Medicaid filed, but there is a penalty because she gave away money to family. In the meantime we are Medicaid pending and have paid out money to keep her in the nursing home.

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Not exactly....... The transfer penalty will be a period of days in which although mom now qualifies for medicaid as she is now impoverished, she is ineligible for medicaid to pay due to the penalty. Penalty is a # of days ineligiblilty and usually starts the countdown from the date of the Medicaid application. The $ family or you are paying to the NH now and your moms income (like her SS each month) she is paying the NH now is paying for her staying (usually at private pay rate) at the NH while the # of days of ineligibility go to zero. It is not deducted per se from the penalty period.
Say moms NH Shady Acres is 5k a mo, penalty is 90 days, so mom / family will need to private pay the NH for those 90 days she is in the NH. Btw NH will get the notice of moms ineligibility as well. Mom will still each mo have her SS& any other monthly income to pay towards the 5K and then family pays the rest if mom is to remain at Shady Acres. Then on day 91, medicaid will kick in. Mom still must continue to have her SS and any other monthly income be paid to Shady as per medicaid SOC (share of cost or copay rules) but family responsibility to pay the "gap" stops. For a smaller penalty period (30-100 days imo) this approach probably can work for families. 

Mindy, ?'s for you..... You say it's "still pending", so mom is / has filed a formal in writing appeal to the penalty determination??? So she's gotten a letter from Medicaid stating the penalty $ amount & penalty period but she's appealing and there's a hearing date in the future? so she's technically "Medicaid Pending" till appeals over...??.
has it been that the Medicaid caseworker has contacted mom who entered the nH "medicaid pending" or you as to ?s regarding moms application and there appears there will be a penalty but the exact amount & # of days is still TbD???
They are somewhat different situations, which is it?
Is transfer real property or more $ that was gifted?
What is the $ amount looking like?...15k.... 150k? Lots more?

You know the Penalty is basically a math problem from Medicaid's viewpoint. Each state has a specific $ amount it pays a NH for the room & board of a Medicaid resident as each state administers its Medicaid program uniquely but within federal guidelines. The $ amt paid by Stats is called the "Diversion Penalty Divisor". Like for my late mom in a NH on Medicaid, it was about $ 160 a day R&B (which is low r&b). That's the DPD. So say mom gifted her home with assessor value of 100k to her son 3 years before her application. That's basically a penalty period of 625 days for a state with $160 R&B, so over 2 years till Medicaid can pay.
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