Estate Recovery
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Estate Recovery


Revised December 31, 2013



Purpose:

WAC 182-527-2700Purpose
WAC 182-527-2730Definitions
WAC 182-527-2733Estate liability
WAC 182-527-2737Deferring recovery.
WAC 182-527-2740Age when recovery applies
WAC 182-527-2742Services subject to recovery
WAC 182-527-2750Delay of recovery for undue hardship
WAC 182-527-2754Assets not subject to recovery and other limits on recovery
WAC 182-527-2790Filing liens



WAC 182-527-2700

WAC 182-527-2700

Effective October 1, 2012

WAC 182-527-2700 Purpose

This chapter describes the requirements, limitaitons, and procedures that apply when the department recovers the cost of medical care from the estate of a deceased client and when the department files liens prior to the client's death.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.



WAC 182-527-2730

WAC 182-527-2730

Effective October 1, 2012

WAC 182-527-2730 Definitions

The following definitions apply to this chapter:

"Contract health service delivery area (CHSDA)" means the geographic area within which contract health services will be made available by the Indian Health Service to members of an identified Indian community who reside in the area identified in 42 C.F.R. Sec. 136.21(d) and 136.22.

"Domestic partner" means an adult who meets the requirements for a valid registered domestic partnership as established by RCW 26.60.030 and who has been issued a certificate of state registered domestic partnership by the Washington Secretary of State.  When the terms "domestic partner" or "domestic partnership" are used in this chapter, they mean "state registered domestic partner" or "state registered domestic partnership".

"Estate" means all 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.  The value of the estate will be reduced by any valid liability against the decedent's property at the time of death.  An estate also includes:

  1. For a client who died after June 30, 1995 and before July 27, 1997, nonprobate assets as defined by RCW 11.02.005, except property passing through a community property agreement; or
  2. For a client who died after July 26th, 1997 and before September 14, 2006, nonprobate assets as defined by RCW 11.02.005.
  3. For a client who died on or after September 14, 2006, nonprobate assets as defined by RCW 11.02.005 and any life estate interest held by the recipient immediately before death.

"Heir" means the decedent's surviving spouse and children (natural and adopted); or those persons who are entitled to inherit the decedent's property under a will properly executed under RCW 11.12.020 and accepted by the probate court as a valid will.

"Joint tenancy" means ownership of property held under circumstances that entitle one or more owners to the whole of the property on the death of the other owner(s), including, but not limited to, joint tenancy with right of survivorship. 

"Life estate" means an ownership interest in a property only during the lifetime of the person(s) owning the life estate.  In some cases, the ownership interest lasts only until the occurrence of some specific event, such as remarriage of the life estate owner.  A life estate owner may not have the legal title or deed to the property, but may have rights of possession, use, income and/or selling their life estate interest in the property.

"Lis pendens" means a notice filed in public records warning that title to certain real property is in litigation and the outcome of the litigation may affect the title.

"Long-term care services" means, for the purposes of this chapter only, the services administered directly or through contract by the department of social and health services for clients of the home and community services division and division of developmental disabilities including, but not limited to, nursing facility care and home and community services.

"Medicaid" means the state and federally funded program that provides medical services under Title XIX of the Federal Social Security Act.

"Medical assistance" means Medicaid services funded under title XIX or state-funded medical services.

"Medicare Savings Programs" means the programs described in WAC 388-517-0300 (Editors note:  Correct WAC citation is 182-517-0300) that help a client pay some of the costs that Medicare does not cover. 

"Property" Examples include, but are not limited to, personal property, real property, title property, and trust property as described below:

  1. "Personal  property" means any property that is not classified as real, title, or trust property in the definitions provided here;
  2. "Real property" means land and anything growing on, attached to, or erected thereon'
  3. "Title property" means, for the purposes of this chapter only, property with a title such as motor homes, mobile homes, boats, motorcycles, and vehicles. 
  4. "Trust property" means any type of property interest titled in, or held by, a trustee for the benefit of another person or entity.

