Tennessee Medicaid Nursing Home: TennCare CHOICES Group 1

When a parent's hospitalization ends in a nursing home admission, the question that lands within forty-eight hours is the same in every Tennessee family: who is going to pay for this? In 2026 a private-pay room in a Tennessee nursing facility runs roughly $9,700 to $10,500 a month. Long-term care insurance is rare. Medicare covers up to one hundred days of post-hospital skilled care under specific conditions and then it stops. What's left is TennCare CHOICES Group 1, Tennessee's Medicaid pathway for nursing facility coverage.

This guide is for the family in that moment. It walks through who qualifies clinically and financially, how Tennessee's income-cap-with-Qualified-Income-Trust framework actually works, what happens to the family home during life and at death, how patient liability is calculated, and how to get a parent enrolled. Tennessee's rules are different in important ways from the spend-down framework most online guides describe, and the article calls those differences out where they matter.

By Brevy Care Team · Last verified May 2, 2026

Why Group 1 Is the Right Door

CHOICES is TennCare's umbrella for long-term services and supports for adults age 65+ and adults 21+ with physical disabilities. It has three groups, each pointing to a different setting:

• Group 1, nursing facility care. Entitled. No waitlist.
• Group 2, home and community-based services as an alternative to a nursing facility. Capped, with periodic waitlists.
• Group 3, a smaller HCBS package for people at risk of nursing facility placement. Capped.

If your parent has been admitted to a nursing facility, or a hospital discharge planner has told you a nursing facility admission is the only safe destination, Group 1 is the door. CHOICES Group 1 is paid through one of three TennCare managed care organizations (BlueCare, UnitedHealthcare Community Plan, or Wellpoint, formerly Amerigroup). The MCO assigns a Care Coordinator who oversees the member's level-of-care reviews and coordinates with the facility.

A few points to clarify up front:

• Nursing facility care is full-benefit Medicaid. Once enrolled in Group 1, your parent has all the same TennCare benefits anyone else does, primary care, prescriptions, hospital coverage, plus the room, board, nursing, and rehabilitation services bundled into the facility's daily rate.
• TennCare is a §1115 demonstration, authorized under TennCare III and approved by CMS through December 31, 2030. The CHOICES program operates inside that demonstration. You'll see Tennessee materials use the word "waiver" colloquially, but the underlying authority is §1115, not §1915(c).
• Group 1 is not a waitlist program. This is the most common misconception. Group 2 has periodic waitlists. Group 1 does not. If your parent meets the clinical and financial criteria, the only delay is paperwork.

Clinical Eligibility: The PAE Acuity Scale

Tennessee uses a single instrument to determine whether someone medically qualifies for nursing facility care: the Pre-Admission Evaluation (PAE), which applies the TennCare Nursing Facility Level-of-Care Acuity Scale. The scale runs from 0 to 26 points, 21 from activities of daily living and behavior, 5 from skilled services. Nine points is the qualifying threshold.

Here's how points accrue across the most common categories:

Most older adults entering a nursing facility from a hospital admission score well above 9. The PAE must be submitted by a physician, nurse practitioner, clinical nurse specialist, or physician assistant, almost always the hospitalist or the facility medical director. The Bureau of TennCare Long Term Services and Supports must receive an approvable PAE within 10 calendar days of either the PAE Request Date or the physician certification date, whichever is earlier.

If your parent scores 5 to 8 points but a physician believes they're at imminent risk of nursing facility placement, the family can request a Safety Determination for Group 2 enrollment instead. That's the HCBS path. For straight nursing facility coverage, the score has to clear 9.

A note on terminology: TennCare does not use a "CARES" assessment, that's Florida's tool. Tennessee's instrument is the PAE plus the Acuity Scale. Skip any out-of-state Medicaid planning materials that reference CARES; they don't apply here.

