2006 Legislation
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SENATE BILL NO. 1318 – Medical asst costs, recovery

SENATE BILL NO. 1318

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Bill Status



S1318................................................by JUDICIARY AND RULES
ESTATES - MEDICAL ASSISTANCE COSTS - Amends existing law relating to estate
property to set forth provisions applicable to the recovery of medical
assistance costs by the Department of Health and Welfare; and to revise
provisions applicable to the recovery of certain medical assistance.
                                                                        
01/30    Senate intro - 1st rdg - to printing
01/31    Rpt prt - to Jud
02/09    Rpt out - rec d/p - to 2nd rdg
02/10    2nd rdg - to 3rd rdg
02/14    3rd rdg - PASSED - 35-0-0
      AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
      Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
      Fulcher, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough,
      Langhorst, Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce,
      Richardson, Schroeder, Stegner, Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - Kelly
    Title apvd - to House
02/15    House intro - 1st rdg - to Jud
03/06    Rpt out - rec d/p - to 2nd rdg
03/07    2nd rdg - to 3rd rdg
03/16    3rd rdg - PASSED - 64-0-6
      AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer, Bell,
      Bilbao, Black, Block, Boe, Bolz, Brackett, Bradford, Cannon,
      Chadderdon, Clark, Collins, Deal, Denney, Edmunson, Ellsworth,
      Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest,
      Henderson, Jaquet, Kemp, Lake, LeFavour, Loertscher, Martinez,
      Mathews, McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen,
      Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche,
      Rydalch, Sali, Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley,
      Skippen, Smith(30), Smith(24), Smylie, Stevenson, Trail
      NAYS -- None
      Absent and excused -- Bedke, Crow, Snodgrass, Wills, Wood, Mr.
      Speaker
    Floor Sponsor - Smith(24)
    Title apvd - to Senate
03/17    To enrol
03/20    Rpt enrol - Pres signed - Sp signed
03/21    To Governor
03/24    Governor signed
         Session Law Chapter 179
         Effective: 07/01/06

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1318
                                                                        
                              BY JUDICIARY AND RULES COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO ESTATE PROPERTY; AMENDING SECTION 15-3-1201, IDAHO  CODE,  TO  SET
  3        FORTH PROVISIONS APPLICABLE TO THE RECOVERY OF MEDICAL ASSISTANCE COSTS BY
  4        THE  DEPARTMENT  OF  HEALTH AND WELFARE AND TO MAKE TECHNICAL CORRECTIONS;
  5        AMENDING SECTION 56-218, IDAHO CODE, TO REVISE  PROVISIONS  APPLICABLE  TO
  6        THE  RECOVERY OF CERTAIN MEDICAL ASSISTANCE; AND AMENDING SECTION 56-218A,
  7        IDAHO CODE, TO REVISE A CODE REFERENCE.
                                                                        
  8    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  9        SECTION 1.  That Section 15-3-1201, Idaho Code, be, and the same is hereby
 10    amended to read as follows:
                                                                        
 11        15-3-1201.  COLLECTION OF PERSONAL PROPERTY BY AFFIDAVIT. (a) Thirty  (30)
 12    days  after  the  death  of a decedent, any person indebted to the decedent or
 13    having possession of tangible personal property or an instrument evidencing  a
 14    debt,  obligation,  stock  or  chose in action belonging to the decedent shall
 15    make payment of the indebtedness or deliver the tangible personal property  or
 16    an  instrument  evidencing  a  debt, obligation, stock or chose in action to a
 17    person or entity claiming to be the successor of the decedent upon being  pre-
 18    sented an affidavit made by or on behalf of the successor stating that:
 19        (1)  tThe  fair market value of the entire estate of the decedent which is
 20        subject to probate, wherever located, less liens  and  encumbrances,  does
 21        not exceed seventy-five thousand dollars ($75,000);
 22        (2)  tThirty (30) days have elapsed since the death of the decedent;
 23        (3)  nNo  application or petition for the appointment of a personal repre-
 24        sentative or for summary administration is pending or has been granted  in
 25        any jurisdiction; and
 26        (4)  tThe  claiming  successor  is  entitled to payment or delivery of the
 27        property, including entitlement as a trust pursuant to a will of the dece-
 28        dent.
 29        (b)  A transfer agent of any security shall change the  registered  owner-
 30    ship  on the books of a corporation from the decedent to the successor or suc-
 31    cessors upon the presentation of an affidavit as provided in subsection (a) of
 32    this section.
 33        (c)  For the purposes of this section, for the recovery of medical  assis-
 34    tance, the department of health and welfare shall be deemed a successor to the
 35    estate provided:
 36        (1)  Prior to the presentation of the affidavit, the department shall give
 37        notice,  by  regular  mail, to any person known to the department to be an
 38        heir, successor or creditor of the estate, and the department  shall  cer-
 39        tify  such  notice in writing to the person described in subsection (a) of
 40        this section.
 41        (2)  Within sixty (60) days of mailing the notice, any person  who  claims
 42        the  right  to reimbursement for priority estate expenses, as permitted by
 43        section 15-3-805(a)(1) through (4),  Idaho  Code,  may  submit  a  written
                                                                        