"State-only funded long-term care" means the long-term care services that are financed with state funds only.

"Qualified long-term care insurance partnership" means an agreement between the centers for medicare and medicaid services (CMS), the Washington state insurance commission which allows for the disregard of any assets or resources in an amount equal to the insurance benefit payments that are made to or on behalf on an individual who is a beneficiary under a long-term care insurance policy that has been determined by the Washington state insurance commission to meet the requirements of section 1917(b)(1)(c)(iii) of the Act. 

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.



WAC 182-527-2733

WAC 182-527-2733

Effective October 1, 2012

WAC 182-527-2733 Estate liability

  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:
    1. A surviving spouse; or
    2. A surviving child who was either:
      1. Under twenty-one years of age; or
      2. Blind or disabled as defined under chapter 388-511 WAC (Editor's note: correct WAC reference is WAC 182-512-0050).
  3. The estate of a frail elder or vulnerable adult under RCW 74.34.005 is not liable for the cost of adult protective services (APS) financed with state funds only.
  4. On or before December 31, 2009, the client's estate is not liable for amounts paid for Medicare premiums and other cost-sharing expenses incurred on behalf of a client who is eligible only for the Medicare Savings programs (MSP), and not otherwise Medicaid eligible.
  5. On or after January 1, 2010, the client's estate is not liable for amounts paid for medical assistance cost-sharing for benefits for clients who received coverage under a MSP only or for clients who receive coverage under a medicare savings program and medicaid as described in 42 USC 1396a(a)(10)(E).

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.



WAC 182-527-2737

WAC 182-527-2737

Effective October 1, 2012

WAC 182-527-2737 Deferring recovery.

  1. For a client who died after June 30, 1994, the department defers recovery from the estate until:
    1. The death of the surviving spouse, if any; and
    2. There is no surviving child who is:
      1. Twenty years of age or younger; or
      2. Blind or disabled at the time of the client's death, as defined under WAC 388-475-0050. (Editor's note:  correct WAC is 182-512-0050)  

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.



WAC 182-527-2740

WAC 182-527-2740

Effective October 1, 2012

WAC 182-527-2740 Age when recovery applies

The client's age and the date when services were received determine whether the client's estate is liable for the cost of medical services provided.   Subsection (1) of this section covers liability for Medicaid services and subsection (2) covers liability for state-only funded long-term care services.  An estate may be liable under both sections:

  1. For a client who on July 1, 1994 was:
    1. Age sixty-five or older, the client's estate is liable for Medicaid services that were subject to recovery and provided on and after the date the client became age sixty-five or after July 26, 1987, whichever is later:
    2. Age fifty-five through sixty-four years of age, the client's estate is liable for Medicaid services that were subject to recovery and provided on and after July 1, 1994; or
    3. Under age fifty-five, the client's estate is liable for Medicaid services that were subject to recovery and provided on and after the date the client became age fifty-five.
  2. Regardless of the client's age when the services were provided, the client's estate is liable for state-only funded long-term care services provided to:
    1. Home and Community Services' clients on and after July 1, 1995; and
    2. Division of Development Disabilities' clients on and after June 1, 2004.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.



WAC 182-527-2742

WAC 182-527-2742

Effective October 1, 2012

WAC 182-527-2742 Services subject to recovery

The department considers the medical services the client received and the dates when the services were provided to the client, in order to determine whether the client's estate is liable for the cost of medical services provided.  Subsection (1) of this section covers liability for Medicaid services, subjection (2) covers liability for state-only funded long-term care services, and subsection (3) covers liability for all other state-funded services.   An estate can be liable under any of these subsections.

