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My Dad's about to apply for Medicaid. Is an appraisal sufficient to prove the purchase/transfer was made at fair market value?

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An appraisal at fair market value by a licensed appraiser should satisfy Medicaid. Start by looking at the most recent assessment by your municipality. If the assessment was done this year, that should be good enough.
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Assessed value isn't the same as market value... but it can give you a ballpark idea. A friend of mine's house was assessed in 2014 at $635,000 and it recently sold and appraised at $825,000. A lot depends on the local market and the inventory. Too much inventory and the house could sell for below assessed value... too little inventory will bump up prices, causing a bidding war.

As for Medicaid, I wonder if Medicaid would question the selling of the house so close to one applying for same. I would research that out and gather all the information that you can.
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Medicaid would require him to spend it down, but with the help of a good elder attorney, the seller could probably hold a mortgage and just receive a small monthly payment.
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Really speak with an elder attorney before doing this. The proceeds from the sale will all be verifiable assets that have to be spent -down before he will ever qualify for Medicaid. Unless dad can wait to need a NH sometime after December, 2019 & that is a really really long long time.

He cannot sell /gift / transfer to you today and apply for medicaid tomorrow & be accepted for Medicaid the day after. There will be a spend-down based on the FMV sale amount. Dad will just have too many a$$ets to qualify for Medicaid. All real property sales are recorded at the local level by the tax assessors & then dovetailed to state records. So the sale or transfer or gifting will show up & to the penny.

Medicaid is run by each state uniquely so what your state pays for its Medicaid day rate will be different than the state next door. Like for TX an 100K house sale should pay for about 675 days of NH room & board as TX r&b is about $ 148.00 a day. how best to spend the $ from the sale is where the attorney & a elder financial planner can be valuable.
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Purchasing your father's home as a Medicaid planning strategy will only make sense if you have a plan to dispose of the proceeds he will receive in a manner that will not cause an eligibility penalty.

The home is an exempt asset for Medicaid eligibility purposes if it is the homestead property of the applicant. It also remain as an exempt asset if it is rented and the net income goes to his cost of care (Caution: in either scenario the house may be subject to Medicaid Estate Recovery at his demise).

Purchasing the home from him will cause him to own an countable asset (cash).

What is your goal? Do you want to keep the house? Do you want cash to take care of his needs beyond those provided for by Medicaid?

Think carefully about the desired outcome and then seek professional help. Unguided, you are treading in dangerous territory and the financial consequences could be dire.
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