Financial Eligibility: 2026 Dollar Figures

TennCare CHOICES financial eligibility for 2026 (effective for applications dated July 1, 2025 through June 30, 2026 for the spousal protections, and calendar 2026 for the federal SSI-indexed limits) uses these thresholds:

These figures come directly from TennCare's CHOICES guidance and the January 1, 2026 cost-neutrality memo.

The Income Cap and the Qualified Income Trust

This is where Tennessee diverges sharply from states like Michigan or Pennsylvania. Tennessee has no medically needy program for adults. If your parent's gross monthly income is even one dollar above $2,982, they cannot qualify for CHOICES on income alone, and they cannot "spend down" the excess on medical bills the way a Michigan applicant can. The pathway forward is a Qualified Income Trust (QIT).

A QIT, also called a Miller Trust in other states, is an irrevocable trust into which the applicant deposits all of their income each month. Income flowing through the QIT does not count against the $2,982 cap. The trust then pays the Personal Needs Allowance, Medicare premiums, the MMNA to a community spouse, and the patient liability to the facility, in that order. Anything left at the end of the resident's life, usually nothing, passes to TennCare under the trust's payback provision.

A QIT is not a do-it-yourself instrument. It must be drafted to TennCare's specifications, funded properly each month, and reported on annual redeterminations. Tennessee elder-law attorneys typically charge a flat fee in the $1,500 to $3,500 range to draft and set up a QIT, and the cost is well-spent: a QIT done wrong delays Medicaid eligibility for months and the family is on the hook for private-pay rates in the meantime.

Asset Spend-Down (the Real Kind)

If your parent's countable assets exceed $2,000 (or $3,000 for a couple both applying), the family will need to reduce them before approval. Permissible spend-down uses include:

• Paying off the resident's or community spouse's debts (mortgage, credit cards, medical bills).
• Pre-paying funeral and burial expenses through an irrevocable funeral trust.
• Home repairs and modifications.
• Replacing a worn-out vehicle (one car is exempt regardless of value).
• Paying for medical care or services Medicaid will not cover.

Impermissible spend-down is anything that would be treated as an uncompensated transfer under the look-back rule. This includes gifts to family members, below-market sales of property, and undocumented loans without a written promissory note charging fair-market interest.

Asset spend-down is not the same as a medically needy spend-down. Spend-down here means converting countable assets into exempt assets or paying for legitimate expenses. It does not allow over-income applicants to qualify by spending the excess on medical bills.

The Look-Back, the Penalty Divisor, and Personal Services Contracts

Tennessee enforces the federal 60-month look-back on asset transfers preceding any TennCare CHOICES, ECF CHOICES, or institutional Medicaid application (42 USC § 1396p(c) as amended by DRA-2005; Tenn. Comp. R. & Regs. 1240-03-03-.03; TennCare ABD Manual § 125.010). Any uncompensated transfer made within those 60 months, gifts, below-market sales, payments to family members without a written caregiver agreement, is presumed to disqualify the applicant for a penalty period. Critical post-DRA-2005 rule: the penalty does NOT begin on the transfer date, it begins on the LATER of the transfer date or the date the applicant is otherwise eligible AND in a nursing facility AND would be receiving Medicaid but for the penalty.

The penalty period is calculated by dividing the total uncompensated transfer amount by Tennessee's transfer-penalty divisor, set by the TennCare ABD Eligibility Policy Manual based on the average daily private-pay nursing facility cost in Tennessee. For 2026, per Policy 125.010 (effective January 5, 2026), the divisor is $295.87 per day ($8,846.10 per month). Each $295.87 of unprotected transfer creates roughly one day of Medicaid ineligibility, and the penalty period runs from the date the applicant would otherwise have been eligible. (Note: this is a different number from the $294.87/day CHOICES cost-neutrality cap, which gates HCBS spending, not transfers.)

