfer was being made by a person who was a resident of a 
  6.11  long-term care facility or was receiving that level of care in 
  6.12  the community at the time of the transfer; 
  6.13     (2) the transferee knew or should have known that the 
  6.14  transfer was being made to assist the person to qualify for or 
  6.15  retain medical assistance eligibility; or 
  6.16     (3) the transferee actively solicited the transfer with 
  6.17  intent to assist the person to qualify for or retain eligibility 
  6.18  for medical assistance. 
  6.19     (b) If a calculation of a penalty period results in a 
  6.20  partial month, payments for medical assistance services shall be 
  6.21  reduced in an amount equal to the fraction, except that in 
  6.22  calculating the value of uncompensated transfers, if the total 
  6.23  value of all uncompensated transfers made in a month not 
  6.24  included in an existing penalty period does not exceed $200, 
  6.25  then such transfers shall be disregarded for each month prior to 
  6.26  the month of application for or during receipt of medical 
  6.27  assistance. 
  6.28     Sec. 5.  Minnesota Statutes 2002, section 256B.0595, is 
  6.29  amended by adding a subdivision to read: 
  6.30     Subd. 3b.  [HOMESTEAD EXCEPTION TO TRANSFER 
  6.31  PROHIBITION.] (a) This subdivision applies to transfers 
  6.32  involving recipients of medical assistance that are made on or 
  6.33  after its effective date and to all transfers involving persons 
  6.34  who apply for medical assistance on or after its effective date, 
  6.35  regardless of when the transfer occurred, except that this 
  6.36  subdivision does not apply to transfers made prior to March 1, 
  7.1   2003.  A person is not ineligible for medical assistance 
  7.2   services due to a transfer of assets for less than fair market 
  7.3   value as described in subdivision 1b if the asset transferred 
  7.4   was a homestead, and: 
  7.5      (1) title to the homestead was transferred to the 
  7.6   individual's relatives who are residing in the homestead and are 
  7.7   the individual's: 
  7.8      (i) spouse; 
  7.9      (ii) child who is under age 21; 
  7.10     (iii) blind or permanently and totally disabled child as 
  7.11  defined in the supplemental security income program; 
  7.12     (iv) sibling who has equity interest in the home and who 
  7.13  was residing in the home for a period of at least one year 
  7.14  immediately before the date of the individual's admission to the 
  7.15  facility; or 
  7.16     (v) son or daughter who was residing in the individual's 
  7.17  home for a period of at least two years immediately before the 
  7.18  date of the individual's admission to the facility and who 
  7.19  provided care to the individual that, as certified by the 
  7.20  individual's attending physician, permitted the individual to 
  7.21  reside at home rather than in an institution or facility; 
  7.22     (2) a satisfactory showing is made that the individual 
  7.23  intended to dispose of the homestead at fair market value or for 
  7.24  other valuable consideration; or 
  7.25     (3) the local agency grants a waiver of a penalty resulting 
  7.26  from a transfer for less than fair market value because denial 
  7.27  of eligibility would cause undue hardship for the individual and 
  7.28  there exists an imminent threat to the individual's health and 
  7.29  well-being.  Whenever an applicant or recipient is denied 
  7.30  eligibility because of a transfer for less than fair market 
  7.31  value, the local agency shall notify the applicant or recipient 
  7.32  that the applicant or recipient may request a waiver of the 
  7.33  penalty if the denial of eligibility will cause undue hardship.  
  7.34  In evaluating a waiver, the local agency shall take into account 
  7.35  whether the individual was the victim of financial exploitation, 
  7.36  whether the individual has made reasonable efforts to recover 
  8.1   the transferred property or resource, and other factors relevant 
  8.2   to a determination of hardship.  If the local agency does not 
  8.3   approve a hardship waiver, the local agency shall issue a 
  8.4   written notice to the individual stating the reasons for the 
  8.5   denial and the process for appealing the local agency's decision.
  8.6      (b) When a waiver is granted under paragraph (a), clause 
  8.7   (3), a cause of action exists against the person to whom the 
  8.8   homestead was transferred for that portion of medical assistance 
  8.9   services granted within 72 months of the date the transferor 
  8.10  applied for medical assistance and satisfied all other 
  8.11  requirements for eligibility or the amount of the uncompensated 
  8.12  transfer, whichever is less, together with the costs incurred 
  8.13  due to the action.  The action shall be brought by the state 
  8.14  unless the state delegates this responsibility to the local 
  8.15  agency responsible for providing medical assistance under 
  8.16  chapter 256G. 
  8.17     (c) The equity value permitted to be transferred under 
  8.18  paragraph (a) shall not exceed $........ 
