MDV 208757 (07/27/2023)
Undue hardship waiver filed late, not backdated

DHA Case No. MDV 208757 (Wis. Div. of Hearings and Appeals July 27, 2023) (DHS) ↓ Download PDF

To waive the entire divestment penalty, an undue hardship waiver request must be filed within 20 days of the undue hardship notice letter mailed by the agency. If filed later, the earliest effective date is the date the agency receives the waiver request. In this case, the petitioner filed the waiver April 28, two weeks after the deadline. The waiver was approved with an effective date of April 28, leaving the divestment penalty from February 21 (the date of application) to April 28 intact. ALJ Beth Whitaker concluded the agency was correct in following the Medicaid Eligibility Handbook rule and had no authority to make an exception, however sympathetic the circumstances.

Have comments, corrections, or feedback? A fair hearing decision that should be published?
✉️ Email feedback.

Get email summaries of new decisions:

Preliminary Recitals

Pursuant to a petition filed on May 18, 2023, under Wis. Stat. § 49.45(5), and Wis. Admin. Code § HA 3.03(1), to review a decision by the Marinette County Department of Human Services regarding Medical Assistance (MA), a hearing was held on July 12, 2023, by telephone.

The issue for determination is whether

Note: The original decision is missing a full statement of the issue. The issue is whether an undue hardship waiver filed late can be backdated to cover the entire divestment penalty period.

There appeared at that time the following persons:



Petitioner’s Representative:

Department of Health Services
1 West Wilson Street, Room 651
Madison, WI 53703
By: Kelly Bruette
Marinette County Department of Human Services
Wisconsin Job Center Suite B
1605 University Drive
Marinette, WI 54143

Beth Whitaker
Division of Hearings and Appeals

Findings of Fact

  1. Petitioner (CARES # —) is a resident of Oconto County.
  2. On February 21, 2023, petitioner applied for Long Term Care Medicaid benefits.
  3. On March 27, 2023, a divestment was determined and entered.
  4. On March 28, 2023, the agency mailed to petitioner paperwork for claim undue hardship, with a deadline of April 16, 2023.
  5. On April 28, 2023 the agency received the petitioner’s undue hardship claim.
  6. On May 23, 2023, the Division received petitioner’s requested for hearing by U.S. Mail, postmarked May 19, 2023.


When an individual, the individual’s spouse, or a person acting on behalf of the individual or his spouse, transfers assets at less than fair market value, the individual is ineligible for MA coverage of nursing facility services. 42 U.S.C. 1396p(c)(1)(A); Wis. Stat., §49.453(2)(a); Wis. Admin. Code, §DHS 103.065(4)(a); MA Handbook, Appendix 17.2.1. Divestment does not impact on eligibility for standard medical services such as physician care, medications, and medical equipment (all of which are known as “MA card services” in the parlance). The penalty period is the number of days determined by dividing the value of property divested by the average daily nursing home cost to a private pay patient. MA Handbook, App. 17.5.2.

A divestment penalty can be waived when it would deprive the person of care that could endanger the person’s life or health. Handbook, App. 22.4.1. If an undue hardship waiver request is filed within 20 days of the undue hardship letter, the entire divestment period will be waived. Handbook, App. The person must show (1) that the property is not recoverable, and (2) if she is currently institutionalized, notification of involuntary discharge. Handbook, App. 22.4.5.

Undue hardship exceptions can be made when there has been a divestment. Medicaid Eligibility Handbook § 22.4. A divestment penalty period must be waived when the imposition of the penalty period deprives the individual of either medical care such that the individual’s health or life would be endangered or food, clothing, shelter, or other necessities of life. Id.

Nothing about the divestment is disputed here. It is also undisputed that petitioner showed grounds for the waiver. Petitioner’s request for an Undue Hardship Waiver was granted by the respondent, with an effective date of April 28, 2023. Petitioner argues that the waiver should be backdated to cover then entire divestment penalty period.

Petitioner’s representative stated that when petitioner’s property was sold in 2019, petitioner realized proceeds in the amount of $80,000, however, unauthorized individuals took advantage of petitioner and diverted the funds for their own use, making them unavailable for petitioner’s use and qualifying him for an undue hardship waiver of the divestment penalty period.. The agency agrees that there is a factual basis for an undue hardship waiver. It approved the waiver effective the date it was received, April 28, 2023. The agency’s position is that the waiver request was filed late and that it must follow program rules and make it effective the date of receipt, rather than an earlier date.

The entire issue in dispute is the effective date of the undue hardship waiver. The law and the agency’s rules on this question are clear. If a request for an undue hardship waiver is received by the agency without 20 calendar days of the undue hardship letter mailing date, and the request is approved, the effective date of the wavier is, for divestment, that the entire divestment penalty period will be waived. See Medicaid Eligibility Handbook (MEH) Sec. IF the undue hardship waiver requested is received later than 20 calendar days after the notification is mailed, the effective date is the date of receipt by the agency. See MEH

Petitioner’s representative did not dispute the notice mailing date or that the waiver request was filed late. He explained that he was trying to help his brother, the petitioner, and did the best he could. He was credible and sympathetic. However, the rules that the agency must follow do not provide for deviation from the deadlines because of someone’s personal situation, even if the result seems unfair or harsh in the particular circumstances. Similarly, I cannot order the agency to extend the deadline or change the rules out of sympathy for petitioner or his representative. The Division’s hearing examiners lack the authority to render a decision on equitable arguments. See, Wisconsin Socialist Workers 1976 Campaign Committee v. McCann, 433 F. Supp. 540, 545 (E.D. Wis. 1977). This office must limit its review to the law as set forth in statutes, federal regulations, and administrative code provisions. The agency correctly applied the law to the facts of this case to made the undue hardship waiver effective the date it was received.

Conclusions of Law

The agency determined that petitioner qualified for an undue hardship waiver. Because the request was filed after the deadline, the correct effective date is the date of receipt. The agency correctly determined that petitioner’s undue hardship waiver was effective April 28, 2023, because it was received on that date, which was after the deadline for filing it.



That the petition for review is dismissed.

[Request for a rehearing and appeal to court instructions omitted.]

Leave a Reply

Your email address will not be published. Required fields are marked *