SOCIAL AND HEALTH SERVICES
(Aging and Disability Services Administration)
Preproposal statement of inquiry was filed as WSR 02-01-043.
Title of Rule: Amendments to WAC 388-79-010, 388-79-020, 388-79-030 and 388-79-040, guardianship fees for clients of the department. New WAC 388-79-050 has been added.
Purpose: (1) Increase advance notice period from ten to twenty days; (2) prohibit deductions from participation for fees and costs occurred prior to Medicaid eligibility, during any subsequent period of ineligibility, or after the client has died; (3) fees in excess of the amounts currently allowed will be taken from current participation; and (4) language that establishes a process for the department to use in making a determination of whether fees that exceed amounts should be granted.
Statutory Authority for Adoption: RCW 11.92.180, 43.20B.460.
Statute Being Implemented: RCW 11.92.180 and 43.20B.460.
Summary: The rules are proposed to: (1) Increase advance notice period from ten to twenty days; (2) prohibit deductions from participation for fees and costs occurred prior to Medicaid eligibility, during any subsequent period of ineligibility, or after the client has died; (3) fees in excess of the amounts currently allowed will be taken from current participation; and (4) language that establishes a process for the department to use in making a determination of whether fees that exceed amounts should be granted.
A CR-102 proposed rule-making notice was previously filed as WSR 02-11-067 and a hearing was held on June 25, 2002. Based on comments from the hearing, Aging and Disability Services Administration (ADSA) decided to withdraw the previous notice and complete an analysis of the costs associated with these rules and how they affect small businesses as well as clients and facilities. See Small Business Economic Impact Statement below.
Reasons Supporting Proposal: The department is barred from paying guardianship fees directly per RCW 11.92.180 and 43.20B.020. The department's proposed WAC language establishes a way to measure and determine if the fees awarded are "reasonable." This language is necessary based on federal compliance requirements and is needed to cap escalating expenditures. These amendments will increase budget controls and help our administration estimate and possibly close the accounting period once a regular payment on an account can be established and once deductions for participation during periods of ineligibility are eliminated resulting in less administrative burden for both the department and the professional guardians. Eliminating deductions during periods of ineligibility will save department money. This rule will also help our regional administrators prepare by adding ten days making notice of proceedings a total of twenty days.
Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Kristi Knudsen, P.O. Box 45600, Olympia, WA 98504-5600, (360) 725-2537, firstname.lastname@example.org.
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: (1) Increase advance notice period from ten to twenty days; (2) prohibit deductions from participation for fees and costs occurred prior to Medicaid eligibility, during any subsequent period of ineligibility, or after the client has died; (3) fees in excess of the amounts currently allowed will be taken from current participation; and (4) language that establishes a process for the department to use in making a determination of whether fees that exceed amounts should be granted.
The department expects the loss of revenue to the small businesses affected will be minor.
Proposal Changes the Following Existing Rules: WAC 388-79-010, rewriting the rule to be more understandable and to clarify that a federal mandate requires DSHS to establish maximum fees.
WAC 388-79-020, adding "guardianship fees" and "participation" to definitions and changing the definition of "client" from any department client to those who receive Medicaid funded long-term care.
WAC 388-79-030, adding language to preclude the allowance of prospective or retrospective guardianship fees and administrative costs prior to the Medicaid recipient's eligibility for long-term care services or after the recipient's death.
WAC 388-79-040, language to allow the regional administrator an added ten days notice before the guardian files with the court.
A small business economic impact statement has been prepared under chapter 19.85 RCW.
The department believes that these changes will not have a substantial impact or a more than minor cost to the small businesses and others affected. However, the department has completed a small business economic impact statement.
SUMMARY OF PROPOSED RULES: The Department of Social and Health Services' Aging and Disability Services Administration is proposing amendments to chapter 388-79 WAC, Guardianship fees for clients of the department.
