North Carolina General Statutes
Article 2 - Programs of Public Assistance.
§ 108A-58.1 - Ineligibility for medical assistance based on transferring assets for less than fair market value.

108A-58.1. Ineligibility for medical assistance based on transferring assets for less than fair market value.
(a) General Rule. - Except as otherwise provided herein, an individual who is otherwise eligible to receive medical assistance under this Part is ineligible for Medicaid coverage and payment for the services specified in subsection (d) during the period specified in subsection (c) if the individual or the individual's spouse transfers an asset for less than fair market value on or after the "lookback date" specified in subsection (b).
(b) Lookback Date. -
(1) Except as otherwise provided herein, the lookback date is the date specified in 42 U.S.C. 1396p(c)(1)(B).
(2) Notwithstanding subdivision (1), the lookback date with respect to the medical services specified in subdivision (d)(2) is the date specified in 42 U.S.C. 1396p(c)(1)(B) or February 1, 2003, whichever is later.
(c) Penalty Period. - The penalty period for the transfer of assets for less than fair market value is the period specified in 42 U.S.C. 1396p(c)(1)(D), (E), and (H).
(d) Medical Services. -
(1) In the case of an institutionalized individual, the transfer of assets penalty applies with respect to nursing facility services, a level of care in any institution equivalent to that of nursing facility services, and to home- or community-based services furnished under the State's Community Alternatives Program waiver pursuant to 42 U.S.C. 1396n(c) or (d), and pursuant to the hardship waiver under subsection (k) of this section.
(2) In the case of a noninstitutionalized individual, the transfer of assets penalty applies with respect to home health services and personal care services as defined in 42 U.S.C. 1396d(a)(7) and (24) and, to the extent permitted by federal law, such other long-term care services specified by rules adopted by the Department of Health and Human Services pursuant to subsection (k) of this section.
(e) Assets. - Assets are the income and resources of an individual or the individual's spouse (including the individual's or spouse's home) as defined in 42 U.S.C. 1396p(h) and 42 U.S.C. 1396p(c)(1)(G), (I), and (J).
(f) Fair Market Value and Uncompensated Value. -
(1) The fair market value of an asset is the value (minus any valid and legally enforceable liens, mortgages, and encumbrances against the asset) that would have been received if the asset had been sold for good and valuable consideration at the prevailing market price at the time the asset was transferred. In the case of real or personal property that is taxable under Subchapter II of Chapter 105 of the General Statutes, there is a rebuttable presumption that the fair market value of the property is its most recent value as ascertained under Subchapter II of Chapter 105 of the General Statutes (minus any valid and legally enforceable liens, mortgages, and encumbrances against the property).
(2) The uncompensated value of an asset is its fair market value minus the amount of good and valuable consideration received in exchange for the asset's transfer.
(g) Individual. - An individual is a person who applies for or is receiving medical assistance under this Part regardless of whether the person was, at the time an asset was transferred, a Medicaid applicant or recipient. The term "individual" also includes an individual's legal representative, anyone acting at the individual's direction or request, and any person, agency, or court acting lawfully on behalf of the individual.
(h) Institutionalized and Noninstitutionalized Individuals. -
(1) An institutionalized individual is an individual who meets the criteria set forth in 42 U.S.C. 1396p(h)(3), regardless of whether the individual was institutionalized at the time an asset was transferred.
(2) A noninstitutionalized individual is any individual who (i) is not an institutionalized individual, (ii) is an aged, blind, or disabled person who is categorically or medically needy pursuant to 42 C.F.R. 120 Subpart B, C, or D or a qualified Medicare beneficiary as defined in 42 U.S.C. 1396d(p)(1), and (iii) is not eligible for medical assistance under this Part based on his or her eligibility for an optional State supplement pursuant to 42 C.F.R. 435.232.
(i) Exceptions. -
(1) This section does not apply if an individual establishes by the greater weight of the evidence that the transfer was exclusively for some purpose other than establishing or retaining eligibility for medical assistance under this Part.
(2) This section does not apply to any transfer specified in 42 U.S.C. 1396p(c)(2)(A), (B), (C)(i), or (C)(iii).
(j) Application to Life Estates and Income Producing Real Property. - The Department of Health and Human Services may apply federal transfer of assets policies in accordance with this section to (i) life estates purchased by or on behalf of the recipient, and (ii) to real property excluded as "income producing", tenancy-in-common, or as nonhomesite property made "income producing." The Department shall exclude from countable resources any life estate in real property that is in the recipient's home and is measured by the recipient's life. Federal transfer of assets policies applied to income producing real property shall become effective not earlier than October 1, 2001. Federal transfer of assets policies applied to real property excluded as tenancy-in-common, or as nonhomesite property made income producing in accordance with this subsection, shall become effective not earlier than October 1, 2005.
(k) Hardship Waiver. - The Department of Health and Human Services shall waive a transfer of assets penalty that has been imposed or is imposable under this section if the Department determines that imposition of the penalty would create an undue hardship.
(l) Rules and Compliance with Federal Law. -
(1) This section shall be interpreted and administered consistently with governing federal law, including 42 U.S.C. 1396p(c).
(2) The Department of Health and Human Services shall determine and publish at least annually the average monthly cost of nursing facility services for private patients that will be used in determining the length of a penalty period under this section.
(3) The Department of Health and Human Services shall provide for a hardship waiver process in accordance with 42 U.S.C. 1396p(c)(2)(D).
(4) The Department of Health and Human Services may adopt administrative rules that are necessary and appropriate to implement this section or the requirements of 42 U.S.C. 1396p(c) or other federal laws governing the transfer of assets and Medicaid eligibility. (2006-66, s. 10.5(b); 2006-221, ss. 8(a)-(c).)

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