  1. The client's estate is liable for:
    1. All Medicaid services provided from July 26, 1987 through June 30, 1994;
    2.  The following Medicaid services provided after June 30, 1994 and before July 1, 1995:
      1. Nursing facility services;
      2. Home and community-based services; and
      3. Hospital and prescription drug services provided to a client while receiving nursing facility services or home and community-based services.
    3. The following Medicaid services provided after June 30, 1995 and before June 1, 2004:
      1. Nursing facility services;
      2. Home and community-based services;
      3. Adult day health;
      4. Medicaid personal care;
      5. Private duty nursing administered by the aging and disability services administration of the department; and
      6. Hospital and prescription drug services provided to a client while receiving services described under (c)(i), (ii), (iii), (iv) or (v) of this subsection.
    4. The following services provided on and after June 1, 2004 through December 31, 2009:
      1. All Medicaid services, including thoses services described in subsection (c) of this section;
      2. Medicare savings programs services for individuals also receiving Medicaid;
      3. Medicare premiums only for individuals also receiving Medicaid; and
      4. Premium payments to managed care organizations.
    5. The following services provided on or after January 1, 2010:
      1. All Medicaid services except thoses defined under subsection (d)(ii) and (d)(iii) of this section;
      2. All institutional medicaid services described in subsection (c) of this section;
      3. Premium payments to managed care organizations; and
      4. The client's proportional share of the state's monthly contribution to the Centers for Medicare and Medicaid Services (CMS) to defray the costs for outpatient prescription drug coverage provided to a person who is eligible for medicare Part D and Medicaid. 
  2. The client's estate is liable for all state-only funded long-term care services and related hospital and prescription drug services provided to:
    1. Home and Community Services' clients on and after July1, 1995; and
    2. Division of Developmental Disabilities' clients on and after June 1, 2004.
  3. The client's estate is liable for all state-funded services provided regardless of the age of the client at the time the services were provided. 

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.



WAC 182-527-2750

WAC 182-527-2750

Effective October 1, 2012

WAC 182-527-2750 Delay of recovery for undue hardship

The department delays recovery under this section when the department determines that recovery would cause an undue hardship for an heir. This delay is limited to the period during which the undue hardship exists. The undue hardship must exist at the time of the client's death in order to be considered for a delay of recovery.

  1. Undue hardship exists when:

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

    2. Recovery would deprive an heir of shelter and the heir lacks the financial means to obtain and maintain alternative shelter; or

    3. The client is survived by a domestic partner.

  2. Undue hardship does not exist when:

    1. The adjustment or recovery of the decedent's cost of assistance would merely cause the heir inconvenience or restrict his or her lifestyle; or

    2. The undue hardship was created as a result of estate planning methods by which the heir or deceased client divested, transferred or otherwise encumbered assets, in whole or in part, to avoid recovery from the estate.

  3. When a delay in recovery is not granted, the department provides notice to the person who requested the delay of recovery. The department's notice includes information on how to request an administrative hearing to contest the department's denial.

  4. When a delay of recovery is granted under subsection (1)(a) or (1)(b) of this section, the department may revoke the delay of recovery if the heir(s):

    1. Fails to supply timely information and resource declaration when requested by the department;

    2. Sells, transfers, or encumbers title to the property;

    3. Fails to reside full-time on the premises;

    4. Fails to pay property taxes and utilities when due;

    5. Fails to identify the state of Washington as the primary payee on the property insurance policies. The person granted the delay of recovery must provide the department with documentation of the coverage status on an annual basis.

    6. Have a change in circumstances under subsection (1) of this section for which the delay of recovery due to undue hardship was granted; or

    7. Dies.

  5. When a delay of recovery is granted due to undue hardship, the department has the option to:

    1. Apply a lien; and/or

    2. Accept a payment plan.

  6. A person may request an administrative hearing to contest the department's denial of delay of recovery due to undue hardship when that person suffered a loss because the delay was not granted.

  7. A request for an administrative hearing under this section must:

    1. Be in writing;

    2. State the basis for contesting the department's denial of the request for a delay of recovery due to an undue hardship;

    3. Include a copy of the department's denial;

    4. Be signed by the requester and include the requester's address and telephone number; and

    5. Be served, as described in WAC 388-527-2870, on the office of financial recovery (OFR) within twenty-eight calendar days of the date that the department sent the decision denying the request for a delay of recovery.