                                           2
                                                                        
  1        demand  for  payment  of such expenses, together with any documentation of
  2        the expenses, to the department. Upon receipt of the funds, and up to  the
  3        amount  received, the department shall pay priority claims which it deter-
  4        mines would be allowed in a probate proceeding,  if  any.  The  department
  5        shall notify each claimant of the disposition of his claim. The provisions
  6        of chapter 52, title 67, Idaho Code, shall apply to determinations made by
  7        the department under this section.
                                                                        
  8        SECTION  2.  That  Section  56-218, Idaho Code, be, and the same is hereby
  9    amended to read as follows:
                                                                        
 10        56-218.  RECOVERY OF CERTAIN MEDICAL ASSISTANCE. (1) Except where exempted
 11    or waived in accordance with federal law medical assistance pursuant  to  this
 12    chapter  paid  on behalf of an individual who was fifty-five (55) years of age
 13    or older when the individual received such assistance may  be  recovered  from
 14    the  individual's  estate,  and the estate of the spouse, if any, for such aid
 15    paid to either or both; provided, however, that claim for such medical  assis-
 16    tance  correctly  paid to the individual may be established against the estate
 17    of either spouse, but:
 18        (a)  Tthere shall be no adjustment or recovery  thereof  until  after  the
 19        death  of  both  the individual and the spouse, if any, and only at a time
 20        when the individual has no surviving child who is  under  twenty-one  (21)
 21        years of age or is blind or permanently and totally disabled as defined in
 22        42 U.S.C. 1382c.
 23        (b)  While  one  (1)  spouse  survives, except where joint probate will be
 24        authorized pursuant to section 15-3-111, Idaho Code, a claim for  recovery
 25        under  this  section  may  be  established  in  the estate of the deceased
 26        spouse.
 27        (c)  The claim against the estate of the first  deceased  spouse  must  be
 28        made  within  the time provided by section 15-3-801(b), Idaho Code, if the
 29        estate is administered and actual notice  is  given  to  the  director  as
 30        required by subsection (5) of this section. However, if there is no admin-
 31        istration  of  the  estate  of  the first deceased spouse, or if no actual
 32        notice is given to the director as required by subsection (5) of this sec-
 33        tion, no claim shall be required until  the  time  provided  for  creditor
 34        claims in the estate of the survivor.
 35        (d)  Nothing  in this section authorizes the recovery of the amount of any
 36        aid from the estate or surviving spouse of a recipient to the extent  that
 37        the need for aid resulted from a crime committed against the recipient.
 38        (2)  Transfers  of  real  or  personal property, on or after the look-back
 39    dates defined in 42 U.S.C. 1396p, by recipients of such aid, or their spouses,
 40    without adequate consideration are voidable and may be set aside by an  action
 41    in the district court.
 42        (23)  Except  where  there is a surviving spouse, or a surviving child who
 43    is under twenty-one (21) years of age or is blind or permanently  and  totally
 44    disabled  as  defined in 42 U.S.C. 1382c, the amount of any medical assistance
 45    paid under this chapter on behalf of an individual  who  was  fifty-five  (55)
 46    years  of age or older when the individual received such assistance is a claim
 47    against the estate in any guardianship or conservatorship proceedings and  may
 48    be paid from the estate.
 49        (3)  Nothing  in this section authorizes the recovery of the amount of any
 50    aid from the estate or surviving spouse of a recipient to the extent that  the
 51    need for aid resulted from a crime committed against the recipient.
 52        (4)  For purposes of this section, the term "estate" shall include:
 53             (a)  All  real and personal property and other assets included within
                                                                        