Two examples make the math concrete:

• A $30,000 birthday gift from your mother to a grandchild three years before her nursing home admission triggers a penalty of roughly 102 days ($30,000 ÷ $295.87 = 101.4 days). During those 102 days, your family is responsible for the private-pay nursing home bill, about $32,000.
• A $150,000 down-payment to a son disguised as a loan with no written promissory note four years before admission triggers roughly 507 days of ineligibility, about $162,000 in private-pay bills if the family cannot recover the asset.

Personal Services Contracts are the legitimate workaround. A written caregiver agreement between the care recipient and a non-spouse family caregiver, executed before services begin, with a documented fair-market hourly rate, hours, and duties, converts what would otherwise look like a disqualifying gift into a legitimate exchange of value. The rate must match what a commercial agency would charge for similar services in the local market. Spouses cannot be paid under a personal services contract for Medicaid look-back purposes; transfers between spouses are generally disregarded by Medicaid under §1917(d)(3)(A).

The penalty rule has narrow exemptions: transfers to a spouse, transfers to a blind or disabled child of any age, transfers to a sibling who has lived in the home for at least one year and has equity interest, and transfers to an adult child caregiver who has lived in the home for at least two years and provided care that prevented institutionalization (caregiver child exception under 42 USC § 1396p(c)(2)(B)(iv), requires physician attestation and contemporaneous caregiving documentation). These are the same exemptions that apply to estate recovery, see the Estate Recovery section below. For the complete framework, DRA-2005 SPIA six-requirement test, promissory note three-prong test, life estate 1-year residency rule, Modified Half-a-Loaf strategy, undue hardship waiver mechanics, Tennessee's lack of recognition for Lady Bird deeds, uncertain TOD deed status, three worked examples, and 15 common mistakes, see Tennessee's 5-Year Lookback and Penalty Divisor complete guide.

The Home: During Life and at Death

The home is usually a family's largest asset and the question every adult child asks first. Tennessee's rules during life and at death are different, and both matter.

During the resident's lifetime, the home is an exempt (not countable) asset under any of the following circumstances:

• The resident's spouse, minor child, or blind or disabled child of any age lives in the home.
• A sibling of the resident has equity interest in the home and has lived there for at least one year before the resident's institutionalization.
• An adult child of the resident has lived in the home for at least two years before institutionalization and provided care that allowed the resident to stay home rather than enter a facility.
• The resident has signed a statement of intent to return home, even if return is unlikely from a medical standpoint. The intent is what matters legally, not the prognosis.

The $752,000 home equity exclusion applies if none of the residency exemptions above are met. Equity above $752,000 disqualifies the resident unless a spouse, minor child, or disabled child resides in the home (in which case there is no equity cap). Tennessee uses the federal LTSS minimum and has not adopted a higher state cap.

Tennessee does NOT use TEFRA liens during the resident's lifetime. This is significant. Some states place a lien on the home when the recipient enters a nursing facility, securing the state's eventual recovery interest. Tennessee's State Plan Attachment 4.17-A is explicit: "Not applicable. Tennessee does not apply TEFRA liens." That means the home stays in the family's name during the resident's life, and a community spouse or qualifying relative can continue to live there without a state encumbrance on title.

What happens at death is a different question, addressed in the Estate Recovery section below. For families weighing what proactive home-protection planning is and isn't possible in Tennessee, Medicaid Asset Protection Trusts, tenancy by the entirety, the caretaker-child and sibling-with-equity transfer exceptions, and why Lady Bird and TOD deeds don't apply in Tennessee, see the How to Protect Your Home from Medicaid in Tennessee deep guide.

Patient Liability: the Math, Walked Through

Once your parent is approved and enrolled, the accountant question becomes: of the income coming in each month, how much do they keep, how much goes to the facility, and how much (if any) goes to a community spouse?

