Medicaid Denied? Fair Hearings & Appeals in PA

A denial notice from the County Assistance Office lands at the worst possible moment. Your parent is already in a nursing facility, the bills are running at hundreds of dollars a day, and the letter says Medical Assistance will not pay. The denial is not the end of the application. Pennsylvania gives every applicant the right to appeal to a fair hearing before the Department of Human Services, and many denials rest on problems that can be corrected. What you cannot do is sit on the letter.

Why Applications Get Denied

Long-term care Medicaid applications in Pennsylvania fail for a short list of reasons, and the right response depends on which one you are facing.

Verification gaps are the most common and the most fixable. DHS reviews five years of financial records for the applicant and spouse, and it asks for statements, deeds, life insurance values, and explanations of specific deposits and withdrawals. If the caseworker does not receive an item by the deadline, the application is denied for failure to provide information, even if the applicant was financially eligible all along. Families assembling sixty months of records for a parent who did not keep files hit this constantly.

Excess resources denials say the applicant's countable assets exceed the limit, which is $8,000 for most single applicants in 2026. Sometimes the finding is right and the applicant needs to spend down. Sometimes DHS has counted something it should not have, such as an inaccessible asset, an exempt burial arrangement, or the community spouse's protected share. Our pages on Medicaid eligibility in Pennsylvania and countable versus exempt assets explain what should and should not be on that list.

Transfer penalties arise when DHS finds gifts or below-market transfers during the five-year lookback and imposes a period of ineligibility. The notice will state the transfer amounts and the penalty period. These findings turn on facts: whether the transfer actually happened as DHS believes, whether it falls under an exception (transfers to a spouse, a disabled child, or a caregiver child, among others), and whether the money was actually payment for something of value. The mechanics are covered on our five-year lookback page.

A separate problem is the application that is simply stuck. Federal regulations require an eligibility decision within 45 days for most applicants and 90 days for disability-based applications (42 C.F.R. § 435.912). An application that has sat past those limits with no decision can itself be appealed. The clock differs when there is no notice: where no written notice was required, 55 Pa. Code § 275.3(b)(2) allows 60 days from the action or the failure to act, and where a required notice was never sent, or an administrative error caused the delay, § 275.3(b)(3) extends the appeal right to six months (and beyond that only with a sworn affidavit meeting the regulation's requirements).

Reading the Denial Notice

Before anything else, read the notice line by line. It states the reason for the denial, the regulations DHS relied on, and your appeal rights, usually with an appeal form attached. Three things matter most: the date of the notice, because the 30 days run from it; the stated reason, because a verification denial and a transfer penalty call for different responses; and the figures, because caseworkers work fast and the resource totals and transfer amounts on notices contain errors more often than families expect. Compare every number on the notice against your own records before you decide the denial is correct.

Requesting a Fair Hearing

The appeal is a written request for a fair hearing, filed within the 30-day window. Use the form that came with the notice if you have it, but a signed letter identifying the applicant, the notice, and the decision you are appealing works as well. File it with the County Assistance Office that issued the denial, and keep proof of the date you filed. The program office must forward the appeal to the Bureau of Hearings and Appeals within three business days. State briefly why the decision is wrong; you do not need legal argument at this stage, and you can supplement later. The following is general information, not legal advice for your situation; deadlines and procedures on your own notice control.

One more timing point for people already receiving benefits: when DHS proposes to reduce or stop assistance a recipient is already getting, an appeal filed within the advance notice period generally keeps benefits in place until the hearing decision (55 Pa. Code § 275.4). That protection does not help a first-time applicant who was denied, but it matters when an existing grant is being cut off.

What the Hearing Looks Like

Fair hearings are conducted by the DHS Bureau of Hearings and Appeals, which is independent of the County Assistance Office that denied the application. An Administrative Law Judge who had no involvement in the original decision presides. The hearing can be held by telephone or in person, at the appellant's choice, and most are held by telephone. It is informal compared to a courtroom: the judge takes testimony and documents from both sides, the caseworker explains the denial, and you (or your attorney) present your evidence and can question the county's witnesses. Bring, or submit in advance, every document that answers the stated reason for denial: the missing bank statements, the proof that a "gift" was actually repayment of a loan, the appraisal showing fair market value.

Federal law requires final administrative action within 90 days of the hearing request in most cases (42 C.F.R. § 431.244(f)). In practice, many appeals resolve sooner and without a hearing at all, because the county reviews the file once the appeal is filed, receives the documents that were missing, and reverses its own decision.

Fix the Record or Reapply?

Families sometimes assume the simplest response to a denial is a fresh application. Often that is a mistake. An appeal preserves the original application date, and the application date controls when eligibility, and payment, can begin. A new application starts the clock over and can forfeit months of coverage the facility will still bill the family for. Appealing and delivering the missing verification is usually the better path for a verification denial.

Reapplying makes sense in a narrower set of cases: when the denial was correct on the facts as they stood, and the facts have since changed. An applicant who was genuinely over the resource limit and has now spent down, or whose penalty period has run, may be better served by a new application than by appealing a decision DHS got right. The two paths are not exclusive; you can appeal a denial and file a new application at the same time to protect both positions. Which combination fits depends on the numbers in your file, and this is exactly the decision worth an hour of an elder law attorney's time before the 30 days run out.

Undue Hardship Waivers

Federal law requires a safety valve for transfer penalties. Under 42 U.S.C. § 1396p(c)(2)(D), a penalty is not imposed where the state determines it would work an undue hardship on the applicant. The typical hardship case involves money that is truly gone, given to someone who has spent it and cannot return it, leaving the applicant with no way to pay for care during the penalty period. The nursing facility itself may file the hardship application on a resident's behalf with the resident's consent. Hardship waivers are decided case by case on the applicant's specific circumstances; DHS decides each request, and no outcome can be assumed. A hardship request and a fair hearing appeal can proceed on parallel tracks, and the denial of a hardship request carries its own appeal rights.

Retroactive Coverage

Medicaid can reach backward. Under 42 C.F.R. § 435.915, coverage can extend to the third month before the month of application for periods when the applicant received covered services and would have been eligible had an application been filed. For a nursing home resident, that can mean three months of facility bills, often well over $30,000 at Pennsylvania rates, covered rather than owed. This is one more reason the original application date is worth defending on appeal instead of surrendering through a reapplication, and it is worth confirming that the County Assistance Office actually evaluated the retroactive months when it processed the application. Our page on the cost of long-term care in Pennsylvania shows what those months represent in dollars.

After the Decision

The Administrative Law Judge issues a written adjudication with findings of fact and a ruling, subject to review by the Bureau's director. A party who loses can seek reconsideration from the Secretary of Human Services within 15 calendar days or petition the Commonwealth Court of Pennsylvania within 30 days. If the appeal succeeds, DHS pays the benefits that should have been granted, retroactive to the correct eligibility date. Winning eligibility also starts a different clock worth knowing about now: Medical Assistance paid for long-term care becomes a claim against the recipient's estate after death, which is covered on our estate recovery page.

If a denial notice is sitting on your kitchen table, count the days first and call second. We can review the notice, tell you which kind of denial you have, and move quickly on the appeal while time remains. Call 215-949-0888 .

Legal and factual content on this page was last verified: Aug. 2026. If you are reading this significantly after that date, confirm key provisions with current statute text or contact our office.