This chapter currently consists of four sections, WAC 388-79-010 - 388-79-040. We propose to amend those sections and add a new section, WAC 388-79-050, for treatment of orders entered after the effective date of this WAC. The purpose of this chapter is to bring the department into compliance with the federal requirements to:
|•||Establish reasonable and maximum rates for guardian fees and administrative costs associated with guardianships.|
|•||Implement RCW 11.92.180.|
|•||Reside in nursing facilities or in residential or home settings and;|
|•||Must pay a portion of their monthly income toward the cost of their care.|
|•||$175 per month for monthly guardian fees;|
|•||$700 in administrative costs to establish the guardianship; and|
|•||$600 in administrative costs to maintain the guardianship during each subsequent three year period.|
The proposed amendments to this chapter include:
|•||Rewriting WAC 388-79-010 to be more understandable and to clarify that a federal mandate requires DSHS to establish maximum fees.|
|•||Adding "guardianship fees" and "participation" to definitions under WAC 388-79-020 and changing the definition of "client" from any department client to those who receive Medicaid-funded long-term care.|
|•||Making minor changes to WAC 388-79-030 to increase clarity. This is the section that establishes the maximum amounts.|
|•||Amending WAC 388-70-040 to pertain only to guardianship orders entered after June 15, 1998, and before the promulgation of the new section WAC 388-79-050. Minor changes were also added for clarity.|
|•||An increase in the advance notice period from ten to thirty days when a request is made for fees in excess of those described in WAC 388-79-030. The increase in time will allow DSHS a more reasonable time frame to evaluate whether the fees should be granted on an exceptional basis.|
|•||Language that establishes criteria for the department to use in making a determination of whether fees that exceed the amounts described in WAC 388-79-030 should be granted.|
|•||Policy stating that fees in excess of those described in WAC 388-79-030 that are approved by the court will be deducted from current participation, i.e. when the bill "comes due," which would prohibit retroactive participation adjustments. Participation is defined as the amount of the client's monthly income that is contributed toward the cost of care. A retroactive participation adjustment would require DSHS to send a letter to the client and facility stating that the amount of participation owed for a prior month has been overpaid. The provider would have to refund the difference to the guardian or client and wait to be reimbursed by the state.|
|Retroactive participation adjustments affect small and large businesses, such as adult family home providers, boarding homes, and nursing facilities. If the department sends an award letter adjusting participation prior to the current month, the provider must make up the difference to the guardian until the state can do a reimbursement, which can present a cash flow problem, especially for adult family home owners who have a maximum of six residents.|
|Retroactive participation adjustments may also be a violation of RCW 11.92.180, which states that guardians and limited guardians shall not be compensated at county or state expense. The reimbursement process is technically a payment for guardianship costs from state funds. The only realistic way to maintain the separation described in this law is to have the client pay for guardianship services from current and future income.|
|•||Policy stating that fees incurred during periods before Medicaid eligibility or any subsequent period of noneligibility will not be deducted from the client's participation. Allowing these fees as a deduction would violate RCW 11.92.180, which states that the guardian cannot be paid at state or county expense.|
|•||Policy stating that fee amounts approved by the court at a prior accounting and advanced to the guardian may not be increased after the client dies. Since the client's income and guardianship dies "with the client" any fees allowed beyond what the court approved would be in violation of the RCW as well as the court order.|
|•||Policy that requires the guardian to furnish the regional administrator with complete legal packets that include all documents filed with the court. This is to ensure that the department receives the fee amounts in a timely manner.|
The department's proposed rules will not have a disproportionate impact on the state's small businesses due to the fact that all of them are small. Under RCW 19.85.030, the Regulatory Fairness Act requires that agencies compare cost of compliance for small businesses with the cost of compliance for 10% of the largest businesses impacted by our rules. The department has determined that there are no guardians or guardianship agencies in the state with more than fifty employees; therefore no comparison can be made of the impact of our proposed rule changes between small and large businesses.
Nevertheless, ADSA does wish to explore the economic impact of our proposed rule changes to guardians in the state of Washington. ADSA has analyzed the proposed rule amendments and has determined that guardians will be financially affected by these changes. We conclude that there should not be any increase in costs associated with the changes, but some guardians may have a decrease in revenue.
