DEPARTMENT OF HEALTH AND SOCIAL SERVICES

Division of Medicaid and Medical Assistance

Statutory Auhority: 31 Delaware Code, Section 512 (31 Del.C. §512)

PROPOSED

PUBLIC NOTICE

Estate Recovery Program

In compliance with the State's Administrative Procedures Act (APA - Title 29, Chapter 101 of the Delaware Code) and under the authority of Title 31 of the Delaware Code, Chapter 5, Section 512, Delaware Health and Social Services (DHSS) / Division of Medicaid and Medical Assistance (DMMA) is proposing to amend the Title XIX Medicaid State Plan and the Division of Social Services Manual (DSSM) related to the Estate Recovery Program. Additionally, this action is technical in nature to allow for updated state plan pre print pages. This technical amendment to clarify the plan has no budget impact.

Any person who wishes to make written suggestions, compilations of data, testimony, briefs or other written materials concerning the proposed new regulations must submit same to Sharon L. Summers, Policy and Program Development Unit, Division of Medicaid and Medical Assistance, 1901 North DuPont Highway, P.O. Box 906, New Castle, Delaware 19720-0906 by November 30, 2005.

The action concerning the determination of whether to adopt the proposed regulation will be based upon the results of Department and Division staff analysis and the consideration of the comments and written materials filed by other interested persons.

Summary of Proposed Amendment

Statutory Authority

• Section 1917 of the Social Security Act, Liens, Adjustments and Recoveries, and Transfers of Assets;

• 42 CFR §433.36, Liens and Recoveries;

• State Medicaid Manual, Section 3810, Medicaid Estate Recoveries; and,

• Title 25, Delaware Code, Chapter 50, Liens and Estate Recoveries.

Amending the Following Updated Pre Print State Plan Pages

• Pages 53, 53a, 53b, 53c, 53d, 53e

• Attachment 4.17-A, Pages 1, 2, 3, and 4

Background

Under the estate recoveries provisions in the Omnibus Budget Reconciliation Act (OBRA) of 1993 and §1917(b) of the Social Security Act, states must recover certain Medicaid benefits correctly on behalf of an individual. Beneficiaries are notified of the Medicaid estate recovery program during their initial application for Medicaid eligibility and annual redetermination process. Federal law provides protections to ensure adequate notice to clients, prevention of undue hardship, and cost effectiveness under a state’s recovery program.

For individuals age 55 or older, States are required to seek recovery of payments from the individual's estate for nursing facility services, home and community-based services, and related hospital and prescription drug services. States have the option of recovering payments for all other Medicaid services provided to these individuals.

States are also required to establish procedures, under standards specified by the Secretary for waiving estate recovery when recovery would cause an undue hardship.

Summary of Proposed Amendment

For institutionalized individuals age 55 years or over, the time period for the exclusion of placement of a lien on real property due to intent to return home is being reduced from two (2) years to sixty (60) days. Due to the resources available to postpone and prevent institutionalization, such as the elderly and disabled waiver program, most admissions are permanent or for short-term rehabilitation of less than 60 days. In the nine (9) years that DHSS has been placing liens on real property, most of the properties excluded for the intent to return home were sold during the two (2) year exclusion period or the liens were placed after the two (2) years.

The following proposed changes are effective January 1, 2006:

• DSSM 20310.1.1, Intent to Return and DSSM 20620.3, Community Spouse Income Allowance/Home Maintenance Disregard: Amends the length of time DMMA will protect the $75.00 per month for home maintenance from 6 months to 2 months.

• DSSM 20500.5.2, Lien Recovery Exception: Amends the lien recovery exception provision for a sibling lawfully residing in the home of the recipient from two (2) years (24 months) to one (1) year (12 months) immediately prior to the recipient’s admission for long term care services.

• DSSM 20500.6.1, Exceptions to the Lien Policy: Amends the client’s intent to return home provision from two (2) years to within sixty (60) days of their admission date to a facility. If the stay in the facility is sixty (60) days or more, DHSS will place a lien on the property.

The proposed amendment is subject to approval by the Centers for Medicare and Medicaid Services (CMS).

