Payment of Medicaid Applicant's Attorneys' Fees Is Partial Return of Assets that May Reduce Penalty Period

Wyoming's highest court rules that the state should not have denied a Medicaid applicant's request to reduce her penalty period because her sons partially returned transferred assets by paying her attorneys' fees. Anderson v. State of Wyoming (Wyo., No. 2018 WY 135, Dec. 4, 2018).

Nursing home resident Lucile Anderson transferred cash and property to her sons. She applied for Medicaid and reported $83,476 in uncompensated transfers. The state determined that she had transferred $441,382.60 in assets and imposed a penalty period. Ms. Anderson appealed the length of the penalty period, but the state rejected the appeal and the trial court agreed.

Ms. Anderson informed the state that her sons had paid her attorneys $23,818.63 to pursue the appeal of the penalty period. She requested that the state treat that payment as a partial repayment of assets. The state denied her request, the trial court affirmed the denial, and Ms. Anderson appealed.

The Wyoming Supreme Court reverses, holding that the state should not have denied "Ms. Anderson’s application for a reduction in her penalty period to account for the return of assets represented by her sons’ payment of attorney fees and costs." According to the court, nothing in the state's Medicaid rules precluded the payment of attorneys' fees being counted as a return of assets.

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