In this SBEIS, we will first provide background information. Then we will discuss the cost of compliance for each of the changes.
BACKGROUND: Under RCW 11.92.180 and 43.20B.460, DSHS is barred from paying guardianship fees directly to the guardian. In 1993 the federal Health Care Financing Authority (HCFA, now called CMS) placed the state of Washington on a Title XIX noncompliance list for allowing unreasonable guardian fees from the client's Medicaid participation. CMS stated that Washington's practice violated the federal rules under Title XIX of the Social Security Act. This placed our entire Medicaid federal funding at risk. The only federally allowable method to pay guardianship fees is to deduct them, as part of the personal needs allowance from the client's income. In 1994 the legislature passed a bill that ordered DSHS to establish by rule the maximum amount of guardianship fees and administrative costs that may be allowed by the court as compensation for a guardian of an incapacitated person who is a DSHS client residing in a nursing facility or in a residential or home setting and is required by DSHS to contribute a portion of their income towards the cost of care. CMS requires states to establish reasonable and maximum amounts for guardian fees.
In 1995, the department's authority to limit fees was challenged in proposed bill SHB 1865. At that time the state received additional letters from CMS about compliance. In a letter dated February 22, 1995, CMS stated that any deduction other than the required $30 personal needs allowance must be accompanied by a state plan amendment. It must establish, to CMS's satisfaction, that the greater amount is reasonable. CMS does not automatically consider court-established fees to be reasonable. DSHS is required to make an independent determination of a "reasonable" amount and to explain how we arrived at the amount to satisfy CMS. DSHS' proposed WAC language, with the list of required duties establishes a way to measure and determine if the fees awarded are "reasonable." Copies of letters sent to the department from HCFA are in Appendix A of this document.
ADSA has made inquiries to other states to get an idea of how our methods and fees compare. We received responses from Minnesota, Alaska, North Dakota, Arizona, Maine, Texas, Oregon, New York, Michigan, and Indiana. The results from the inquiries are:
|•||Minnesota funds guardianships at a county level. Many counties have no funding at all. Hennepin County allows $15/hour not to exceed five hours/month. Ramsey County allows 5% of the institutionalized person's income not to exceed $100/month.|
|•||Michigan has a maximum fee of $60/month. Indiana allows $35/month with a provision to allow more if the state (not the guardian) makes the request. These appear to be the two states that are most similar to Washington in regard to a standard fee amount. North Dakota states they fund guardianships at approximately $97/month, but only for the developmentally disabled population.|
|•||Many of the other states have very limited programs that operate in only a few counties and allow fees similar to those cited above. For example, Oregon has no program at all except in Multnomah and Jackson counties. Public employees in New Jersey and Maine provide guardianship services.|
|•||Serving long-term care clients on a statewide basis by allowing fees as a deduction from participation; and|
|•||Allowing guardian fees and administrative costs in amounts that are greater than any other state that responded.|
The major weakness of the current WAC chapter is that the usual and customary services provided by a guardian, (that is, that package of services provided in exchange for a "reasonable" fee set forth in a federally mandated rule), is not defined. Neither the courts, certified guardians or ADSA staff have a way to measure what constitutes a usual and customary set of services. Nor can they determine with any consistency what would constitute "extraordinary" services that deserve a higher rate of compensation. As previously stated, the department is required by federal statute to establish a maximum fee amount. A pattern of DSHS allowing more than the maximum amount, especially when the client does not need extraordinary services, would result in a loss of federal funding.
The most important substantive change in our proposed rules is to make the definition of usual and customary guardianship services and extraordinary services known to all stakeholders. To establish the definition of usual and customary guardianship duties, DSHS largely has relied on materials prepared by or for certified guardians, such as guardians' accountings to the court and the Washington State Guardian Manual.
