Receiving a Medicaid denial letter from the Michigan Department of Health and Human Services (MDHHS) is frightening — especially when a family member is already in a nursing home or facing an immediate care need. But a denial is a legal determination, not a final answer. You have the right to challenge it, and many denials are reversed on appeal.
Understanding why applications get denied is the first step. MDHHS denies Michigan Medicaid applications for a range of reasons — some straightforward, others complex — and the appeal strategy depends entirely on which applies to your situation.
Common Reasons Michigan Denies Medicaid Applications
The most frequent reasons MDHHS denies long-term care Medicaid applications include:
- Assets over the limit. Michigan requires applicants to have $2,000 or less in countable assets (for single individuals) at the time of application. If MDHHS counts assets you believe are exempt — or miscalculates what you own — you may be denied incorrectly.
- Look-back violations. Michigan Medicaid reviews five years of financial history before your application date. Transfers of assets for less than fair market value during that window can result in a penalty period — a period of ineligibility calculated based on the amount transferred. Not all transfers trigger penalties, and some are exempt under Michigan law.
- Incomplete or missing documentation. MDHHS requires extensive documentation of assets, income, and financial history. Missing a bank statement, failing to document a transaction, or missing a response deadline can result in denial even when you would otherwise qualify.
- Income over the limit. Michigan uses an income cap for certain Medicaid programs. If your income exceeds the threshold, a Miller Trust (Qualified Income Trust) may be required — but if no one set one up, MDHHS will deny the application.
- Failure to verify residency or identity. Documentation issues around citizenship, Michigan residency, or identity can cause denials that have nothing to do with financial eligibility.
Your Right to a Fair Hearing
When MDHHS denies or reduces a Medicaid benefit, Michigan law gives you the right to request a Fair Hearing — a formal administrative proceeding before a Michigan Administrative Law Judge (ALJ). The Fair Hearing is your opportunity to present evidence, challenge MDHHS's determination, and have an independent reviewer decide whether the agency got it right.
You have the right to be represented by an attorney at your Fair Hearing. Having legal representation matters: the rules of evidence apply, MDHHS will have its own caseworkers presenting their position, and the outcome depends heavily on how your case is built and presented. Families who go into Fair Hearings without an attorney are at a significant disadvantage.
If your appeal is successful, benefits can be backdated to the date your application was originally approved — meaning the nursing facility gets paid for the period MDHHS previously refused to cover.
How the Michigan Medicaid Fair Hearing Process Works
After you request a Fair Hearing, MDHHS schedules a hearing — typically by phone, though in-person hearings can be requested. The ALJ reviews the case record, hears testimony, and evaluates evidence submitted by both sides. Hearings are generally scheduled within 90 days of the request.
Before the hearing, your attorney will review the case record, identify the specific grounds for MDHHS's denial, gather supporting documentation, and prepare a written argument. In many cases, new or corrected documentation submitted before the hearing resolves the dispute without going to a full hearing — MDHHS will often reconsider a denial when an attorney provides documentation that was missing or disputed in the original application.
If the ALJ rules in your favor, MDHHS must comply with the decision. If MDHHS rules against you, you have the right to further appeal to the Michigan Circuit Court.
Critical Deadlines You Cannot Miss
Michigan Medicaid appeals are strictly time-limited. Missing a deadline forfeits your right to appeal.
- 90 days to request a Fair Hearing. You must request your Fair Hearing within 90 days of the date on your denial notice. This deadline is firm. If you miss it, you lose the right to appeal that determination and must reapply.
- 10 days to request benefit continuation. If you are already receiving Medicaid benefits and MDHHS is reducing or terminating them, you have 10 days from the notice date to request a Fair Hearing and keep your benefits in place while the appeal is pending. After 10 days, benefits stop even if you appeal.
If you received a denial notice and are approaching either deadline, contact an attorney immediately. The clock does not stop while you gather documents or seek a second opinion.
Challenging Look-Back Penalties
Look-back penalty challenges are among the most complex Medicaid appeals — and among the most consequential. If MDHHS imposes a penalty period based on asset transfers within the five-year look-back window, the penalty can run for months or years, leaving a nursing home without payment and a family facing enormous out-of-pocket bills during that period.
Not every transfer triggers a penalty. Michigan Medicaid law recognizes a number of exempt transfers, including transfers to a spouse, transfers to a disabled child, transfers of a home to a caretaker child who lived in and maintained the home for at least two years before the applicant's institutionalization, and certain transfers into special needs trusts. If MDHHS imposed a penalty on a transfer that qualifies for an exemption, that penalty can be challenged.
Penalties can also be challenged on calculation grounds — MDHHS uses a divisor (the average monthly cost of nursing home care in Michigan) to calculate the penalty period, and errors in that calculation do occur. An attorney reviewing the denial can identify whether the penalty period was correctly computed.
Finally, Michigan allows for "hardship waivers" in limited circumstances — where a penalty period would deprive an applicant of medical care or food and shelter. These are difficult to obtain but worth evaluating when the facts support them.
How Rutkowski Law Firm Handles Medicaid Appeals
When a client comes to us after a denial, we start by reviewing the denial notice and the case record. MDHHS is required to explain the basis for its denial, and that explanation tells us where to focus. We then pull the full application history, gather any missing documentation, and evaluate whether the denial was correct or challengeable.
In many cases, the fastest path to benefits is not a formal Fair Hearing but a well-documented reconsideration request — submitting corrected or additional documentation that directly addresses the denial reason. We pursue that route first when the facts support it, because it resolves faster and avoids the hearing schedule.
When a hearing is necessary, we prepare the full case: written brief, documentary evidence, witness preparation, and representation at the hearing itself. We handle all communication with MDHHS and the hearing office so the family can focus on what matters.
We also work upstream — if a denial was caused by an asset structure or transfer that could have been handled differently, we address that at the same time so the reapplication, if needed, is clean.