Tennessee's CHOICES Group 1 patient liability calculation works in a fixed sequence. Start with the resident's gross monthly income. Subtract, in order:

1. Personal Needs Allowance, $70/month, kept by the resident (see deep guide for Resident Trust Fund mechanics, sheltered workshop disregard, VA pension stacking, and TSVH override).
2. Medicare Part B premium and any supplemental insurance premium.
3. Minimum Monthly Maintenance Needs Allowance for the community spouse, if applicable. The MMNA shifts income from the institutionalized spouse to the community spouse to bring the community spouse's total income up to a floor between $2,643.75 and $4,066.50 per month (depending on documented shelter costs).
4. Family allowance for dependent children or parents living with the community spouse.
5. Court-ordered support obligations.

What's left after these deductions is the patient liability, the amount paid to the facility each month as the resident's contribution to their care. TennCare's MCO pays the difference between patient liability and the negotiated daily rate.

A quick worked example. A widow on Medicaid CHOICES Group 1 receives $1,950/month in Social Security and $850/month from a small pension, total gross income $2,800/month. She has no community spouse. Her Medicare Part B premium is $202.90/month (2026 standard). Her patient liability is:

• $2,800 gross income
• minus $70 PNA
• minus $202.90 Medicare Part B premium
• = $2,527.10 patient liability, paid to the facility each month.

She keeps $70 for personal needs (toiletries, haircuts, magazines), her health coverage continues through TennCare and Medicare, and the MCO covers the gap between her patient liability and the daily room-and-board rate.

A two-spouse example. A husband enters the nursing facility with $3,400/month in Social Security and pension income. His wife at home receives $1,100/month in Social Security and has documented shelter costs that put her MMNA at $3,200/month. Her income falls $2,100/month short of the MMNA floor. His patient liability is:

• $3,400 gross income
• minus $70 PNA
• minus $202.90 Medicare Part B premium
• minus $2,100 MMNA shifted to community spouse
• = $1,027.10 patient liability, paid to the facility each month.

The MMNA mechanic is what protects community spouses from impoverishment, and it's why the right spousal income calculation can be the single highest-dollar planning decision in the CHOICES application. Tennessee follows the federal Income-First rule mandated by DRA-2005 (42 USC § 1396r-5(d)(6)), meaning a community spouse cannot increase the CSRA to generate more income unless an income shift can't get them to the MMMNA floor first. For the full Tennessee spousal-protection playbook, Income-First, the SFA model under TennCare ABD Manual § 125.015, Hughes v. McCarthy 734 F.3d 473 (6th Cir. 2013), fair hearing process, and four worked examples, read Tennessee Spousal Impoverishment Rules: 2026 CSRA, MMMNA, and the Community Spouse Toolkit.

Tennessee follows the name-on-the-check rule: community spouse income is not counted toward the applicant's $2,982 income cap, though community spouse income may affect MMNA calculation if it falls below the floor. This is a meaningful protection that some out-of-state planning guides get wrong.

Tennessee Medicaid Nursing Home Costs in 2026

Three reasons cost matters even when Medicaid is the destination: (1) the family typically pays privately during the application processing window, (2) facilities ration Medicaid beds and may favor private-pay residents at admission, and (3) the patient liability calculation only makes sense in context of total facility cost.

In 2026, Tennessee private-pay nursing home rates run roughly $300 to $330 per day for a semi-private room and $320 to $380 per day for a private room, or about $9,700 to $10,500 per month. Statewide medians from SeniorLiving's February 2026 research: $9,681/month semi-private, $10,456/month private, both up about 4 percent from 2024.

How does TennCare's reimbursement rate compare? The 2026 average daily rate TennCare pays facilities is approximately $294.87/day. Private-pay rates run roughly 1.1 times to 1.3 times what TennCare reimburses, about $30 to $85 more per day, or $900 to $2,500 more per month. In practical terms, private-pay residents subsidize Medicaid residents in mixed-payer facilities, which is part of why some facilities cap or limit Medicaid admissions.

