Original Notice.

Preproposal statement of inquiry was filed as WSR 97-20-014.

Title of Rule: Chapter 388-527 WAC, Estate recovery.

Purpose: Eliminates exemptions from estate recovery for clients with community property agreements, exempts costs of state-funded protective services from estate recovery and adds effective dates. Chapter 388-527 WAC has been rewritten to comply with the principles of Executive Order 97-02.

Statutory Authority for Adoption: RCW 43.20B.080 and 74.08.090.

Statute Being Implemented: RCW 74.34.010 and 43.20B.080.

Summary: See Purpose above.

Name of Agency Personnel Responsible for Drafting: Joanie Scotson, Medical Assistance Administration, 617 8th S.E., Olympia, WA, (360) 753-7462; Implementation and Enforcement: Margaret French, Office of Financial Recovery, P.O. Box 9501, Olympia, WA, (360) 664-5500.

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

Rule is necessary because of federal law, 42 USC 1396p and state court decision, Washington State Supreme Court Dec. 636188/63713-0.

Explanation of Rule, its Purpose, and Anticipated Effects: See Purpose above.

Proposal Changes the Following Existing Rules: See Purpose above.

No small business economic impact statement has been prepared under chapter 19.85 RCW. This proposed rule does not have an economic impact on small businesses. It concerns eligibility policy and affects only clients and staff.

RCW 34.05.328 applies to this rule adoption. These rules do meet the definition of a significant legislative rule but DSHS is exempt from preparing a cost benefit analysis under RCW 34.05.328 (5)(b)(vii).

Hearing Location: Lacey Government Center (behind Tokyo Bento Restaurant), 1009 College Street S.E., Room 104-B, Lacey, WA 98503, on May 11, 1999, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Paige Wall by April 26, 1999, phone (360) 902-7540, TTY (360) 902-8324, e-mail pwall@dshs.wa.gov.

Submit Written Comments to: Identify WAC Numbers, Paige Wall, Rules Coordinator, Rules and Policies Assistance Unit, P.O. Box 45850, Olympia, WA 98504-5850, fax (360) 902-8292, by May 11, 1999.

Date of Intended Adoption: No sooner than May 12, 1999.

February 24, 1999

Marie Myerchin-Redifer, Manager

Rules and Policies Assistance Unit

The department will recover from the estate of a deceased client, the cost of medical care correctly paid on the client’s behalf by the department as described by this chapter.

[]

(((1)(a))) For estate recovery purposes((, "estate" includes)):

(((i) For a client who dies before July 1, 1995 all real and personal property and any other assets that pass upon the client's death:

(A) Under the client's will;

(B) By intestate succession pursuant to chapter 11.04 RCW; or

(C) Under chapter 11.62 RCW; or

(ii))) "Estate” means all real and personal property and any other assets that pass upon the client’s death under the client’s will or by intestate succession pursuant to chapter 11.04 RCW or under chapter 11.62 RCW. An estate also includes:

(1) For a client who ((dies)) died after June 30, 1995 ((all real and personal property and any other assets that pass upon the client's death:

(A) Under the client's will;

(B) By intestate succession pursuant to chapter 11.04 RCW; or

(C) Under chapter 11.62 RCW; and

(D))) and before July 27, 1997, nonprobate assets as defined by RCW 11.02.005, except property passing through a community property agreement((.

(b))) ; or

(2) For a client who died after July 26, 1997, nonprobate assets as defined by RCW 11.02.005.

The value of the estate shall be reduced by any valid liability against the deceased client's property at the time of death.

(((2))) "Long-term care services" means the services administered directly or through contract by the aging and adult services administration of the department, including but not limited to nursing facility care and home and community services.

"State-funded long-term care" means the long-term care services that are paid only with state funds ((and do not include federal funds)).

(((3))) "Medical assistance" means the federal aid medical care program provided ((to categorically needy persons as defined)) under Title XIX of the Federal Social Security Act.

[Statutory Authority: 1995 1st sp.s. c 18 and RCW 74.08.090.  95-19-001 and 95-24-037 (Orders 3893 and 3893A), § 388-527-2730, filed 9/6/95 and 11/29/95, effective 10/7/95 and 12/30/95.]

(1) The client’s estate is not liable for services provided before July 26, 1987.

(2) The client’s estate is not liable when the client died before July 1, 1994 and on the date of death there was:

(a) A surviving spouse; or

(b) A surviving child who was either:

(i) Under twenty-one years of age; or

(ii) Blind or disabled as defined under chapter 388-511 WAC.