Examples of usual and customary guardianship duties include:
|•||Acting as a representative payee;|
|•||Managing the client's financial affairs;|
|•||Preserving and/or disposing of property;|
|•||Making health care decisions;|
|•||Visiting and/or maintaining contact with the client;|
|•||Accessing public assistance programs on behalf of the client;|
|•||Communicating with the client's service providers; and|
|•||Preparing any reports or accountings required by the court.|
|•||On June 25, 2002, a public hearing was held for proposed rule changes to this chapter. We received a great deal of input from attorneys and professional guardians to these rule change proposals during the public comment period.|
|•||In response to comments from the public hearing, DSHS temporarily withdrew the rule change proposal in order to do a small business impact statement. A "Guardianship WAC SBEIS/CBA Survey" was mailed to certified guardians listed on the website known as professional guardian certification program at www.courts.wa.gov. This site had a list of guardianship agencies and individual professional guardians as of June 7, 2002. The mailing was done on September 19, 2002. The response rate was approximately 13%, with responses from individual guardians and agencies across the state. See Appendix B for a copy of the survey.|
Policy stating that fees in excess of those described in WAC 388-79-030 that are approved by the court will be deducted from current and future participation, with no retroactive adjustments.
The survey results show that this is a major area of concern for the guardians who responded. One guardian stated that 100% of attorney fees are collected retroactively. Some guardians estimated cost in terms of dollars. These amounts ranged from $300 to $25,000 per year. Other guardians estimated cost as a percentage. These ranged from 0 to 50%. One guardian estimated cost as an elimination of staff that could possibly be as high as two thirds. Another stated that Medicaid clients would no longer be served.
We feel that a misunderstanding of our intentions drove the majority of responses received to this change. DSHS is not proposing to deny retroactive fees. We are only requiring that retroactive fees be deducted from current and future income.
Example: DSHS is notified on July 1st of a court order for fees to be awarded of $175 per month with an attorney fee of $700 effective April 1st. The department would begin budgeting fees with July income. In addition to the ongoing fee, we would allow retroactive fees for April - June and the attorney fee until enough was deducted to compensate for them. We would not change the participation amounts for April - June.
The only potential revenue loss to guardians with this rule change would occur if the client passes away before the retroactive fee deductions are completed. As long as the fee requests are not received long after the effective date of the order, the loss of revenue should be minimal. The exact costs, however, are impossible to quantify.
Proposal to limit maximum fees to $175 per month for services that are "usual and customary" as defined in the WAC unless the court approves a higher amount.
DSHS does intend that guardianship fees for those clients who do not require extraordinary services be limited to $175 per month in order to preserve federal funding requirements. Many guardians in the state are not currently requesting more than that. For those guardians, there will be no loss of revenue due to this clarification.
Guardians often ask the department to allow fees higher than $175 for a short period of time because extraordinary services are required. For example, a guardian may need $350 per month for the first four months the client is on Medicaid due to a complicated property transaction, exceptional medical service needs, litigation, etc. Again, our rule proposals will not prohibit that process in any way. It will, in fact, make it more likely to occur since the language describing the process is now in WAC. For some guardians, this will represent an increase in revenue. It should not decrease revenue for any guardian.
In some areas of the state many guardians, especially the larger agencies, demand minimal fees of $225 or more for every client, or they ask the court for additional fees at a future accounting for clients who did not receive services beyond those defined as "usual and customary." For those guardians, the loss of revenue is the difference between $175 and the amount they are currently asking for, times the amount of clients in the caseload on a monthly basis. If the court approves a higher amount, the loss would be less than that.
For example, a guardian is currently receiving $225 per month for every client who does not need extraordinary services. A new client is approved for $175 per month due to the rule change. The loss would be $50 per month. DSHS would further intend that fees for existing clients be reduced to $175 at future accountings, which would also reduce the revenue by $50 per month for that client.
Again, DSHS is not able to quantify exact amounts since the courts also have a say in all matters relating to guardianships.
An increase in the advance notice period from ten to thirty days when a request is made for fees in excess of those described in WAC 388-79-030.
Some guardians did not answer this question or stated that there will not be an additional cost. The guardians who did foresee a cost estimated it to be a few hundred dollars per year up to $2300.