DSS PROPOSED REGULATION #05-64a

REVISIONS:

53

Revision: HCFA-PM-95-3 (MB)

May 1995

State Plan Under Title XIX Of The Social Security Act

STATE/TERRITORY: DELAWARE

Citation

42 CFR 433.36(c) 4.17 Liens and Adjustments or

1902(a)(18) and Recoveries

1917(a) and (b) of

the Act (a) Liens

___The State imposes liens against an

individual's real property on account

of medical assistance paid or to be

paid.

The State complies with the

requirements of section 1917(a) of the

Act and regulations at 42 CFR 433.36

(c)-(g) with respect to any lien

imposed against the property of any

individual prior to his or her death on

account of medical assistance paid or

to be paid on his or her behalf.

___The State imposed liens on real

property on account of benefits

incorrectly paid.

X *The State imposes TEFRA liens

1917(a) (1) (B) on real property of an

individual who is an inpatient of a

nursing facility, ICF/MR or other

medical institution, where the

individual is required to contribute

toward the cost of institutional care all

but a minimal amount of income

required for personal needs.

The procedure by the State for

determining that an institutionalized

individual cannot reasonably be

expected to be discharged are

specified in Attachment 4.17-A.

(NOTE: If the State indicates in its

State plan that it is imposing TEFRA

liens, the State is required to

determine whether an institutionalized

individual is permanently

institutionalized and afford these

individuals notice, hearing

procedures, and due process

requirements.)

___The State imposes liens on both

real and personal property of an

individual after the individual's death.

*The State only imposes TEFRA liens on real property of inpatient long term care residents age 55 and over under OBRA 93.

53a

Revision: HCFA-PM-95-3 (MB)

May 1995

State Plan Under Title XIX Of The Social Security Act

STATE/TERRITORY: DELAWARE

(b) Adjustments or Recoveries

The State complies with the requirements of section 1917(b) of the Act and regulations at 42 CFR 433.36 (h)-(l).

(1) For permanently institutionalized

individuals, adjustments or recoveries

are made from the individual's estate

or upon sale of the property subject to

a lien imposed because of medical

assistance paid on behalf of the

individual for services provided in a

nursing facility, ICF/MR, or other

medical institution.

___Adjustments or recoveries are

made for all other medical assistance

paid on behalf of the individual.

(2) ___The State determines

"permanent institutional status" of the

individuals under the age of 55 other

than those with respect to whom it

imposes liens on real property under

§1917(a)(1)(B) (even if it does not

impose those liens.

(3) For any individual who received

medical assistance at age 55 or older,

adjustments or recoveries of payments

are made from the individual's

estate for nursing facility

services, home and community-

based services, and related

hospital and prescription drug

services.

X In addition to adjustment of

recovery of payments for services

listed above, payments are adjusted or

recovered for all services under the

State Plan.

53b

Revision: HCFA-PM-95-3 (MB)

May 1995

State Plan Under Title XIX Of The Social Security Act

STATE/TERRITORY: DELAWARE

(4) N/A The State disregards assets

or resources for individuals who

receive or are entitled to receive

benefits under a long term care

insurance policy as provided for

in Supplement 8b to Attachment

2.6-A.

N/A The State adjusts or recovers

from the individual's estate on

account of all medical assistance

paid for nursing facility and other

long-term care services provided

on behalf of the individual

(States other than California,

Connecticut, Indiana, Iowa, and

New York, which provide long-

term care insurance policy-based

asset or resource disregard, must

select this entry. These five States

may either check this entry or one

of the following entries).

N/A The State does not adjust or

recover from the individual's

estate on account of any medical

assistance paid for nursing

facility or other long-term care

services provided on behalf of the

individual.

N/A The State adjusts or recovers

from the assets or resources on

account of medical assistance

paid for nursing facility or other

long-term care services provided

on behalf of the individual to the

extent described below:

53c

Revision: HCFA-PM-95-3 (MB)

May 1995

State Plan Under Title XIX Of The Social Security Act

STATE/TERRITORY: DELAWARE

(c) Adjustments or Recoveries: Limitations

The State complies with the

requirements of Section 1917(b)(2) of

the Act and regulations at 42 CFR

§422.36 (h) - (i) and the State Probate

law.