  8. Upon receiving a request for an administrative hearing, the department notifies persons known to have title to the property and other assets of the time and place of the administrative hearing.

  9. An adjudicative proceeding held under this section is governed by chapters 34.05 RCW and 388-02 WAC and this section. If a provision in this section conflicts with a provision in chapter 388-02 WAC, the provision in this section governs.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.



WAC 182-527-2754

WAC 182-527-2754

Effective October 1, 2012

WAC 182-527-2754 Assets not subject to recovery and other limits on recovery

  1. Recovery does not apply to the first fifty thousand dollars of the estate value at the time of death and is limited to thirty-five percent of the remaining value of the estate for services the client:
    1. Received through July 24, 1993; and
    2. When the client died with:
      1. No surviving spouse;
      2. No surviving child who is:
        1. Under twenty-one years of age;
        2. Blind; or
        3. Disabled.
      3. A surviving child who is twenty-one years of age or older.
  2. For services received on and after July 25, 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 subsections (3) through (8) of this section.
  3. For a client who received services on and after July 25, 1993 through June 30, 1994, the following property, up to a combined fair market value of two thousand dollars, is not recovered from the estate of the client:
    1. Family heirlooms;
    2. Collectibles;
    3. Antiques;
    4. Papers;
    5. Jewelry;
    6. Photos; and
    7. Other personal effects of the deceased client and to which a surviving child is entitled.
  4. Certain properties belonging to American Indians/Alaska Natives (AI/AN) are exempt from estate recovery if at the time of death:
    1. The deceased client was enrolled in a federally recognized tribe; and
    2. The estate or heir documents the deceased client's ownership interest in trust or nontrust real property and improvements located on a reservation, near a reservation as designated and approved by the Bureau of Indian Affairs of the U.S. Department of the Interior, or located:
      1. Within the most recent boundaries of a prior federal reservation; or
      2. Within the Contract Health Service Delivery Area boundary for social services provided by the deceased client's tribe to its enrolled members.
  5. Protection of trust and nontrust property under subsection (4) is limited to circumstances when the real property and improvements pass from an Indian (as defined in 25 U.S.C. Chapter 17, Sec. 1452(b)) to one or more relatives (by blood, adoption, or marriage), including Indians not enrolled as members of a tribe and non-Indians, such as spouses and step-children, that their culture would nonetheless protect as family members, to a tribe or tribal organization and/or to one or more Indians.
  6. Certain AI/AN income and resources (such as interests in and income derived from tribal land and other resources currently held in trust status and judgment funds from the Indian Claims Commission and the U.S. Claims Court) are exempt from estate recovery by other laws and regulations.
  7. Ownership interests in or usage rights to items that have unique religious, spiritual, traditional, and/or cultural significance or rights that support subsistence or a traditional life style according to applicable Tribal law or custom.
  8. Government reparation payments specifically excluded by federal law in determining eligibility are exempt from estate recovery as long as such funds have been kept segregated and not commingled with other countable resources and remain identifiable.
  9. Assets designated as protected by a qualified long term care partnership (QLTC) policy issued on or after December 1, 2011, may be disregarded for estate recovery purposes if: (a) The insured individual's estate is the recipient of the estate recovery exemption; or (b) The insured individual holds title to property which is potentially subject to a pre-death lien and that individual asserts the property is protected under the long term care (LTC) partnership policy.
  10. An individual must provide clear and convincing evidence that the asset in question was designated as protected to the office of financial recovery including: (a) Proof of a valid QLTC partnership policy; and (b) Verification from the LTC insurance company of the dollar amount paid out by the policy; and (c) A current DSHS LTCP asset designation form when the LTC partnership policy paid out more than was previously designated.
  11. The insured individual's estate must provide evidence proving an asset is protected prior to the final recovery settlement.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.



