WSR 98-03-085

PROPOSED RULES

DEPARTMENT OF

SOCIAL AND HEALTH SERVICES

(Medical Assistance Administration)

(Aging and Adult Services Administration)

[Filed January 21, 1998, 11:32 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 96-11-105.

Title of Rule: WAC 388-513-1380 and new chapter 388-79 WAC, Guardianship fees for clients of the department.

Purpose: Rules will implement RCW 43.20B.460, 11.92.180, and Section 1924 (42 U.S.C. 1396r-5).

Statutory Authority for Adoption: RCW 74.04.050, 74.04.057, 74.08.090, 74.09.500, 43.20B.460, and 11.92.180.

Statute Being Implemented: Section 1924 (42 U.S.C. 1396r-5), RCW 43.20B.460 and 11.92.180.

Summary: The rules set the amount of fees allowable for a guardianship to charge department clients. Because there are programs other than the nursing home or institutional program affected, a new chapter 388-79 WAC is created to be used as a reference by each program. Adopts federal standard for community spouse needs allowance. All other changes are to improve readability and do not change intent of policy.

Reasons Supporting Proposal: Implements federal regulation and state legislation. The aforementioned RCWs require the Department of Social and Health Services to make this rule.

Name of Agency Personnel Responsible for Drafting and Implementation: E. A. (Hank) Hibbard, Aging and Adult Services Administration Headquarters, Lacey, (360) 493-2543; and Enforcement: To the extent this will be enforced it will be enforced by the financial section in local HCS offices.

Name of Proponent: Department of Social and Health Services, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: WAC 388-513-1380 is amended and chapter 388-79 WAC is added to set a reasonable fee for guardians of department clients. This will comply with the directive of the legislature to do this. It is anticipated that this will allow the present system of central review to devolve upon the local offices, and save money.

They set amounts that the court can order for guardianship fees for clients of the department. These rules will also satisfy the Health Care Financing Authority (HCFA) and remove the state from the compliance list.

Proposal Changes the Following Existing Rules: See above.

A small business economic impact statement has been prepared under chapter 19.85 RCW.

Subject: Deduction of guardianship and associated attorney fees from income prior to participation.

Background: The rule will be effective in 1998, but the total impact will be phased in over three years as guardianship orders are renewed.

The Medical Assistance Administration (MAA) and Aging and Adult Services (AASA) of the Department of Social and Health Services (DSHS) are proposing new rules related to guardianship fees and costs and related attorney fees for certain DSHS clients who are subjects of guardianships. The rules are proposed under the authority of RCW 11.92.180 and 43.20B.460, and to comply with federal Medicaid program requirements.

This statement has been prepared for consideration with the notice of proposed rule making under the Administrative Procedure Act, chapter 34.05 RCW, and is intended to comply with the Regulatory Fairness Act, chapter 19.85 RCW.

Summary of Rules Change: The proposed rule creates chapter 388-79 WAC, amends WAC 388-513-1308 and other sections to make reference to chapter 388-79 WAC or WAC 388-513-1308. The rule sets allowable fees. It would allow fees for establishing guardianships and for annual reports.

Presently fees are allowed as a deduction from participation as an exception to policy. These rules would make that process unnecessary.

Affected Businesses: The standard industrial codes for affected businesses are:

8111 Legal Services

8399 Social Services, unclassified (guardians)

Costs of Compliance: Potential costs to the affected businesses will be in the form of reduced revenue resulting from control of the fees allowed. The fee restrictions apply only to those fees charged to a person who has been determined eligible as a client of the Department of Social and Health Services; who is residing in a nursing facility or in a residential or home setting and who is required to contribute toward their cost of care. This proposed rule does not regulate or limit the fees charged by guardians or the related attorneys fees for a person who is not a Department of Social and Health Services client.

The proposed amendments do not impose additional reporting, recordkeeping or any other compliance requirements. There will be few if any costs of compliance with the new law and rules. Costs presently incurred by guardians may be reduced as follows:

The rule will allow the guardian to deal with only the local Department of Social and Health Services office, and the clients contribution towards the cost of care will be figured from the court order rather than by an exception to policy. This should speed turnaround time, and decrease the problem of having every case decided at the Department of Social and Health Services headquarters level;

There should be no increased costs of equipment, supplies, or labor, and the costs per employee should be stable or go down.