Many guardians expressed opposition to this change at the public hearing in June of 2002. The opposition did not relate to the cost in most cases. Guardians felt that this was an undue burden and would create chaos in their time frames for preparation of court orders.
Policy stating that fees incurred during periods prior to Medicaid eligibility or any subsequent period of noneligibility will not be deducted from the client's participation.
All of the responses received indicate that this clarification would not be a cost to the guardians or would be very minimal. A few guardians stated that they would be less likely to help clients apply for Medicaid for fear of not being compensated for services provided during the period between date of application and date of approval.
DISPROPORTIONATE ECONOMIC IMPACT ANALYSIS: When proposed rule changes cause more than minor costs to small businesses, the Regulatory Fairness Act requires an analysis that compares these costs between small businesses and 10% of the largest businesses. This analysis is not required for this change since all of the affected businesses are small businesses.
MITIGATING EXPENSES: Mitigation of expenses associated with these rule change proposals are:
|•||Courts may award fees higher than our maximum, after consideration of the facts and law.|
|•||DSHS will amend the proposed rule changes in regard to the advance notice period for requests that exceed $175. Most of the guardians felt that this was an undue burden. We will change the advance notice period from thirty to twenty days.|
|•||Another mitigating factor is that DSHS is not proposing to reduce fee amounts for clients currently subject to a court order that awards fees higher than the maximum. We would not ask for a reduction until the next accounting is due.|
|•||When the client's participation in the cost of care is determined, the deductions are made in sequential order. One of the deductions we make is an amount allocated to the client's spouse who resides in the community and is not receiving long-term care services. The deduction for the guardianship fee is made before the spousal allocation. Therefore, a guardianship fee of $175 will permit the spouse to receive $50 more of the client's income than a fee of $225.|
|•||The Medical Assistance Administration of DSHS recently did a survey of guardianship fees for clients residing in nursing facilities. The main focus of the audit was to determine what services the guardians were performing. The surveyors found that staff at the nursing facilities had very little knowledge of what the usual and customary services of a guardian are. Our proposed language about these services would be very helpful for them.|
Please contact David Armes if you have any questions at (360) 725-2561.
A copy of the statement may be obtained by writing to Kristi Knudsen, DSHS Aging and Disability Services Administration, P.O. Box 45600, Olympia, WA 98504-5600, phone (360) 725-2537, fax (360) 438-8633.
RCW 34.05.328 does not apply to this rule adoption. The department finds that this rule does not meet the definition of a significant legislative rule in RCW 34.05.328 (5)(c)(iii).
Hearing Location: Office Building 2 Auditorium (DSHS Headquarters) (parking at 11th and Washington), 1115 Washington, Olympia, WA 98504, on April 22, 2003, at 10:00 a.m.
Assistance for Persons with Disabilities: Contact Andy Fernando, DSHS Rules Coordinator, by April 18, 2003, phone (360) 664-6094, TTY (360) 664-6178, e-mail email@example.com.
Submit Written Comments to: Identify WAC Numbers, DSHS Rules Coordinator, Rules and Policies Assistance Unit, P.O. Box 45850, Olympia, WA 98504-5850, fax (360) 664-6185, e-mail firstname.lastname@example.org, by 5:00 p.m., April 22, 2003.
Date of Intended Adoption: Not earlier than April 23, 2003.
February 26, 2003
Bonita H. Jacques
for Brian H. Lindgren, Manager
Rules and Policies Assistance Unit3211.1
[Statutory Authority: RCW 11.92.180 and 43.20B.460. 98-10-055, § 388-79-010, filed 4/30/98, effective 5/31/98.]
(2) "Department client" means a person who has been
approved to receive a grant or program administered by the
department)) "Client" means a person who is eligible for and
is receiving Medicaid-funded long-term care.
"Guardianship fees" or "fees" means necessary fees charged by a guardian for services rendered on behalf of a client.
"Participation" means the amount the client pays from current monthly income toward the cost of the client's long-term care.
[Statutory Authority: RCW 11.92.180 and 43.20B.460. 98-10-055, § 388-79-020, filed 4/30/98, effective 5/31/98.]