WAC 182-527-2790

WAC 182-527-2790

Effective October 1, 2012

WAC 182-527-2790 Filing liens

  1. The department may file liens to recover the cost of medical assistance or state-only funded long-term care services, or both, correctly paid on behalf of a client consistent with 42 U.S.C. 1396p and chapters 43.20B RCW and 388-527 WAC
  2. Prior to the department filing a lien under this section, the department sends a notice via first class mail to:
    1. The address of the property and other assets subject to the lien;
    2. The probate estate's personal representative, if any;
    3. Any other person known to have title to the affected property and/or to the decedent's heir(s) as defined by WAC 388-527-2730; and
    4. The decedent's last known address or the address listed on the title, if any.
  3. The notice in subsection (2) of this section includes:
    1. The decedent's name, identification number, date of birth, and date of death;
    2. The amount of medical assistance or state-only funded long-term care services, or both, correctly paid on behalf of the deceased client that the department seeks to recover;
    3. The department's intent to file a lien against the deceased client's property and other assets to recover the amount of medical assistance or state-only funded long-term care services, or both, correctly paid on behalf of the deceased client;
    4. The county in which the property and other assets are located; and
    5. The procedures to contest the department's decision to file a lien by applying for an administrative hearing.
  4. An administrative hearing only determines:
    1. Whether the medical assistance or state-only funded long-term care services, or both, correctly paid on behalf of the decedent alleged by the department's notice is correct;
    2. Whether the decedent had legal title to the property; and
    3. Whether a lien is allowed under the provisions of Title 42 USC Section 1396p (a) and (b).
  5. A request for an administrative hearing must:
    1. Be in writing;
    2. State the basis for contesting the lien;
    3. Be signed by the requester and must include the requester's address and telephone number; and
    4. Be served to the office of financial recovery (OFR) as described in WAC 388-527-2870, within twenty-eight calendar days of the date the department mailed the notice.
  6. Upon receiving a request for an administrative hearing, the department notifies persons known to have title to the property and other assets of the time and place of the administrative hearing.
  7. Disputed assets must not be distributed while in litigation.
  8. An administrative hearing under this section is governed by chapters 34.05 RCW and 388-02 WAC and this section. If a provision in this section conflicts with a provision in chapter 388-02 WAC, the provision in this section governs.
  9. If an administrative hearing is conducted in accordance with this regulation, and the final agency decision is issued, the department only files a lien against the decedent's property and other assets only if upheld by the final agency decision.
  10. If no known title holder requests an administrative hearing, the department files a lien twenty-eight calendar days after the date the department mailed the notice described in subsection (2) of this section.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

CLARIFYING INFORMATION

*** As a result of implementation of the Affordable Care Act (ACA), this clarifying page may no longer be effective for medical coverage applications received on or after 10/01/2013. Please see the ACA Transition Plan for more information. Clients under 65 years of age who need to apply for medical coverage on or after 10/01/2013 should be referred to Washington Healthplanfinder. Applications for medical coverage for households where all members are 65 years of age and older should be referred to Washington Connection. ***

 

 

 

ESTATE RECOVERY AND LIENS ESTABLISHED PRIOR TO DEATH FOR RECOVERY OF LONG-TERM CARE AND MEDICAL SERVICES

ESTATE RECOVERY

The State of Washington's Estate Recovery Program was enacted July 26, 1987. In 1993, federal law mandated that all states enact Estate Recovery programs. State and federal law mandate the State of Washington's estate recovery program. Recovery of the cost of services and the age when recovery applies has changed several times since the program was enacted. The department recovers from estates according to the estate recovery law in effect at the time the services were received.

Service Costs Subject to Estate Recovery

  • Services provided from 7/26/87 through 6/30/94:

    The cost of all Medicaid services provided for the client's care from age 65, or after 7/26/87 (whichever is later), through 6/30/94. This includes services paid through the client's Medical Identification card plus waiver services and nursing facility care.