A few practical points families should know:

• Application processing typically takes 30 to 90 days from receipt of a complete application. During that window, the family is responsible for the private-pay rate. Many facilities will accept "Medicaid pending" status and not bill at the private-pay rate, but this varies by facility and is something to negotiate up front.
• Retroactive coverage is available for up to three months prior to the application month, provided the resident would have qualified during those months. This can significantly reduce the family's out-of-pocket exposure.
• A "Medicaid bed" is a misnomer. Almost all TN nursing facilities accept TennCare. What varies is the number of Medicaid beds a facility will hold open. Ask specifically how many Medicaid beds the facility currently has open and what the wait is for one if private-pay is your starting point.

Estate Recovery: What TennCare Can and Cannot Take

Estate recovery is the question every family asks about and most online guides handle badly. Here's the honest version for Tennessee.

Federal law (42 USC §1396p(b)) requires every state to recover the cost of long-term services and supports from the estates of Medicaid recipients who received LTSS at age 55 or older. Tennessee implements this requirement through Tenn. Code Ann. §71-5-116 and TennCare State Plan Attachment 4.17-A (latest amendment TN-24-0002, approved August 13, 2024, effective April 1, 2024).

The scope:

• Who's subject: Only deceased TennCare members who received CHOICES Group 1, 2, or 3 LTSS at age 55 or older. TN does not recover from non-LTSS Medicaid recipients. If a parent received only standard adult Medicaid and never used CHOICES, ECF CHOICES, or other LTSS, TennCare estate recovery does not apply.
• What's reachable: Tennessee is a probate-only recovery state. TennCare can recover only from assets that pass through probate. Payable-on-death accounts, jointly-held property with right of survivorship, and life estates that pass automatically by deed are exempt. Whether TennCare can reach revocable/living trust assets is contested, conservative practice treats probate-only as the rule and consults an elder-law attorney for trust-specific planning.
• No TEFRA liens during life. As noted above, TennCare does not place liens on the home while the recipient is alive. Estate recovery happens, if at all, after death and only against the probate estate.
• Probate priority: Per T.C.A. §30-2-317, the TennCare claim has third priority, behind only administrative costs and funeral expenses, ahead of all general creditor claims.

Mandatory exemptions (recovery is automatically waived):

• Surviving spouse of any age.
• Surviving child under 21.
• Surviving child who is blind or permanently disabled of any age.

Undue hardship waivers for adult-child and sibling caregivers (per SPA 4.17-A item 4):

• Sibling caregiver: Lawfully resided in the member's home for at least one year immediately before the member's institutionalization, provided care during that year that allowed the member to stay home rather than be institutionalized, and has lived in the home continuously since admission.
• Adult child caregiver: Lawfully resided in the member's home for at least two years immediately before institutionalization, provided care during those two years that prevented institutionalization, and has lived in the home continuously since admission.
• Sole income-producing asset: Family farm or family business that is the sole income source for survivors, full waiver, no value cap.

Cost-effectiveness threshold: TennCare automatically releases claims of $10,000 or less under SPA 4.17-A item 6. The state also waives recovery when the cost of recovery plus higher-priority claims (administrative, funeral) would exceed or nearly exceed the estate's value.

The process at death: A Request for Release (RFR) form is sent to the member's last known address after death and is also available at every county probate court clerk and on the TennCare website. The family or estate executor returns the form; TennCare responds with either a release or an itemized claim. Hardship waivers are requested through the same form. If denied, the family may petition Probate Court under T.C.A. §71-5-116 for an order to waive or defer recovery in whole or part.