(1) The amount of guardianship fees shall not exceed one hundred seventy-five dollars per month;
(2) The amount of administrative costs directly related to establishing a guardianship for a department client shall not exceed seven hundred dollars; and
In any order on review)) The amount of
administrative costs shall not exceed a total of six hundred
dollars during any three-year period.
[Statutory Authority: RCW 11.92.180 and 43.20B.460. 98-10-055, § 388-79-030, filed 4/30/98, effective 5/31/98.]
(1) The notice shall be given to the appropriate regional administrator of the program serving the department 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 department's 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 fees and costs above those requested in WAC 388-79-030 be requested:
(a) The appropriate regional administrator will be given notice of the hearing as described in RCW 11.92.150, and provided with copies of all supporting documents filed with the court.
(b) Should the court determine after consideration of the facts, law and evidence of the case, that fees and costs higher than normally allowed in WAC 388-79-030 are just and reasonable and should be allowed then the award letter or document setting the department client's participation shall be adjusted to reflect that amount upon receipt by the department of the court order setting a monthly amount.
[Statutory Authority: RCW 11.92.180 and 43.20B.460. 98-10-055, § 388-79-040, filed 4/30/98, effective 5/31/98.]
(2) The notice must be served to the department's regional administrator of the program that is providing services to the client. A list of the regional administrators will be furnished upon request.
(3) If the fees and costs requested and established by the order are equal to or less than the maximum amounts allowed under WAC 388-79-030, then the department will adjust the client's current participation to reflect the amounts allowed upon receipt by the department of the court order setting the monthly amounts.
(4) Should fees and costs in excess of the amounts allowed in WAC 388-79-030 be requested:
(a) At least ten days before filing the request with the court, the guardian must present the request in writing to the appropriate regional administrator to allow the department an opportunity to consider whether the request should be granted on an exceptional basis.
(b) In considering a request for extraordinary fees or costs, the department must consider the following factors:
(i) The department's obligation under federal and state law to ensure that federal Medicaid funding is not jeopardized by noncompliance with federal regulations limiting deductions from the client's participation amount;
(ii) The usual and customary guardianship services for which the maximum fees and costs under WAC 388-79-030 must be deemed adequate for a Medicaid client, including but not limited to:
(A) Acting as a representative payee;
(B) Managing the client's financial affairs;
(C) Preserving and/or disposing of property;
(D) Making health care decisions;
(E) Visiting and/or maintaining contact with the client;
(F) Accessing public assistance programs on behalf of the client;
(G) Communicating with the client's service providers; and
(H) Preparing any reports or accountings required by the court.
(iii) Extraordinary services provided by the guardian, such as:
(A) Unusually complicated property transactions;
(B) Substantial interactions with adult protective services or criminal justice agencies;
(C) Extensive medical services setup needs and/or emergency hospitalizations; and
(D) Litigation other than litigating an award of guardianship fees or costs.
(c) Should the court determine after consideration of the facts and law that fees and costs in excess of the amounts allowed in WAC 388-79-030 are just and reasonable and should be allowed, then the department will adjust the client's current participation to reflect the amounts allowed upon receipt by the department of the court order setting the monthly amounts.
(5) In no event may a client's participation be prospectively or retrospectively reduced to pay fees and costs incurred before the effective date of the client's Medicaid eligibility; or during any subsequent time period when the client was not eligible for, or did not receive long-term care services; or after the client has died. There is no client participation towards DDD certified and contracted supported living services under chapter 388-820 WAC, so the department has no responsibility to reimburse the client for guardianship fees when those fees result in the client having insufficient income to pay their living expenses.
(6) If the court at a prior accounting has allowed the guardian to receive fees and costs from the client's monthly income in advance of services rendered by the guardian, and the client dies before the next accounting, the fees and costs allowed by the court at the final accounting may be less than, but may not exceed, the amounts advanced and paid to the guardian from the client's income.
(7) Guardians must furnish the regional administrator with complete packets to include all documents filed with the court and with formal notice clearly identifying the amount requested.