  • Services provided from 7/1/94 through 6/30/95:

    Only the cost of the following Medicaid services, not all medical assistance and services:

    • Nursing facility services

    • COPES

    • Traumatic Brain Injury - TBI

    • Community Alternatives Program - CAP (DDD program)

    • Outward Bound Residential Alternatives - OBRA (DDD program)

    • Coordinated Community Aids Service Alternatives - CASA (MAA program)

    • Hospital and prescription drug services related to services listed above

  • Services provided from 7/1/95 through 5/31/04:

    Only the cost of the following services, not all medical assistance and services:

    • Nursing facility services

    • COPES

    • Traumatic Brain Injury - TBI

    • Community Alternatives Program - CAP (DDD program)

    • Outward Bound Residential Alternatives - OBRA (DDD program)

    • Coordinated Community Aids Service Alternatives - CASA (MAA program)

    • Medicaid Personal Care

    • Adult Day Health

    • Private Duty Nursing administered by AASA

    • State-funded long-term care services (administered by ADSA)
      (Chore services, Adult Family Home, Adult Residential Care)

    • Hospital and prescription drug services related to services listed above

  • Services provided as of 6/1/04

    • All Medicaid services, premium payments to managed care organizations, and Medicare cost-sharing services and Medicare premiums for individuals also receiving Medicaid. This includes long-term care services.

    • Estate recovery does not apply to individuals who only receive benefits from a Medicare Savings Program.

    • All state-funded long-term care services and related hospital and prescription drug services administered by ADSA and DDD.


NOTE:

Medicaid services are federally funded services and include Family related CN, SSI related CN/MN and ABD cash medical benefits.


Age When Recovery Applies

  • Prior to 7/1/94:

    Age 65 for Medicaid services

  • From 7/1/94 to 6/30/95:

    Age 55 for Medicaid services

  • As of 7/1/95:

    Age 55 for Medicaid long term care services

    At any age for state funded long term care services

Services Exempt from Recovery

  • Services received prior to 7/26/87, when the Estate Recovery Program was enacted

  • Adult protective services provided to a frail elder or vulnerable adult and paid for only by state funds

  • Medicare premiums and other services received under a Medicare Savings Program if the client was eligible only for assistance under a Medicare Savings Program (such as QMB or SLMB) and not for any other Medicaid program.

 




Assets Not Subject to Recovery

  • Certain properties belonging to American Indians/Alaska natives (explained in WAC 182-527-2754)

  • Government reparation payments specifically excluded by federal law as long as such funds have been kept segregated and not commingled with other countable resources and remain identifiable.

Recovery Process

  • The Office of Financial Recovery (OFR) administers Estate Recovery collections for the Department of Social and Health Services (DSHS). OFR collects approximately $17 million per year to offset payments made by the State for medical services.

  • DSHS recovers from the estate of a deceased client. "Estate" includes all real property (land or buildings) and all other property (mobile homes, vehicles, savings, other assets) the client owned or had an interest in when the client died. Estate may also include certain other property interests an individual had immediately before death. These include a joint interest or a life estate in a house or land.

    A home transferred to a spouse or to a minor, blind or disabled child prior to the client's death, is not considered part of the client's estate.

  • DSHS recovers from estates according to the estate recovery law in effect at the time the services were received.

  • DSHS defers recovery:

    • While there is a surviving child, who is under 21 years of age, blind or disabled.

    • Until the death of a surviving spouse (if any). When the surviving spouse dies, recovery action will be taken against property in which the deceased client had an interest in at the time of death.

    • If the estate subject to adjustment or recovery is the sole income-producing asset of one or more qualified individuals and income is limited; or the department determines that recovery would cause an undue hardship for a qualified individual(s). Qualified individual means an heir or an unmarried individual who, immediately prior to the client's death, was eighteen years of age or older, shared the same regular and permanent residence with the client and with whom the client had an exclusive relationship of mutual support, caring, and commitment. A request for a hardship waiver must be made in writing to the Office of Financial Recovery and each request is reviewed on its own merits. If the request is denied, the decision may be appealed through the Administrative Hearing process.