  8.19     Sec. 6.  Minnesota Statutes 2002, section 256B.0595, is 
  8.20  amended by adding a subdivision to read: 
  8.21     Subd. 4b.  [OTHER EXCEPTIONS TO TRANSFER PROHIBITION.] (a) 
  8.22  This subdivision applies to transfers involving recipients of 
  8.23  medical assistance that are made on or after its effective date 
  8.24  and to all transfers involving persons who apply for medical 
  8.25  assistance on or after its effective date regardless of when the 
  8.26  transfer occurred, except that this subdivision does not apply 
  8.27  to transfers made prior to March 1, 2003.  A person or a 
  8.28  person's spouse who made a transfer prohibited by subdivision 1b 
  8.29  is not ineligible for medical assistance services if one of the 
  8.30  following conditions applies: 
  8.31     (1) the assets or income were transferred to the 
  8.32  individual's spouse or to another for the sole benefit of the 
  8.33  spouse, except that after eligibility is established transfers 
  8.34  to a spouse are permitted only to comply with the provisions of 
  8.35  section 256B.059; 
  8.36     (2) the institutionalized spouse, prior to being 
  9.1   institutionalized, transferred assets or income to a spouse, 
  9.2   provided that the spouse to whom the assets or income were 
  9.3   transferred does not then transfer those assets or income to 
  9.4   another person for less than fair market value.  At the time 
  9.5   when one spouse is institutionalized, assets must be allocated 
  9.6   between the spouses as provided under section 256B.059; 
  9.7      (3) the assets or income were transferred to a trust for 
  9.8   the sole benefit of the individual's child who is blind or 
  9.9   permanently and totally disabled as determined in the 
  9.10  supplemental security income program and the trust reverts to 
  9.11  the state upon the disabled child's death to the extent medical 
  9.12  assistance has paid for services for the child.  This clause 
  9.13  applies to a trust established after the commissioner publishes 
  9.14  a notice in the State Register that the commissioner has been 
  9.15  authorized to implement this clause due to a change in federal 
  9.16  law or the approval of a federal waiver; 
  9.17     (4) a satisfactory showing is made that the individual 
  9.18  intended to dispose of the assets or income either at fair 
  9.19  market value or for other valuable consideration; or 
  9.20     (5) the local agency determines that denial of eligibility 
  9.21  for medical assistance services would cause undue hardship and 
  9.22  grants a waiver of a penalty resulting from a transfer for less 
  9.23  than fair market value because there exists an imminent threat 
  9.24  to the individual's health and well-being.  Whenever an 
  9.25  applicant or recipient is denied eligibility because of a 
  9.26  transfer for less than fair market value, the local agency shall 
  9.27  notify the applicant or recipient that the applicant or 
  9.28  recipient may request a waiver of the penalty if the denial of 
  9.29  eligibility will cause undue hardship.  In evaluating a waiver, 
  9.30  the local agency shall take into account whether the individual 
  9.31  was the victim of financial exploitation, whether the individual 
  9.32  has made reasonable efforts to recover the transferred property 
  9.33  or resource, and other factors relevant to a determination of 
  9.34  hardship.  If the local agency does not approve a hardship 
  9.35  waiver, the local agency shall issue a written notice to the 
  9.36  individual stating the reasons for the denial and the process 
 10.1   for appealing the local agency's decision.  When a waiver is 
 10.2   granted, a cause of action exists against the person to whom the 
 10.3   assets were transferred for that portion of medical assistance 
 10.4   services granted within 72 months of the date the transferor 
 10.5   applied for medical assistance and satisfied all other 
 10.6   requirements for eligibility, or the amount of the uncompensated 
 10.7   transfer, whichever is less, together with the costs incurred 
 10.8   due to the action.  The action shall be brought by the state 
 10.9   unless the state delegates this responsibility to the local 
 10.10  agency responsible for providing medical assistance under this 
 10.11  chapter. 
 10.12     Sec. 7.  [EFFECTIVE DATE; WAIVER APPLICATION.] 
 10.13     (a) Sections 3 to 6 are effective July 1, 2003, to the 
 10.14  extent permitted by federal law.  If any provision of these 
 10.15  sections are prohibited by federal law, the provision shall 
 10.16  become effective when federal law is changed to permit their 
 10.17  application or a waiver is received.  The commissioner of human 
 10.18  services shall notify the revisor of statutes when federal law 
 10.19  is enacted or a waiver is received and publish a notice in the 
 10.20  State Register.  The commissioner must include the notice in the 
 10.21  first State Register published after the effective date of the 
 10.22  federal changes. 
 10.23     (b) If, by July 1, 2003, any provisions of sections 3 to 6 
 10.24  are not effective because of prohibitions in federal law, the 
 10.25  commissioner of human services shall apply to the federal 
 10.26  government by August 1, 2003, for a waiver of those 
 10.27  prohibitions, and those provisions shall become effective upon 
 10.28  receipt of a federal waiver, notification to the revisor or 
 10.29  statutes, and publication of a notice in the State Register to 
 10.30  that effect.  If the commissioner applies for a waiver of the 
 10.31  lookback period, the commissioner shall seek the longest 
 10.32  lookback period the federal government will approve, not to 
 10.33  exceed 72 months.  The commissioner shall provide a copy of the 
 10.34  waiver application by August 10, 2003, to the chairs of the 
 10.35  senate health, human services, and corrections budget division 
 10.36  and the house health and human services finance committee.