5 Steps to Follow If Your Client’s Medicaid Compliant Annuity Results in a Denial

Attorney helping his client with a denial

Disclaimer: With Medicaid, VA, and insurance regulations frequently changing, past blog posts may not be presently accurate or relevant. Please contact our office for information on current planning strategies, tips, and how-to's.

Even the best Medicaid Compliant Annuity plan can result in a denial of benefits.  More often than not, the denial is the result of a misunderstanding or missing information and it can easily be resolved with the caseworker.  It is important to take the denial seriously and work toward a solution as soon as possible since the delay of benefits can be very costly to your clients.  If you receive a denial on your client’s case, follow the steps below to remedy to the situation.

Step 1: Make Sure an Elder Law Attorney is Involved

The Krause Agency always recommends agents work with a local attorney on every Medicaid Compliant Annuity case.  There is much more to Medicaid planning than the spend-down process.  Your client may require a Power of Attorney be drafted, an estate plan be created, or in some cases, guardianship be established.  Working with an elder law attorney also ensures if your client does receive a denial, you have a partner to assist you with the legal aspects of this process.

Step 2: Determine the Cause of the Denial

This is the most important step in finding a resolution for your client’s case. Review the denial notice carefully to determine why the annuity was deemed to be non-compliant. All Medicaid Compliant Annuities sold through The Krause Agency will meet your state’s specific requirements, so if there is an issue, it is likely a simple misunderstanding by the caseworker.

Also, be sure to check how they are treating the annuity (either as a resource or as an uncompensated transfer).  Knowing what the caseworker’s concern is will allow you and the attorney to resolve the issue more quickly.

Step 3: Review Your State’s Medicaid Compliant Annuity Regulations

If the state Medicaid agency is incorrectly treating your client’s Medicaid Compliant Annuity, review your state’s Medicaid manual to find supporting documentation of their error. For example, if the caseworker is stating the annuity is not actuarially sound, go to the section of the Medicaid manual which describes the actuarially sound definition and which life expectancy table must be used. With the state Medicaid manual on your side, you should be able to get the denial resolved quickly. If you need help finding this information, go to the State Resources page of our website and sign up for Agent Access to see your state’s annuity rules.

Step 4: Speak With the Caseworker or Supervisor

Once you’ve gathered all the necessary information, you or the attorney should speak with the caseworker directly.  Explain your position and use the Medicaid manual information to support your client’s case. Many times, a supervisor must become involved.  Many caseworkers misunderstand or are misinformed on their own state’s rules, but a supervisor should be able to help.

Step 5: If Necessary, Appeal the Decision

The chances of your client’s case requiring a fair hearing are small.  Almost all denials can be remedied at the caseworker level, resulting in Medicaid eligibility for your client.  However, if a fair hearing does become necessary, The Krause Agency is here to help.  If any product purchased through our office causes a denial of benefits, we offer expert testimony and litigation support at no cost to you or the client.  We stand behind our products and planning services and are here to ensure the best result for your client.

While we hope you won’t need to use this information, we know that denials do happen once in a while. The best thing to do is remain calm and follow the steps above to resolve the issue and gain Medicaid eligibility for your clients.  If your case does end up requiring a fair hearing, simply send us a copy of the denial notice and will work with you and the attorney to achieve a solution for your client.