A few years ago I got my mom on Medicaid and she is now in a nursing home. Part of the Medicaid requirements is that she sends a check for half her assets to the nursing home fund. The nursing home then takes their fees out of this fund until it is exhausted then Medicaid start paying. This is known as the penalty period. The duration of the penalty period is calculated by dividing the money mom gave them by the monthly nursing home fee. The fund should run out just as Medicaid starts. There is a problem with this. The nursing home fees increased during the penalty period and the fund ran out before the end of the penalty period. The nursing home now want me to make up the difference with a check for thousands of dollars. Has this happened to anyone? Any advice on what I should do? It seems that the penalty period should be adjusted each time the nursing home rates increase.

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Can you give a bit more information? What you wrote is kinda confusing to me ....sorry!
So is it that your mom was on community based Medicaid (she was still living at home or in IL or with family) but now has moved into a NH and has applied for LTC medicaid program??

AND she has a transfer penalty placed? Like she gifted $, a house, car or other assets. Is this Right?
If so, Was the transfer penalty placed while she was on community Medicaid OR after she moved into the NH? What was the $ amount of the transfer penalty? 
OR is it that there is NOT a transfer penalty? 

Was Day 1 of NH admission the date of her NH/LTC Medicaid application?

What is her monthly income (like the $ amont of her SS, or pension, or annuities)?
Is she a widow?
Is she paying all the above monthly income to the NH? Your post reads that she is only paying 50% or half of her income, is that right? 
Are you calling the monthly income she is paying to the NH her "penalty period"? 

Has the NH set up a PNA - personal needs trust account - in her name at the NH? If so, is it building by $ 60 each month? Less than $ 60?

And are there any recurring costs getting paid out of the PNA? Like $ 15 a week for the on site beauty shoppe. Or $ 30 a mo for cable?

For the NH, is she there under an admission contract at Medicaid rates or private pay rate?
I think I may know somewhat what's happening but your extra info will help me fill in an answer with the background as to why NH is billing the way they are. & why it's super importante to get fixed up ASAP.
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