                                           3
                                                                        
  1             the individual's estate, as defined for  purposes  of  state  probate
  2             law; and
  3             (b)  Any  other  real and personal property and other assets in which
  4             the individual had any legal title or interest at the time  of  death
  5             (to the extent of such interest), including such assets conveyed to a
  6             survivor,  heir,  or  assign of the deceased individual through joint
  7             tenancy, tenancy in common, survivorship, life estate,  living  trust
  8             or other arrangement.
  9        (5)  Claims made pursuant to this section shall be classified and paid as
 10    a debt with preference as defined in section 15-3-805(5), Idaho Code. Any dis-
 11    tribution or transfer of the estate prior to satisfying such claim is voidable
 12    and  may  be set aside by an action in the district court. The personal repre-
 13    sentative of every estate subject to a claim under this section  must,  within
 14    thirty (30) days of the appointment, give notice in writing to the director of
 15    his  or  her appointment to administer the estate. However, if an exempt prop-
 16    erty allowance claim is made in an estate subject to a claim under  this  sec-
 17    tion  by  one (1) or more persons not described in subsection (2) of this sec-
 18    tion, then, to the extent such exempt property  allowance  claim  exceeds  the
 19    fair  market value of the actual personal property of the decedent held by the
 20    estate subject to a claim under this section (including, but not  limited  to,
 21    such  items  as household furniture, automobiles, furnishings, appliances, and
 22    personal effects), the persons making such  exempt  property  allowance  claim
 23    must  file with the court, and with the personal representative or administra-
 24    tor of the estate, and with the department, a  written  statement  under  oath
 25    containing the following:
 26        (a)  A statement that no personal property of the decedent has been trans-
 27        ferred  without  adequate consideration to any person or entity, including
 28        any one (1) or more of the persons making the  exempt  property  allowance
 29        claim,  to  the  actual  knowledge of any of the persons making the exempt
 30        property allowance claim, within a time period  commencing  one  (1)  year
 31        prior  to  the  death of the decedent and ending on the date of the state-
 32        ment; or
 33        (b)  A statement that personal property of the decedent  has  been  trans-
 34        ferred  without  adequate consideration to any person or entity, including
 35        one (1) or more of the persons making the exempt property allowance claim,
 36        within a time period commencing one (1) year prior to  the  death  of  the
 37        decedent  and ending on the date of the statement, to the actual knowledge
 38        of any of the persons making the  exempt  property  allowance  claim,  and
 39        stating the fair market value of the personal property so transferred, and
 40        stating  a reasonable description of such property, and stating the method
 41        of determining the fair market value of the personal  property  so  trans-
 42        ferred.
 43    If the written statement indicates that there has been such a transfer of per-
 44    sonal  property, then the fair market value of the personal property so trans-
 45    ferred shall be subtracted from the remaining exempt property allowance claim,
 46    after subtraction of the personal property held by the  estate,  as  described
 47    above,  and  only any still remaining portion of the exempt property claim may
 48    be paid by the estate to the persons  making  the  exempt  property  allowance
 49    claim.  The statement submitted under paragraph (a) or (b) of this subsection,
 50    must be signed under oath by all persons making the exempt property claim.
 51        (6)  The department may file a notice of lien against the property of  any
 52    estate subject to a claim under this section.
 53        (a)  In  order  to  perfect  a lien against real or personal property, the
 54        department shall, within ninety (90) days after the  personal  representa-
 55        tive  or successor makes a written request for prompt action to the direc-
                                                                        
                                           4
                                                                        
  1        tor, or three (3) years from the death of the individual for whom  medical
  2        assistance was paid under this chapter decedent, whichever is sooner, file
  3        a  notice  of lien in the same general form and manner as provided in sec-
  4        tion 56-218A(3)(a), Idaho Code, in the office of the secretary  of  state,
  5        pursuant  to section 45-1904, Idaho Code. Failure to file a notice of lien
  6        does not affect the validity of claims made pursuant to this section.
  7        (b)  The department may release the lien in whole or in part to permit the
  8        estate property to be administered by a court-appointed personal represen-
  9        tative.
 10        (c)  The department may foreclose its lien, without probate, in any of the
 11        following circumstances:
 12             (i)   Where no personal representative has been appointed  after  one
 13             (1)  year from the date of death of the survivor of both the individ-
 14             ual and spouse, if any;
 15             (ii)  Where the property has been abandoned by the  decedent's  heirs
 16             or successors, if any;
 17             (iii) Where  the  real  property  taxes that are due and payable have
 18             remained unpaid for two (2) years and, after demand  by  the  depart-
 19             ment,  the  heirs or successors, if any, have failed to seek appoint-
 20             ment or pay the property taxes; or
 21             (iv)  Where all parties interested in the estate consent to  foreclo-
 22             sure of the lien.
 23        (7)  The director shall promulgate rules reasonably necessary to implement
 24    this  section including, but not limited to, rules establishing undue hardship
 25    waivers for the following circumstances:
 26        (a)  The only asset of the estate subject to recovery is  income-producing
 27        property that provides the primary source of support for other family mem-
 28        bers; or
 29        (b)  The estate has a value below an amount specified in the rules; or
 30        (c)  Recovery  under  the  lien  by  the department will entitle cause the
 31        heirs of the deceased individual to be eligible for public assistance.
 32        (8)  The cause of action to void a transfer without adequate consideration
 33    established in this section shall not be deemed  to  have  accrued  until  the
 34    department  discovers,  or reasonably could have discovered, the facts consti-
 35    tuting the transfer without adequate consideration.
                                                                        
