I don't practice in TN and can't advise you as to specific TN law. That being said the general rules under Medicaid provide that no penalty is assessed for transfers that were not made for the purpose of qualifying for Medicaid and that benefits will not be denied if it would cause substantial hardship. Speak to a local elder law attorney quickly. You will want to have them pursue both informal and formal appeal of that denial /penalty period imposition decision. Your time to appeal may be limited. Act immediately..
I hope this has been helpful for you and yours.
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This is truly a specialized area of law. You will want to meet with an elder law attorney in your state. Best of luck.
This answer does not form an attorney-client relationship, and is not legal advice. Only an attorney that has agreed to represent you may give you advice specific to your situation.
In addition, you may want to contact the TN Medicaid association and see if you can appeal the decision. It is also recommended that you consult with an attorney experienced in this area.
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