(1) Adjustment or recovery of

medical assistance correctly paid will

be made only after the death of the

individual's surviving spouse, and

only when the individual has no

surviving child who is under age 21,

blind, or disabled.

(2) With respect to liens on the home

of any individual who the State

determines is permanently

institutionalized and who must as a

condition of receiving services in the

institution apply their income to the

cost of care; the State will not seek

adjustment or recovery of medical

assistance paid on behalf of the

individual until such time as none of

the following individuals are residing

in the individual's home:

(a) a sibling of the individual

(who was residing in the

individual's home for at least one

year immediately before the date

the individual was

institutionalized).

(b) a child of the individual

(who was residing in the

individual's home for at least two

years immediately before the date

the individual was

institutionalized) who established

to the satisfaction of the State that

the care the child provided

permitted the individual to reside

at home rather than become

institutionalized.

(3) No money payments under

another program are reduced as a

means of adjusting or recovering

Medicaid claims incorrectly paid.

53d

Revision: HCFA-PM-95-3 (MB)

May 1995

State Plan Under Title XIX Of The Social Security Act

STATE/TERRITORY: DELAWARE

(d) Attachment 4.17-A

(1) Specifies the procedures for

determining that an institutionalized

individual cannot reasonably be

expected to be discharged from the

medical institution and return home.

The description of the procedure

meets the requirements of 42 CFR

433.36(d).

(2) Specifies the criteria by which a

son or daughter can establish that he

or she has been providing care, as

specified under 42 CFR 433.36(f).

(3) Defines the following terms:

• Estate (at minimum, estate as defined under State Probate law.) Except for the grandfathered States listed in Section 4.17(b)(3), if the State provides a disregard for assets or resources for any individual who received or is entitled to receive benefits under a long-term care insurance policy, the definition of estate must include all real, personal property and assets of an individual (including any property or assets in which the individual had any legal title or interest at the time of death to the extent of the interest and also including the assets conveyed through devices such a joint tenancy, life estate, living trust, or other arrangement).

• individual's home,

• equity interest in the home,

• residing in the home for at least 1 or 2 years,

• on a continuous basis,

• discharge from the medical institution and return home, and

• lawfully residing.

53e

Revision: HCFA-PM-95-3 (MB)

May 1995

State Plan Under Title XIX Of The Social Security Act

STATE/TERRITORY: DELAWARE

(4) Describes the standards and

procedures for waiving estate

recovery when it would cause undue

hardship.

(5) Defines when adjustment or

recovery is not cost-effective. Defines

cost effective and includes

methodology or thresholds used to

determine cost-effectiveness.

(6) Describes collection procedures.

Includes advance notice requirements,

specifies the method for applying for

a waiver, hearing and appeals

procedures, and the time frames

involved.

DSS PROPOSED REGULATION #05-64b

REVISIONS:

ATTACHMENT 4.17-1

Page 1

State Plan Under Title XIX Of The Social Security Act

STATE/TERRITORY: DELAWARE

Liens and Adjustments or Recoveries

1. The State uses the following process for determining that an institutionalized individual cannot reasonably be expected to be discharged from the medical institution and return home:

The process for determining that an institutionalized individual cannot reasonably be expected to be discharged from the medical institution and return home is made based on the individual’s medical condition. The following is considered in making the determination, that it is reasonable that the client may return home within sixty (60) days:

A written statement or DMMA Form 407 completed and signed by the attending physician indicating that it is reasonable to expect the client will be able to return home within sixty (60) days of their admission date. Any lien placed on the real property of an institutionalized client will be released when that client is discharged to return to live in the home on the property.

