If the individual fails to report receipt of a lump sum payment within 10 days, the CAO will decide whether an overpayment has occurred.
If the individual chooses to count the lump sum payment as a resource, the CAO will take one of the following actions:
If the lump sum payment was spent on medical expenses, including MA LTC facility services, the CAO must treat the amount spent as if the individual never received it. The individual remains eligible for benefits and there is no overpayment. 55 Pa. Code § 178.1(j)
Example: Mr. J. receives a retroactive payment of $5,048 on February 3. His representative does not report the payment until February 18. He uses it to pay Mr. J.’s medical bills, including a pre-existing bill from the LTC facility for February.
Mr. J. remains eligible for MA LTC, because his countable resources are below the limit. The LTC facility must accept payment at the MA LTC facility rate for February and adjust its billing to The Department of Human Services (DHS).
If the lump sum payment was not spent on medical expenses, the individual does not qualify on the date the resources exceeded the limit and remains ineligible as long as total resources continue to exceed the limit. 55 Pa. Code § 178.1(c)
Example: Mr. J. receives a retroactive payment of $5,048 on February 3 and uses it to buy a car for his wife on February 18. He is not eligible for MA LTC benefits from February 3 through February 18 because his total resources exceeded the MA LTC resource limit. Because Mr. J. did not report receiving the payment within 10 days, an overpayment has occurred.
The CAO finds that Mr. J. received fair consideration. Since his resources are now below the limit, he is eligible for MA LTC benefits. The CAO will continue benefits and refer the overpayment to the Office of Inspector General (OIG), Bureau of Fraud Prevention and Prosecution. (See Supplemental Handbook Chapter 910, Overpayment Recovery.)
NOTE: If the individual chooses to count a lump sum payment as income, he must report it within 10 days of receiving it. If it is not reported within 10 days and the lump sum payment would cause a decrease in benefits, or the individual would not be eligible, an overpayment has occurred.
If the CAO thinks that an individual has all or part of a lump sum payment that he did not report, the CAO must contact OIG. (See Chapter 440.73.)
Updated January 12, 2015, Replacing March 12, 2012