Real Impact: Based on figures developed from past exceptions to policy requesting deduction of fees from participation, the department estimates a potential loss of revenue to the industry. This loss may increase each year for three years and then stabilize.

The Department of Social and Health Services has been told in discussions and meetings that all of the guardianship firms have some Department of Social and Health Services cases. Some firms have as many as seventy to eighty percent of their clients receiving Department of Social and Health Services services.

The department has included the impacted small businesses in the review of these rule amendments and notification of the public hearing. The impacted providers have been given an opportunity to examine options and make recommendations to the department concerning delivery of services to this client population. The Department of Social and Health Services has received comments from Washington State Association of Professional Guardians. Department personnel have held discussions with several individual guardians.

These discussions with members of the guardianship industry indicate that there is a widespread feeling that a fee of $80 per month as initially proposed is too low. The industry points out that many other states allow from $125 to $150 per month as a presumptive fee.

Reviewing the material developed the rates unit of AASA had determined that a fee of $175 per month should be adequate to attract vendors to the Medicaid market.

The Department of Social and Health Services has raised the maximum basic fee to $175 per month in the proposed rule ($2,100 per year) to be closer to the present cost structure and less harmful to those small businesses that rely on the Department of Social and Health Services clients for a majority of their business. The savings from new cases would meet the budget goals. Existing cases will come up for review over the next three to four years and the savings should grow as fees are set within the new standards.

Mitigation Factors: There should be faster cash flow to the guardians because court orders will not have to be sent to the Department of Social and Health Services headquarters for review. There should be more certainty as to expectations of both the department and the providers. Little can be done to mitigate the loss of revenue; except raise the allowed fee, which has been done. Providers have had time to adapt, since the legislation was enacted in 1994, find new sources of revenue, and the total effect of the rule will not be felt for three years.

Increasing the proposed maximum fees to $175 per month from earlier proposals of $80 and $90 (not including related attorney fees) will help mitigate the impact.

Conclusion: The department must implement RCW 11.92.180 and 43.20B.460. These amendments will have an economic impact on the listed businesses in the form of reduced revenue. The department has undertaken to mitigate the impact as stated above. Any changes or alternatives to the rule amendments in an attempt to further reduce the economic impact upon businesses would not result in meeting the necessary budget reductions imposed by the legislature.

Funding for guardianships as a deduction from the Department of Social and Health Services clients contribution towards the costs of care is decreased in the present biennial state budget.

A copy of the statement may be obtained by writing to E. A. (Hank) Hibbard, Aging and Adult Services Administration, P.O. Box 45600, Olympia, WA 98504-5600, phone (360) 493-2543, or FAX (360) 438-8633, attention E. A. (Hank) Hibbard.

RCW 34.05.328 does not apply to this rule adoption. Rules establish a payment rate and is not solely a condition of eligibility. Because the compensation level and not the right to receive services is impacted the statute applies. A cost benefit analysis may be obtained by contacting Hank Hibbard at the above address.

Hearing Location: Lacey Government Center (behind Tokyo Bento Restaurant), 1009 College Street S.E., Room 104-B, Lacey, WA 98503, on February 24, 1998, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Paige Wall by February 13, 1998, phone (360) 902-7540, TTY (360) 902-8324, e-mail pwall@dshs.wa.gov.

Submit Written Comments to and Identify WAC Numbers: Paige Wall, Acting Rules coordinator, Rules and Policies Assistance Unit, P.O. Box 45850, Olympia, WA 98504-5850, FAX (360) 902-8292, by February 24, 1998.

Date of Intended Adoption: No sooner than February 25, 1998.

January 20, 1998

Edith M. Rice, Chief

Office of Legal Affairs

GUARDIANSHIP FEES FOR CLIENTS OF THE DEPARTMENT

NEW SECTION

WAC 388-79-010 Applicability and reason for the chapter. It is the intent of this WAC to carry out RCW 43.20B.460, and that part of RCW 11.92.180 which allows the department to set maximum fees and administrative costs allowed by courts in guardianships for a department of social and health services (DSHS) client residing in a nursing facility or in a residential or home setting who is required by DSHS to contribute a portion of their income towards the cost of residential or supportive services.

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NEW SECTION

WAC 388-79-020 Definitions. "Administrative costs" means necessary costs paid by the guardian including attorney fees and costs of service of process at the least expensive level, but should not include costs which are normal overhead such as telephone, copying, and secretarial time.