TennCare Estate Recovery contact:

• Mailing: Division of TennCare, RFR Processing Unit, 310 Great Circle Road, 3rd Floor, Nashville, TN 37243
• Phone: 866-389-8444
• Fax: 615-413-1941
• Email: Tenn.Care@tn.gov

A note on planning: experienced Tennessee elder-law attorneys can structure pre-application transfers within the look-back window legally, and certain instruments (irrevocable life-estate deeds, properly drafted trusts) can move assets out of the probate estate before death. None of this is a guarantee, and aggressive planning that fails risks a much larger problem, a denial, a penalty period, and a private-pay bill the family did not budget for. The honest planning conversation acknowledges that estate recovery is real, that the mandatory exemptions cover most surviving-spouse and dependent-child situations, and that the $10,000 threshold combined with probate-only scope means most modest-estate families face limited or no recovery exposure.

Choosing a Tennessee Nursing Facility

If your parent's clinical and financial picture is settled, the next decision is which facility. Three free public tools should drive that choice.

1. CMS Care Compare Five-Star Rating. Every Medicare- or Medicaid-certified nursing facility in the country is rated on a five-star scale, with separate stars for health inspections, staffing, and quality measures. Five-star facilities are the top 10 percent statewide. One-star facilities are the bottom 20 percent. Search by ZIP code at medicare.gov/care-compare. The same site lists CMS's Special Focus Facilities, typically 5 to 10 Tennessee nursing homes at any time that have demonstrated a pattern of serious quality failures and are subject to enhanced inspections.

2. Tennessee Health Facilities Commission inspection reports. The state agency that licenses and inspects nursing homes posts the most recent annual survey results and any complaint investigations. Look for substantiated complaints, deficiency citations, and the facility's response to corrective-action plans.

3. The Long-Term Care Ombudsman for the region. Each of the nine Area Agencies on Aging and Disability houses an Ombudsman office. Call before admission and ask whether they have any current concerns about a specific facility, they often have an unfiltered ground-truth view that survey results don't capture.

A few practical questions to ask any facility you're considering:

• How many Medicaid beds do you currently have open?
• What is your CMS Five-Star rating today, and have you had any deficiencies in the past 12 months?
• What is your nurse-to-resident ratio on day shift, evening shift, and overnight? (Federal staffing standards rolled out in 2024 set minimums; ask whether the facility meets or exceeds them.)
• Do you have a memory care unit, and what is the staff training requirement for dementia care?
• What is your policy on "Medicaid pending" admissions, and will you bill the family at the private-pay rate during the application period?

The Long-Term Care Ombudsman Program

Once your parent is admitted, the Long-Term Care Ombudsman is the family's free advocate inside the facility. The program is authorized under the federal Older Americans Act §711–712 and Tenn. Code Ann. §71-2-109, and is administered by the Tennessee Department of Disability and Aging, programmatically independent but housed at DDA.

What an Ombudsman does:

• Identifies, investigates, and resolves complaints made by or on behalf of long-term care residents.
• Provides information about LTSS, residents' rights, and facility selection.
• Advocates before government agencies for residents' interests.
• Supports resident and family councils.
• All services are free and confidential.

What an Ombudsman does NOT do:

• Cannot regulate facilities or order them to take action, that's the Tennessee Health Facilities Commission's job.
• Cannot serve as legal counsel.

Statewide complaint line: 877-236-0013. State Long-Term Care Ombudsman: Teresa Teeple, 615-253-5412, teresa.teeple@tn.gov.

The program covers approximately 700 facilities and 60,000 licensed beds across nursing homes, assisted care living facilities, residential homes for the aged, traumatic brain injury homes, and adult care homes. In FFY 2023 (the most recent published annual report), the program handled 4,582 complaints, a record high, across roughly 17.5 full-time-equivalent district ombudsmen statewide, well below the IOM-recommended 30 FTE for a state Tennessee's size. The program's chronic underfunding (TN is the only state in its region without dedicated state appropriations for LTC ombudsman work) means individual ombudsmen carry heavy caseloads. Calling early, at admission, not after a problem develops, gets you on a relationship before the office is at capacity.

