What to do When your Client Receives a Medicaid 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.

What to do When your Client Receives a Medicaid Denial

Even the best plan for Medicaid eligibility 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: Determine the Cause of the Medicaid Denial

This is the first and most important step in finding a resolution for your client’s case. Review the denial notice carefully to determine what the cause for denial is and whether it is one issue or multiple issues with the Medicaid application. If you’re confused about the exact issue, contact the caseworker for clarification.


Not every issue is a flat-out denial of benefits. Perhaps the caseworker imposed a penalty period you were not anticipating – be sure to speak with the caseworker to determine how they arrived at this conclusion and which transactions they are considering to be improper.


Step 2: Review your Client’s Information

Once the cause of the denial is established, review your client’s Medicaid application and their information.  Make sure you did not make any mistakes on the application or that you did not miss anything in your client’s financial history – especially if a penalty period is being applied to potentially improper transfers. This may also be a good time to review your client’s financial history with them, to ensure they did not withhold any important information from you when you began this process.


If missing information – financial or non-financial – is the cause for denial, this is typically remedied by providing the requested documentation. Hopefully, you or the client would have received a notice of further information needed prior to receiving the denial. Make sure the Medicaid office knows you are the point of contact for the client so you can field these requests without having to get the client involved.


Step 3: Review your State’s Medicaid regulations

If you believe your client’s Medicaid application was sound and should be approved, review your state’s Medicaid manual to find supporting documentation. For example, if the caseworker is deeming a funeral trust to be a countable asset and the client is over-resourced, go to your state’s Medicaid manual to find the section dealing with funeral trusts and burial funds to ensure your client’s particular product meets the requirements to be considered exempt.  With the state Medicaid manual on your side, you should be able to get the denial resolved quickly.


Step 4: Speak with the Caseworker of Supervisor

Once you’ve gathered all the necessary information, speak with the caseworker directly on the case.  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.


If the cause for denial falls into a gray area in which the correct application of the state rules is less clear, ask the caseworker/supervisor for suggestions to get the applicant qualified for benefits. Though you may disagree with their position, if doing as they say leads to a quick approval, it is best to follow their direction.


Step 5: If Necessary, Appeal The Decision

No attorney wants their case to get to the point of a fair hearing, but sometimes it does become necessary.  Discuss frankly with the client what the fair hearing will entail and what to expect.  Some clients may not want to proceed. It will depend on what’s on the line. For example, if the caseworker applied a 1-month penalty period due to some transactions they deemed to be improper, you and your client might decide it’s best to pay during the penalty period rather than contest the decision.  However, if the caseworker applied a 12-month penalty period, you and the client might be more willing to attempt the fair hearing.


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, Krause Financial Services is here to help.  For information on navigating a fair hearing, check out our recent webinar on the subject.  If your client’s denial was a result of a product purchased through our office, we will provide fair hearing support and expert testimony at no cost. For more information on this service, visit our “Expert Testimony and Litigation Support” page here.


Sign In to Comment on this Article

Contact Us
Given the opportunity, we know we can help you find a better solution
Contact Us Quote Request