"Client" means a person who has been approved for a grant or program administered by the department.

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NEW SECTION

WAC 388-79-030 Guardianship fees and administrative costs including attorney fees. The superior court may allow guardianship fees and administrative costs in an amount set out in an order, but for orders entered after March 15, 1998; for a department client:

(1) Where the order establishes or continues a legal guardianship and the order requires a future review or accounting; the amount of guardianship fees for a client shall not exceed one hundred seventy-five dollars per month;

(2) The amount of administrative costs including attorney fees directly related to establishing a guardianship for a client shall not exceed seven hundred dollars; and

(3) In any order on review the amount of administrative costs including attorney fees shall not exceed a total of six hundred dollars during any three year period.

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NEW SECTION

WAC 388-79-040 Procedure to revise award letter. After March 15, 1998 where a client is involved in a guardianship then the department shall be entitled to notice of proceedings as described in RCW 11.92.150.

(1) The notice shall be given to the appropriate regional administrator of the program serving the client. A list of the regional administrators will be available upon request.

(2) If the fees and costs requested and established by the order are equal to or lower than the maximum amount set by this rule then the award letter or document setting the client's participation shall be adjusted to reflect that amount upon receipt by the department of the court order setting a monthly amount.

(3) Should there be exceptional circumstances then the guardian may request exceptional fees from the regional administrator before obtaining a court order. If the fees and costs are agreed to by the regional administrator then the award letter or document setting the client's participation shall be adjusted to reflect that amount upon receipt of a court order setting such agreed monthly amount.

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AMENDATORY SECTION (Amending WSR 97-16-008, filed 7/24/97, effective 7/24/97)

WAC 388-513-1380 Institutional--Participation--Client share of monthly institutional payments. This section describes the allocations which can be deducted from the institutional client's income and excess resources in order to determine the amount available for the client's participation in the cost of care.

(1) ((In reducing payment to the institution, the department shall consider the institutionalized client's:

(a) Income under WAC 388-513-1330 (3)(a), (b), (c), and (d); and

(b) Resources under WAC 388-513-1350, 388-513-1360, and 388-513-1365.

(2) In reducing payment to the institution, the department shall consider the eligible institutionalized)) The client's excess resources are available to meet the cost of care after the following ((allocations)) deductions in this order:

(a) Health insurance and Medicare premiums, deductions, and co-insurance not paid by a third party; and

(b) Noncovered medical bills which are the liability of the client and not paid by a third party.

(((3))) (2) The ((department shall not use)) allocations used to reduce excess resources under subsection (((2))) (1) of this section cannot be used to reduce income under subsection (((4))) (3) of this section.

(((4) The department shall deduct the following amounts, in the following order, from the institutionalized client's total income, including amounts disregarded in determining eligibility))

(3) The client's nonexempt income is available to meet the cost of care after the following deductions in this order:

(a) ((Specified)) Deductions described in subsection (3)(a) may not total more than the one-person medically needy income level (MNIL):

(i) A personal needs allowance (PNA) as follows:

(((i))) (A) One hundred sixty dollars for a veteran living in a Medicaid-certified state veteran's home nursing facility;

(((ii))) (B) Ninety dollars for a single veteran, or widow or widower of a veteran receiving an improved veteran's pension; or

(((iii))) (C) Forty-one dollars and sixty-two cents for all other clients in a medical ((institutions)) facility.

(((b))) (ii) Federal, state, or local income taxes:

(((i))) (A) Mandatorily withheld from earned or unearned income for income tax purposes before receipt by the client; or

(((ii))) (B) Not covered by withholding, but are owed or have been paid by the client((; and)).

(iii) ((Does not exceed the one-person medically needy income level less the client's personal needs allowance.

(c))) Wages ((not to exceed the one-person medically needy income level (MNIL) less the client's personal needs allowance)) for a client who:

(((i))) (A) Is SSI-related; and

(((ii))) (B) Receives the wages as part of a department-approved training or rehabilitative program designed to prepare the client for a less restrictive placement. When determining this deduction((, the department shall:

(A) Not allow a deduction for)) employment expenses((; and

(B) Apply the client's wages not deducted under this subsection to the client's cost of care.