(3) The estate of a frail elder or vulnerable adult under RCW 74.34.010 is not liable for the cost of adult protective services (APS) paid for only by state funds.

[]

When a client died after June 30, 1994 and received services after June 30, 1994, recovery from the estate is deferred until:

(1) The death of the surviving spouse, if any; and

(2) There is no surviving child who is:

(a) Under twenty-one years of age, or

(b) Blind or disabled as defined under chapter 388-511 WAC.

[]

The client’s age and the date when services were received determines whether the client's estate is liable for the cost of medical care provided ((depends, in part, upon the client's age and when the services were received)).  Subsection (1) of this section covers liability for medical assistance and subsection (2) covers liability for state-funded long-term care services.  An estate may be liable under both subsections.

(1) For a client who on July 1, 1994 was:

(a) ((If a client was)) Age sixty-five or older ((on July 1, 1994)), the client’s estate is liable for medical assistance that was subject to recovery and which was provided on and after the date the client became age sixty-five((.)) or after July 26, 1987, whichever is later;

(b) ((If the client was)) Age fifty-five through sixty-four years of age ((on July 1, 1994)), the client’s estate is liable for medical assistance that was subject to recovery and which was provided on and after July 1, 1994((.)); or

(c) ((If a client was)) Under age fifty-five ((on July 1, 1994)), the client’s estate is liable for medical assistance subject to recovery provided on and after the date the client became age fifty-five.

(2) The client’s estate is liable for state-funded long-term care services provided on and after July 1, 1995 regardless of the client's age when the services were provided.

[Statutory Authority: 1995 1st sp.s. c 18 and RCW 74.08.090.  95-19-001 and 95-24-037 (Orders 3893 and 3893A), § 388-527-2740, filed 9/6/95 and 11/29/95, effective 10/7/95 and 12/30/95.]

The medical services the client received and the dates when services were provided determines whether the client's estate is liable for the medical care provided depends, in part, upon what medical services the client received and the dates when services were provided.  Subsection (1) of this section covers liability for medical assistance and subsection (2) covers liability for state-funded long-term care services.  An estate can be liable under both subsections.

(1)(((a))) The client’s estate is liable for:

(a) All medical assistance services provided ((before July 1,)) from July 26, 1987 through June 30, 1994;

(b) The ((estate is liable for the)) following medical assistance services provided after June 30, 1994 and before July 1, 1995:

(i) Nursing facility services;

(ii) Home and community-based services; and

(iii) ((Related)) Hospital ((services)) and prescription drug services provided to a client while receiving nursing facility services at home and community-based services.

(c) The ((estate is liable for the)) following medical assistance services provided after June 30, 1995:

(i) Nursing facility services;

(ii) Home and community-based services;

(iii) Adult day health;

(iv) Medicaid personal care;

(v) Private duty nursing administered by the aging and adult services administration of the department; and

(vi) ((Related)) Hospital and prescription ((drugs services)) drug services provided to a client while receiving services described under (c)(i), (ii), (iii), (iv), or (v) of this subsection.

(2) The client’s estate is liable for all state-funded long-term care services and related hospital and prescription drug services provided after June 30, 1995.

[Statutory Authority: RCW 74.08.090 and 1995 1st sp.s. c 18.  95-19-001 (Order 3893), § 388-527-2742, filed 9/6/95, effective 10/7/95.]

((The department shall waive)) Recovery is waived under this section when recovery would ((work)) cause an undue hardship, except as provided in subsection (3) of this section.  This waiver is limited to the period during which undue hardship exists.

(1) Undue hardship exists when:

(a) The estate subject to adjustment or recovery is the sole income-producing asset of one or more of the heirs and income is limited; or

(b) Recovery would result in the impoverishment of one or more of the heirs; or

(c) Recovery would deprive an heir of shelter and the heir lacks the financial means to obtain and maintain alternative shelter.

(2) Undue hardship does not exist when:

(a) The adjustment or recovery of the client's cost of assistance would merely cause the client's family members inconvenience or restrict the family's lifestyle.

(b) The heir divests assets to qualify under the undue hardship provision.

(3) ((The department shall not waive recovery based on undue hardship)) When a deceased client's assets were disregarded in connection with a long-term care insurance policy or contract under chapter 48.85 RCW, recovery is not waived.