2. The following criteria are used for establishing that permanently institutionalized individual's son or daughter provided care as specified under regulations at 42 CFR§433.36(f):

Delaware Health and Social Services (DHSS) shall not seek recovery in the case of a lien on an individual's home when there is a son or daughter over the age of twenty-one (21) lawfully residing in the home of the client whom:

a) has resided there for a period of at least two (2) years immediately prior to the date of the client’s admission to a long-term care service;

b) has lawfully resided there on a continuous basis since that time; and

c) can establish to the Department's satisfaction that he or she provided the care and assistance that permitted the recipient to reside in the home rather than in a long-term care facility.

The son or daughter may demonstrate having rendered care or assistance that resulted in a delay in the need for institutionalized care by means of a written statement from an institutionalized individual’s attending medical attending physician or another person or persons who have personal knowledge of the living circumstances of the individual. The written statement must indicate that the individual was able to remain in his or her home because of the care provided by the child. A written statement only from the child will not satisfy this requirement.

NOTE: DHSS can seek recovery from other assets in the estate.

3. The State defines the terms below as follows:

Estate means all real property, as well as all personal property that constitutes assets of the individual’s estate as described in Title 12 of the Delaware Code, Chapter 19.

Individual’s home means his or her principal place of residence.

Equity interest in the home means a formal legal interest such as mortgage or loan.

• Residing in the home for at least one (1) or two (2) years on a continuous basis means using the home as the principal place of residence.

Discharge from the medical institution and return home means the release of a person from a long-term care facility for the purpose of returning to the home for permanent residence or discontinuance of home and community-based services.

Lawfully residing means residing in the home with the permission of the owner or, if under guardianship, the owner’s legal guardian.

4. The State defines undue hardship as follows:

In cases of undue hardship, recovery may be waived for the period of the hardship. Undue hardship exists for certain individuals who have resided in the home of the DHSS long-term care recipient on a continuous basis for a period of at least two (2) years twenty-four consecutive months) immediately prior to the date of the DHSS long-term care recipient’s admission to DHSS long-term care services.

Individuals eligible for recovery waiver are limited to children, grandchildren, parents, or siblings of the DHSS long-term care recipient who meet one of the following conditions:

Receive any Federal or State funded assistance for living expenses (examples: SSI, AFDC, VA Aid and Attendance) and have no other home to which they can return.

OR

Have total family income less than or equal to 200% of the current monthly Federal Poverty limit, and have total family resources that can be converted to cash less than or equal to $3,000, including any real property that they own.

OR

DHSS will also not recover if the real property that is held in ownership with children, grandchildren, siblings or parents constitutes a business that contributes to the livelihood of that other individual or his/her dependents or heirs.

In cases of undue hardship, liens against the real property of DHSS long-term care recipients shall be filed, but a moratorium established on the lien. The moratorium on imposing the lien on the home will exist as long as the hardship condition continues to be met and as long as the above-described individuals reside in the DHSS long-term care recipient’s home on a continuous basis.

NOTE: The waiver for recovery will exist as long as one of the above conditions continues to be met and as long as the above-described individuals reside in the DHSS long-term care recipient’s home on a continuous basis.

5. The following standards and procedures are used by the State for waiving estate recoveries when recovery would cause undue hardship, and when recovery is not cost effective.

Standards: Same as number 4 above.

Procedures: If a hardship condition is requested and verified when the referral for estate recovery is received, it is tracked for eight (8) months. If at the end of eight (8) months the hardship condition still applies the recovery case is closed because Delaware probate law requires that claims against estates be filed within eight (8) months of the date of death.

Not Cost Effective: Criteria for determining cost effectiveness are set forth below in number 6.

6. The State defines when adjustment or recovery is not cost effective. The State defines cost effectiveness as follows (include methodology/thresholds used to determine cost effectiveness.

If there are no resources for burial and the total assets in the estate are less than $5,000 then, it is not considered cost effective to pursue because the State’s probate law requires that funeral expenses be paid first.

If there are resources for burial in the amount of $5,000 then it is considered cost effective to pursue if there are assets in the estate.

7. The State uses the following collection procedures (include specific elements contained in the advance action notice requirement, the method for applying for a waiver, hearing and appeals procedures, and time frames involved):

The State distributes a pamphlet, outlining estate recovery procedures, at the time of application to all applicants for long-term care services.