How to Apply for Tennessee Medicaid Nursing Home Coverage

Tennessee CHOICES Group 1 admissions almost always run through one of two paths:

Path 1: Hospital discharge. When a parent is being discharged from a hospital to a nursing facility, the hospital's discharge planner and the receiving facility's admissions coordinator handle the bulk of the paperwork. The hospitalist or facility medical director submits the PAE. The family submits the financial application through TennCare Connect (online at tenncareconnect.tn.gov, by phone at 1-855-259-0701, by paper, or in person).

Path 2: Direct admission from home. Less common. The family contacts the facility, the facility's admissions team requests the PAE from the resident's primary care physician, and the family files the financial application through TennCare Connect.

Either way, the practical sequence is:

1. Get the PAE submitted. This is the clinical step. Request it from the discharging hospitalist or the facility medical director. The PAE must be submitted within 10 calendar days of either the request date or the physician certification date, whichever is earlier.
2. File the financial application through TennCare Connect. Online is fastest. Have ready: Social Security cards, dates of birth, marriage certificates, current bank statements (most TN advisors recommend 60 months for CHOICES applications), proof of income (Social Security and pension award letters, recent statements), Medicare card, supplemental insurance information, deed and tax assessment for any real property, vehicle registration, and life insurance policies.
3. Establish the QIT if your parent's gross income exceeds $2,982/month. Work with a Tennessee elder-law attorney; do not draft a QIT from an internet template.
4. Coordinate with the assigned MCO. Once enrolled, your parent will be assigned to BlueCare, UnitedHealthcare Community Plan, or Wellpoint. The MCO assigns a Care Coordinator who manages annual level-of-care reviews and coordinates with the facility.
5. Watch for ex parte renewal. TennCare attempts an automatic renewal each year using federal data sources (SSA, IRS, state wage records). If the system can verify continued eligibility, no family action is needed. If not, you'll receive a renewal packet that must be returned within 40 days, with a 20-day supplement window. Missing the renewal triggers a termination that can take 90 days to reverse through the Reconsideration process.

The federal decision timelines under 42 CFR 435.912 are 45 days for non-disability cases and 90 days for disability/CHOICES cases. In practice, well-prepared CHOICES applications are often decided faster; incomplete applications drag past the 90-day mark. Retroactive coverage is available for up to three months before the application month if the applicant would have qualified during those months.

Worked Example: A Tennessee Widow with Income, Assets, and a Home

To bring all of this together: imagine a 78-year-old widow in Knoxville. She has $3,200/month in Social Security and a small pension. She has $45,000 in a savings account, no debt, and a paid-off house valued at $220,000. Her daughter lives nearby but does not live with her. After a stroke and a hospitalization in February, she's being discharged to a Knoxville nursing facility on a CHOICES Group 1 application.

Clinical eligibility: Her PAE Acuity score after the stroke is 14 (needs help with eating, transfers, toileting, plus skilled wound care). Well above the 9-point threshold. Cleared.

Income: $3,200/month is above the $2,982 cap. She needs a QIT. Her daughter retains a Knoxville elder-law attorney for a $2,500 flat fee. The QIT is drafted, funded with her full $3,200 monthly income, and reported on her TennCare Connect application.

Assets: $45,000 savings exceeds the $2,000 cap by $43,000. The family uses permissible spend-down: $7,500 toward a pre-paid funeral trust, $4,000 for outstanding home repairs (roof, HVAC tune-up, two ADA bathroom modifications), $5,500 to pay off her credit card and a small unpaid medical bill, and $24,000 placed into an irrevocable funeral trust for the daughter's eventual funeral expenses. Remaining countable assets: $2,000. Cleared.

Home: Worth $220,000, paid off. Equity is well below the $752,000 exclusion. No spouse or qualifying relative lives in the home, but she signs a statement of intent to return. The home remains exempt during her lifetime. Cleared.

Patient liability calculation:

• $3,200 gross income (now flowing through QIT)
• minus $70 PNA
• minus $202.90 Medicare Part B premium
• = $2,927.10 patient liability to the facility each month.