(4) ((A person who requests the department to waive recovery in whole or in part, and who suffers a loss because the request is not granted, may contest the department's decision in an adjudicative proceeding.  The department's decision shall)) When a waiver is not granted, the department will provide notice to the person who requested the waiver. The denial of a waiver must state:

(a) The requirements ((for)) of an application for an adjudicative proceeding ((and state)) to contest the department’s decision to deny the waiver; and

(b) Where assistance ((might)) may be obtained to make ((an)) such application.  ((The proceeding shall be governed by chapters 34.05 RCW and 388-08 WAC and this section.  If a provision in this section conflicts with a provision in chapter 388-08 WAC, the provision in this section governs.)) 

(5) A person may contest the department’s decision in an adjudicative proceeding when that person requested the department waive recovery, and suffered a loss because that request was not granted.

(6) An application for an adjudicative proceeding under this section must:

(a) Be in writing;

(b) State the basis for contesting the department's denial of the request to waive recovery;

(c) Include a copy of the department's denial of the request to waive recovery;

(d) Be signed by the applicant ((and the state)) and include the applicant's address and telephone number;

(e) Be served within twenty-eight days of the date the applicant received the department's decision denying the request for a waiver.  ((An application filed up to thirty days late may be treated as if timely filed)) If the applicant shows good cause ((for filing)) , the application may be filed up to thirty days late; and

(f) Be served on the office of financial recovery ((in a manner which shows proof of receipt, such as personal service or certified mail, return receipt requested.  The mailing address of the Office of Financial Recovery is: P.O. Box 9501, Olympia WA 98507-9501.  The physical location of the Office of Financial Recovery is Capitol View Building, Second Floor, 712 Pear Street Southeast, Olympia, Washington)) (OFR) as described in WAC 388-527-2795.

(7) An adjudicative proceeding held under this section shall be governed by chapters 34.05 RCW and 388-08 WAC and this section. If a provision in this section conflicts with a provision in chapter 388-08 WAC, the provision in this section governs.

[Statutory Authority: 1995 1st sp.s. c 18 and RCW 74.08.090.  95-19-001 and 95-24-037 (Orders 3893 and 3893A), § 388-527-2750, filed 9/6/95 and 11/29/95, effective 10/7/95 and 12/30/95.]

(1) ((If a client died before July 25, 1993 with no surviving spouse or blind or disabled child, but with a surviving child,)) Recovery does not apply to the first fifty thousand dollars of the estate value at the time of death and ((recovery)) is limited to thirty-five percent of the remaining value of the estate for services the client:

(a) Received before July 25, 1993; and

(b) When the client died with:

(i) No surviving spouse;

(ii) No surviving child who is:

(A) Under twenty-one years of age;

(B) Blind; or

(C) Disabled.

(iii) A surviving child who is twenty-one years of age or older.

(2) ((If)) For services received after July 24, 1993, all services recoverable under WAC 388-527-2742 will be recovered, even from the first fifty thousand dollars of estate value that is exempt above, except as set forth in subsection (3) of this section.

(3_ For a client ((died)) who received services after July 24, 1993 and before July 1, 1994, ((the department shall not seek recovery against)) the following property, up to a fair market value of two thousand dollars, is not recovered from the estate of the client:

(a) Family heirlooms,

(b) Collectibles,

(c) Antiques,

(d) Papers,

(e) Jewelry,

(f) Photos, and

(g) Other personal effects of the deceased client and to which a surviving child is entitled.

[Statutory Authority: 1995 1st sp.s. c 18 and RCW 74.08.090.  95-19-001 and 95-24-037 (Orders 3893 and 3893A), § 388-527-2754, filed 9/6/95 and 11/29/95, effective 10/7/95 and 12/30/95.]

(1) ((The department shall file liens, seek adjustment, or otherwise effect recovery)) Liens are filed, adjustment sought, and other recoveries effected by the department for medical assistance or state-funded long-term care, or both, correctly paid on behalf of a client ((as required by)) consistent with 42 U.S.C. 1396p and chapters 43.20B RCW and 388-527 WAC.

(2) When the department seeks to recover from a client's estate the cost of medical assistance or state-funded long-term care, or both, provided to the client, prior to filing a lien against the deceased client's real property, ((the department shall provide)) notice shall be given to:

(a) The probate estate's personal representative, if any; or

(b) ((The decedent's surviving spouse, if any; or

(c))) Any other person ((having)) know to have title to the affected property.