All persons receiving or applying for Long Term Care Medicaid Services are advised in writing about the estate recovery policy of DHSS at the time of application and redetermination, via the ERL1.DOC form titled, Recovery and Lien Policy for Persons Receiving or Applying for Long Term Care Services. This form outlines the following:

• Explanation of estate recovery, including citations of the federal and state authority;

• Defines long-term care;

• Describes the circumstances under which DHSS will file a claim;

• Describes what constitutes undue hardship. Exclusion and hardship waiver conditions are listed on page 2 of this form titled, Request for Exclusion or Hardship Waiver;

• Specifies which Medicaid payments DHSS will seek to recover; and,

• Appeal procedures, specifically notifying recipient/applicant that “If you are dissatisfied with any decision made by the Department of Health and Social Services, you have the right to appeal the decision by requesting a fair hearing. You must submit a written request to the local DHSS office within 90 days of the action”.

DSS PROPOSED REGULATION #05-64c

REVISIONS:

20310.1.1 Intent to Return

The principal place of residence may be excluded if the individual intends to return home after any length of time.

Temporary Institutionalization - If the attending physician has certified that a recipient is likely to return to his own home within a definite period (not to exceed 6 2 months) up to $75.00 per month may be protected for maintenance of the home.

(Break In Continuity of Sections)

20500.5.2 Lien Recovery Exceptions

DHSS shall not seek recovery in the case of a lien on an individual’s home when there is:

a son or daughter over the age of 21 lawfully residing in the home of the recipient, who has resided there for a period of at least two years immediately prior to the date of the recipient’s admission to a long-term care service, who has lawfully resided there on a continuous basis since that time, and who can establish to the Department’ssatisfaction that he or she provided the care that permitted the recipient to reside in the home rather than in a long-term care facility

or

Sibling lawfully residing in the home of the recipient for 2 years (24 months) one (1) year (12 months) immediately prior to the recipient’s admission for long term care services.

NOTE: DHSS can seek recovery from other assets in the estate.

(Break In Continuity of Sections)

20500.6.1 Exceptions to the Lien Policy

1. Clients intending to return home within 2 years sixty (60) days of their admission date to a facility.

a) If the stay in the facility is 2 years sixty (60) days or more, DHSS will determine if medical documentation indicates the client can reasonably be expected to return home, taking into consideration such factors as length of stay in a facility, mental capacity and physical condition place a lien on the property.

b) DHSS will provide the recipient of notice of the medical evaluation to determine if the recipient can return home. The results of the medical evaluation will also be provided to the recipient with the opportunity for a fair hearing before the department. The lien on the property will be released if the patient is discharged after sixty (60) days and returns to live in the home.

2. DHSS will not file a lien as long as the following individuals lawfully resided in the home before the date of application for long-term care services and continue to reside in the home while the applicant receives long-term care services:

a) Husband or wife of the applicant or recipient (NOTE: Common law marriages are not recognized by the Courts of Delaware).

b) Son or daughter who is blind or disabled as defined in accordance with the disability rule of the federally administered Supplemental Security Income (Title XVI of the Social Security Act).

c) Child under age 21 who is lawfully residing in the home.

d) Sibling lawfully residing in the home for 2 years (24 months) one (1) year (12 months) immediately prior to admission to a long term care facility and who has equity in the property.

3. DHSS will also not file a lien if the real property that is held in ownership with children, grandchildren, siblings or parents constitutes a business, which contributes to the livelihood of that other individual or his/her dependents or heirs.

(Break In Continuity of Sections)

20620.3 Community Spouse Income Allowance/Home Maintenance Disregard

Temporary Institutionalization - If the attending physician has certified that a recipient is likely to return to his own home within a definite period (not to exceed 6 2 months) up to $75.00 per month may be protected for maintenance of the home. This allowance may be used for mortgage payments, rent, insurance, utility bills, repairs, etc. Copies of receipts, contracts or other types of verification shall be obtained and kept in the DSS record.

The $75 home maintenance disregard may not be allowed if the community spouse is receiving the spousal income allowance.

9 DE Reg. 684 (11/01/05) (Prop.)