The MCO covers the gap between her patient liability and the negotiated daily rate (roughly $309/day in Knoxville × 30.4 days = $9,394/month total cost; her contribution is $2,927, the MCO covers $6,467).

Estate recovery exposure: She received CHOICES Group 1 LTSS at age 78. After her death, TennCare can pursue recovery from her probate estate. The home, if it passes through probate, is reachable. If she titles the home into a life-estate deed before her death (with the daughter as remainder beneficiary), the home passes outside probate and is not reachable by TennCare. This is a planning conversation worth having with her elder-law attorney before she enters the facility, not after her death.

Common Misconceptions

• "My parent will be on a waitlist for nursing home Medicaid in Tennessee." Group 1 is entitled. There's no waitlist for nursing facility care. Group 2 (HCBS at home) is the program with periodic waitlists.
• "Tennessee requires a spend-down on monthly income." No. Tennessee uses a Qualified Income Trust for over-income applicants. There is no medically needy spend-down for adults. Spend-down in TN refers only to reducing countable assets, not redirecting excess income.
• "The state will take the house immediately when my parent enters a nursing home." No. Tennessee does not use TEFRA liens. The home remains in the family's name during the resident's life. Estate recovery, if any, happens after death and only against probate assets.
• "If we transfer the house to me now, we can avoid Medicaid recovery." Maybe, but the transfer is subject to the 60-month look-back. A $220,000 transfer creates roughly 744 days (over two years) of Medicaid ineligibility under the $295.87/day penalty divisor. Most planning instruments work before the look-back window, not in it.
• "TennCare estate recovery applies to all Medicaid recipients." No. Estate recovery applies only to deceased members 55 or older who received LTSS (CHOICES, ECF CHOICES, or short-term LTSS). Standard Medicaid coverage alone does not trigger estate recovery in Tennessee.
• "The Long-Term Care Ombudsman can force the facility to discharge or transfer my parent." No. The Ombudsman advocates and investigates but cannot regulate facilities. Regulatory authority sits with the Tennessee Health Facilities Commission.

What to Read Next

• Tennessee Medicaid Programs Overview, the master hub explaining how CHOICES, ECF CHOICES, Katie Beckett, standard ABD, and MSPs fit together.
• Tennessee Medicare Savings Programs (QMB / SLMB / QI), for dual-eligible nursing facility residents who need both their CHOICES Group 1 LTSS benefit and Medicare premium-and-cost-sharing assistance (QMB-Plus / SLMB-Plus full-benefit dual eligibility).
• How to Apply for TennCare, the four application channels, document checklist, and ex parte renewal mechanics.
• How to Get Paid as a Family Caregiver in Tennessee, for families considering the home-care path under CHOICES Group 2 instead of nursing facility care.
• Respite Care in Tennessee, for family caregivers who are providing care now and need short-term relief.
• Qualified Income Trust (Miller Trust), Glossary, the technical primer.
• Nursing Facility Level of Care (NFLOC), Glossary, federal definition and how Tennessee's PAE compares.
• Tennessee PACE Program, for Hamilton County families looking for a structured alternative to nursing facility placement; PACE delivers integrated Medicare + Medicaid, an 11-discipline interdisciplinary team, and the full LTSS benefit package without an enrollment waitlist. Tennessee's only PACE site is Ascension Living Alexian PACE in Chattanooga; outside Hamilton County, NF and CHOICES Group 2 remain the primary pathways.

Find personalized help mapping a Tennessee Medicaid nursing home application at brevy.com.

This guide reflects TennCare CHOICES rules in effect as of May 2026. Income and asset thresholds, the transfer-penalty divisor, and Medicare premium amounts change annually. Estate recovery rules are governed by the State Plan Amendment in effect at the time of recovery. For decisions involving a specific family member, consult a Tennessee-licensed elder-law attorney or contact the Bureau of TennCare Long Term Services and Supports.