(3) Prior to filing a lien against any of the deceased client's real property, ((the department shall provide ascertained persons having)) a person known to have title to the property ((notice)) shall be notified and have an opportunity for an adjudicative proceeding((.  The department shall)) as follows:

(a) ((Serve upon ascertained persons having)) Any person known to have title to the property shall be served with notice of intent to file lien, which shall state:

(i) The deceased client's name, social security number, if known, date of birth, and date of death;

(ii) The amount of medical assistance, or state-funded long-term care, or both, correctly paid on behalf of the deceased client the department seeks to recover;

(iii) The department's intent to file a lien against the deceased client's real property to recover the medical assistance or state-funded long-term care, or both, correctly paid on behalf of the deceased client;

(iv) The county in which the real property is located; and

(v) The right of the ((ascertained person having)) person known to have title to the property to contest the department's decision to file a lien by ((filing an application)) applying for an adjudicative proceeding with the office of financial recovery((; and)) (OFR).

(b) ((Provide)) An adjudicative proceeding ((to)) can determine whether:

(i) The amount of medical assistance or state-funded long-term care, or both, correctly paid on behalf of the deceased client alleged by the department's notice of intent to file lien is correct; and

(ii) The deceased client had ((any)) legal title to the real property at the time of the client's death.

(4) An application for an adjudicative proceeding must:

(a) Be in writing;

(b) State the basis for contesting the department's notice of intent to file the lien;

(c) Be signed by the applicant and state the applicant's address and telephone number;

(d) Be served on ((the office of financial recovery)) (OFR) within twenty-eight days of the date the applicant received the department's notice of intent to file the lien.  An application filed up to thirty days late may be treated as timely filed if the applicant shows good cause for filing late; and

(e) Be served on ((the office of financial recovery in a manner in which shows proof of receipt, such as personal service or certified mail, return receipt requested.  The mailing address of the Office of Financial Recovery is P.O. Box 9501, Olympia WA 98507-9501.  The physical location of the Office of Financial Recovery is Capitol View Building, Second Floor, 712 Pear Street Southeast, Olympia, Washington)) OFR as described in WAC 388-527-2795.

(5) ((Upon receipt of an application for an adjudicative proceeding, the department shall provide notice of the proceeding to all other ascertained)) Persons ((having)) known to have title to the property shall be notified of the time and place of the adjudicative proceeding by the department when it receives an application for the same.

(6) An adjudicative proceeding under this section shall be governed by chapters 34.05 RCW and 388-08 WAC and this section.  If a provision in this section conflicts with a provision in chapter 388-08 WAC, the provision in this section governs.

(7) If no ((ascertained person having title to the property files an application for)) known title holder requests an adjudicative proceeding ((within)) , a lien shall be filed by the department twenty-eight days ((of)) after the date ((the department served a)) that the notice of intent to file the lien((, the department shall file a lien.  The department shall file a lien)) letter was mailed. The lien will be filed against the deceased client's real property ((for)) in the amount of the correctly paid medical assistance or state-funded long-term care, or both((, correctly paid on behalf of the deceased client alleged in the notice of intent to file lien)).

(8) If an adjudicative proceeding is conducted in accordance with this regulation, when the final agency decision is issued, the department will file a lien against the deceased client’s real property for the amount of the correctly paid medical assistance or state-funded long-term care, or both, as established by that final agency decision.

[Statutory Authority: 1995 1st sp.s. c 18 and RCW 74.08.090.  95-19-001 and 95-24-037 (Orders 3893 and 3893A), § 388-527-2790, filed 9/6/95 and 11/29/95, effective 10/7/95 and 12/30/95.]

Reviser's note: RCW 34.05.395 requires the use of underlining and deletion marks to indicate amendments to existing rules. The rule published above varies from its predecessor in certain respects not indicated by the use of these markings.
NEW SECTION
WAC 388-527-2795
Serving notices on office of financial recovery (OFR).

(1) Legal service must be by personal service or certified mail, return receipt requested, to OFR at the address described in this section.

(2) The mailing address of the office of financial recovery is:

Office of Financial Recovery

P.O. Box 9501

Olympia, WA 98507-9501.

(3) The physical location of the office of financial recovery is:

Blake Office Park

4450 10th Avenue Southeast

Olympia, Washington.

[]

     The following sections of the Washington Administrative Code are repealed:

WAC 388-527-2735	Liability for medical care.
WAC 388-527-2752	Deferring recovery.
WAC 388-527-2753	No liability for medical care.

© Washington State Code Reviser's Office