(d) The total amounts deducted under subsection (4) (a), (b), and (c) of this section shall not exceed the one-person MNIL.

(e))) are not deducted.

(iv) Guardianship fees and administrative costs including any attorney fees paid by the guardian, after March 15, 1998, only as allowed by chapter 388-79 WAC.

(b) A monthly needs allowance for the community spouse not to exceed, effective January 1, ((1997, one thousand nine hundred seventy-six)) 1998, two thousand nineteen dollars, unless specified in subsection (((6))) (5) of this section. ((The department shall ensure)) The monthly needs allowance is:

(i) An amount added to the community spouse's gross income to provide a total ((community spouse's income)) of one thousand three hundred twenty-seven dollars;

(ii) Excess shelter expenses as specified under subsection (((5))) (4) of this section; and

(iii) Allowed only to the extent the client's income ((of the institutionalized spouse)) is made available to the community spouse.

(((f) An amount for the))

(c) A monthly maintenance needs ((of)) amount for each dependent ((family member)) or minor child, dependent parent or dependent sibling:

(i) Residing with the community spouse((:

(i))), equal to one-third of the amount that one thousand three hundred twenty-seven dollars exceeds the family member's income. Child support received from an absent parent is the child's income.

(ii) (("Family member" means a:

(A) Dependent or minor child;

(B) Dependent parent; or

(C) Dependent sibling of the institutionalized or community spouse.

(g) When an institutional client does not have a community spouse, an amount for the maintenance needs of family members residing in the client's home)) Not residing with the community spouse, equal to the ((medically needy income level)) MNIL for the number of ((legal dependents)) family members in the home less the income of the ((dependents)) family members.

(((h) Amounts for)) (d) Incurred medical expenses, not subject to third-party payment, which are the current liability of the client including((, but not limited to)):

(i) Health insurance premiums, deductions, and coinsurance((, or deductible charges)) amounts; and

(ii) Necessary medical care recognized under state law, but not covered under Medicaid.

(((i))) (e) Maintenance of the home of a single person or institutionalized couple:

(i) Up to one hundred percent of the one-person federal poverty level per month;

(ii) Limited to a six-month period; ((and))

(iii) When a physician has certified that the client is likely to return to the home within the six-month period; and

(iv) When social service staff documents initial need for the income exemption and reviews the person's circumstances after ninety days.

(((5))) (4) For the purposes of this section, ((the department shall)) "excess shelter expenses" equal the actual expenses under subsection (4)(a) of this section less the standard shelter allocation under subsection (4)(b) of this section:

(a) ((Determine)) Shelter expenses ((to be)) are the actual required maintenance expenses for the community spouse's principal residence for:

(i) Rent;

(ii) Mortgage;

(iii) Taxes and insurance;

(iv) Any maintenance care for a condominium or cooperative; and

(v) The food stamp standard utility allowance ((for utilities)), provided the utilities are not included in the maintenance charges for a condominium or cooperative.

(b) ((Consider)) The standard shelter allocation ((to be)) is three hundred ninety-nine dollars, effective April 1, 1997.

(((c) Consider as "excess shelter expenses" an amount equal to the actual expenses under subsection (5)(a) of this section less the standard shelter allocation under subsection (5)(b) of this section.

(6))) (5) The ((department shall determine the)) amount the institutional spouse may allocate((s)) to the community spouse may ((only)) be greater than the amount in subsection (((4)(e)(i))) (3)(b) of this section only when:

(a) A court enters an order against the institutionalized client for the ((community spouse)) support of the community spouse; or

(b) A hearings officer determines a greater amount is needed because of exceptional circumstances resulting in extreme financial duress.

(((7) The client shall use the income remaining after allocations specified in subsection (4) of this section toward payment of the client's cost of care at the department rate.

(8) SSI-related clients.

(a))) (6) SSI((-related)) clients shall continue to receive total payment under 1611 (b)(1) of the Social Security Act for the first three full calendar months of institutionalization in a public or Medicaid-approved medical institution or facility when the:

(((i))) (a) Stay in the institution or facility is not expected to exceed three months; and

(((ii) SSI-related)) (b) The client((s)) plans to return to former living arrangements.

(((b) The department shall not consider the SSI payment

when computing the client's participation amount.

(9) The department shall not consider income from reparation payments made by the Federal Republic of Germany when computing the client's participation amount.))