SENATE BILL REPORT

SHB 274

BYHouse Committee on Human Services (originally sponsored by Representatives Brekke, Braddock and P. King; by request of  Department of Social and Health Services)

Changing provisions relating to how department of social and health services recovers overpayments of benefits to recipients and vendors.

House Committe on Human Services

Senate Committee on Human Services & Corrections

Senate Hearing Date(s):March 31, 1987; April 2, 1987

Majority Report:  Do pass as amended.

      Signed by Senators Stratton, Vice Chairman; Anderson, Deccio, Johnson, Kiskaddon, Kreidler, Peterson, Tanner.

Senate Staff:Jean Soliz (786-7755)

                  April 3, 1987

AS REPORTED BY COMMITTEE ON HUMAN SERVICES & CORRECTIONS, APRIL 2, 1987

BACKGROUND:

DSHS contracts with a wide variety of vendors to provide services, but only nursing home vendors are required to provide security for their outstanding debts when their contracts are terminated.

Interest assessments and collection methods are not standardized.  For some vendors interest is suspended on an amount in dispute, and only medical vendors are exempted from interest on overpayments due to DSHS error.

There is no statutory authority for recoupment of overpayment debts from subsequent vendor payments, except in nursing home contracts.

Patients in state medical hospitals are liable for the cost of their care.  However, certain medical insurance carriers exclude coverage if the care is provided in state hospitals, even though coverage is available for similar care in other facilities.

The statute of limitations on public assistance overpayments begins again each time a family terminates assistance.  DSHS is precluded from writing off uncollectible debts unless approval is sought from the Office of the Attorney General.

Federal law authorizes the recovery of medical assistance costs after a patient's death, but the state law only allows DSHS to recover from the sale of a home, at the point a patient becomes unlikely to ever return home.

DSHS has statutory authority to provide medical assistance to a person who was injured by a third party, but if the patient was partially at fault, DSHS is precluded from recovering part of the costs of medical care.

SUMMARY:

DSHS is authorized to require vendors to post security, such as withheld future payments, assignment of contractual rights, time deposits, surety and other forms of security interests for any outstanding balance on overpayments.  Alternatively, DSHS may file a lien for the overpayment balance.

A standardized assessment of interest on overpayment debts is established for all vendors, calculated at 1 percent per month, if payments are made.  There is no interest assessed on overpayments made by Department error, but interest will accrue on payments in dispute.

DSHS is authorized to make recoupment or set off for overpayments and interest against subsequent payments to the vendor.

Group disability insurers, health care service contractors and health maintenance organizations are prohibited from excluding coverage of care that would be otherwise payable.

The statute of limitations for collection of overpayments is fixed and the Department is given authorization to write off uncollectible debts.

DSHS may recover the cost of care from real property of medical assistance recipients where there is no surviving spouse or children.  Liens may be filed after the death of the recipient.

In cases where a third party pays damages to a recipient of medical assistance, DSHS is given a subrogation right and is not subject to a reduction based on contributory negligence.

SUMMARY OF PROPOSED SENATE AMENDMENT:

DSHS may recover the cost of care rendered to persons over 65 if there are no dependent children, but only if the estate is valued at an amount over $50,000.  Recovery is allowed up to 35 percent of the amount over $50,000.

Fiscal Note:      available

Senate Committee - Testified: Lucille Christensen, DSHS, Revenue Division