    • DSHS will file a lien or make a claim against property that is included in the deceased client's estate. Prior to filing a lien against real or titled property, the department gives notice and an opportunity for a hearing to the probate estate's personal representative, if any, or any other person known to have title to the affected property. Liens placed through the Estate Recovery process are valid for 20 years.

    LIENS ESTABLISHED PRIOR TO DEATH FOR RECOVERY OF MEDICAL SERVICES AND LONG-TERM CARE

    Recent legislative changes gave DSHS the authority to file a lien against the property of a medical assistance client who is permanently institutionalized in a nursing facility or other medical institution prior to his or her death. The department will recover the costs of long-term care and medical services paid from the client's estate or sale of the property. If the client is discharged from the medical institution and returns home, the department releases the lien. No lien will be filed if one or more of the following persons are lawfully residing in the home:

    • The individual's spouse;
    • The individual's child who is under twenty-one years of age or blind or disabled according to Social Security criteria;
    • The individual's sibling who has an equity interest in the home and resided in the property for at least one year prior to the date of the individual's admission to the medical institution.

    The department can recover the medical expenditures without regard to the age of the client.


WORKER RESPONSIBILITIES

The Department is required to notify all potential Medicaid applicants and Medicaid recipients about the Estate Recovery provisions. The required notification is included in the current DSHS Application for Benefits form and the client's signature acknowledges receipt of the required notice. At eligibility review, staff need to provide Medicaid recipients with notice of their Rights & Responsibilities as this also includes language explaining Estate Recovery.

Workers are required to enter information regarding all assets and resources owned by the Medicaid client to the ACES system including assets which are exempt for the purposes of eligibility. Recent policy changes following the 2005 Deficit Reduction Act (DRA) require all primary residence information and current market value be indicated in ACES since home equity is an eligibility factor for long term care services. A client may be ineligible for some long term care services if the equity in their primary residence exceeds the limit set in WAC 388-513-1350.

For non-institutional medical programs, home equity is not an eligibility factor. It is not necessary to get verification of the equity value of the primary residence. Workers may determine fair market value using any reasonable method such as local Assessor's office website, client statement, current market appraisal or other internet resources such as Zillow.com. A current mortgage statement may be used to establish encumbrances but is not required. HCS staff and CSD staff who process long term care programs such as HCS/DDD waivers or nursing home cases will need to request accurate verification of fair market value and encumbrances to support the Excess Home equity provisions of the DRA.

If staff discovers that an asset, or part of an asset, has been transferred out of the client's name, the worker needs to review the case and determine the effect of the transfer on eligibility. Some transfers prevent the client from being eligible to receive long term care services and require that the case be terminated, giving advance and adequate notice, and a period of ineligibility be established. OFR may discover transfers by clients in their review of county records and will notify the financial worker.

Annuities and some trusts owned by Medicaid clients need to list the State as the beneficiary of any assets remaining in the trust upon the death of the client in order to qualify for Medicaid benefits. Information regarding Trusts is found in WAC 388-561-0100. Information on Annuities is found in WAC 388-561-0200.

Workers need to ensure that a complete copy of the terms of the trust or annuity is placed in the client's record and a copy is sent to the Office of Financial Recovery (OFR).

 

Offices with DMS access may forward a copy of the trust document to Kenneth Washington at OFR or mail a copy to the following address:

Office of Financial Recovery,
PO Box 9501,
Olympia, WA 98507-9501.

The telephone number for the Office of Financial Recovery is 1(800) 562-6114.

Website to check for fair market value:

http://www.zillow.com/ 

The following information sheets may be useful to staff and may be given out to clients who request more information on Estate Recovery.

Columbia Legal Services bulletin.

Estate Recovery sheet used by ADSA.

Modification Date: December 31, 2013