FINAL BILL REPORT

SHB 274

                                  C 283 L 87

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

SYNOPSIS AS ENACTED

BACKGROUND:

Vendors of nursing home services are required to provide security for outstanding debts when their contracts with the Department of Social and Health Services (DSHS) are terminated.  There are no similar security requirements for non-nursing home vendors.

Vendors are subject to different interest assessments on overpayment debts.  For some vendors, interest is suspended on any amount in dispute; for medical vendors only, no interest is assessed on overpayments resulting from DSHS error.

Except in the case of nursing homes, the department has no statutory authority to recoup overpayment debts from subsequent vendor payments.  The department may, however, recoup the interest accrued on such debts.

Patients in state mental hospitals are liable for the cost of their care.  Some medical insurance carriers do not cover the care provided in state hospitals even though the care would be covered if provided by any other medical facility.

Actions to collect overpayments made to public assistance recipients must be brought within six years of notice of the overpayment or termination of assistance.  Compromise or write-off of uncollectible claims requires the approval and interaction of the attorney general's office.

Federal law authorizes the recovery, after a recipient's death, of medical assistance costs for medical assistance recipients.  Under state law, DSHS may recover medical assistance costs from the proceeds of the sale of the recipient's home only upon certification that the patient will never be able to return to the home.

State law authorizes DSHS to provide medical assistance to a recipient whose personal injuries are the result of third-party negligence.  However, if the recipient was contributorily negligent, DSHS cannot recover its full costs from the third-party tort feasor.

SUMMARY:

The Department of Social and Health Services (DSHS) is authorized to require non-nursing home vendors to post security for any outstanding balance on an overpayment.  This security may be in the form of withheld future payments, assignment of contractual rights, time deposits, surety and other forms of bonds and other security interest.  The department may also file a lien for the unsecured overpayment balance.

Interest on overpayment debts is established for all vendors at the rate of 1 percent per month on any remaining balance.  If the vendor discovers the overpayment, interest begins to accrue 90 days after the vendor notifies DSHS; if DSHS discovers the overpayment, interest begins to accrue 30 days after notice or 90 days after the overpayment, whichever is earliest.  The authority to suspend interest payments on amounts in dispute is repealed.  No interest may be assessed on overpayments made by department error.

The department is authorized to recoup, or set off, vendor overpayments and applicable interest from subsequent payments to that vendor.

Group disability insurers, health care service contractors and health maintenance organizations are prohibited from excluding coverage of care provided in state hospitals if the benefits would have otherwise been payable.

Actions to collect overpayments made to public assistance recipients and vendors must be brought within six years after the date of overpayment notice by DSHS.  The department is authorized to compromise and write-off claims.

Upon a recipient's death, the department may recover from the recipient's estate the cost of medical care provided to a recipient 65 years of age or older, unless:  a) there is a surviving spouse; or b) there is a surviving child who is under 21 or who is disabled; or c) there are children over 21, in which case the first $50,000 and 65 percent of the remainder of the proceeds are exempt.  The department is authorized to file liens after the death of the recipient and claims in probate proceedings.

In third-party liability actions to recover the cost of care for recipients negligently injured by a tort-feasor, DSHS is not subject to reduction based on contributory negligence.

The vendor lien provisions are incorporated into a new chapter.

VOTES ON FINAL PASSAGE:

      House 52  43

      Senate    40     8(Senate amended)

      House 85   7(House concurred)

EFFECTIVE:July 26, 1987