 36        SECTION 3.  That Section 56-218A, Idaho Code, be, and the same  is  hereby
 37    amended to read as follows:
                                                                        
 38        56-218A.  MEDICAL  ASSISTANCE  LIENS  DURING  LIFE  OF  RECIPIENT. (1) The
 39    department may recover and may impose a lien against the real property of  any
 40    individual  prior to his death for medical assistance paid or about to be paid
 41    under this chapter on behalf of an individual:
 42        (a)  Who is an inpatient in a nursing facility, intermediate care facility
 43        for the mentally retarded, or other medical institution, if such  individ-
 44        ual  is required, as a condition of receiving services in such institution
 45        under the state plan, to spend for costs of medical care all but a minimal
 46        amount of his income required for personal needs; and
 47        (b)  With respect to whom the department has determined, after notice  and
 48        opportunity  for hearing, that he cannot reasonably be expected to be dis-
 49        charged from the medical institution and to return home.
 50        (2)  No lien may be imposed on the home of an individual under  subsection
 51    (1) of this section if any of the following is lawfully residing in such home:
 52        (a)  The spouse of such individual;
 53        (b)  Such individual's child under age twenty-one (21) years;
                                                                        
                                           5
                                                                        
  1        (c)  Such  individual's child who is blind or permanently and totally dis-
  2        abled as defined in 42 U.S.C. 1382c; or
  3        (d)  A sibling of such individual who holds an  equity  interest  in  such
  4        home  and  who  was residing in such home for a period of at least one (1)
  5        year prior to the individual's admission to the medical institution.
  6        (3)  (a) The lien shall be perfected by filing in the office of the secre-
  7        tary of state a notice of lien pursuant to section  45-1904,  Idaho  Code.
  8        The  notice of lien shall include, in addition to the information required
  9        by section 45-1904, Idaho Code, the amount paid or about to be paid by the
 10        department on behalf of the individual, and, if applicable, the fact  that
 11        the amount of the lien may increase over time.
 12        (b)  The  department  shall  file  any  notice  of lien under this section
 13        within ninety (90) days of the  final  determination  of  the  department,
 14        after  hearing if any, required in subsection (1)(b) of this section, with
 15        the exception of property against which the department is  prevented  from
 16        filing  a lien pursuant to subsection (2) of this section. With respect to
 17        the property described in subsection (2) of this section,  the  department
 18        shall  file  a notice of lien within ninety (90) days after the department
 19        is notified in writing that subsection (2) of this section ceases to apply
 20        to the property.
 21        (4)  Any lien imposed in accordance with subsection (1)  of  this  section
 22    shall  dissolve  upon  the individual's discharge from the medical institution
 23    and return home.
 24        (5)  No recovery shall be made under this section for  medical  assistance
 25    correctly  paid  except from such individual's estate as defined in subsection
 26    (4) of section 56-218, Idaho Code, and subject to subsections (31)(d), (5) and
 27    (6) of section 56-218, Idaho Code, or upon sale of the property subject  to  a
 28    lien  and  may  be  made  only  after the death of such individual's surviving
 29    spouse, if any, and only at a time:
 30        (a)  When he has no surviving child  who  is  under  age  twenty-one  (21)
 31        years,  or  who is blind or permanently and totally disabled as defined in
 32        42 U.S.C. 1382c; or
 33        (b)  In the case of a lien on an individual's home under subsection (1) of
 34        this section, when none of the following is lawfully residing in such home
 35        who has lawfully resided in such home on a continuous basis since the date
 36        of the individual's admission to the medical institution:
 37             (i)   A  sibling  of  the  individual,  who  was  residing   in   the
 38             individual's  home  for a period of at least one (1) year immediately
 39             before the date of the individual's admission to the medical institu-
 40             tion; or
 41             (ii)  A son or daughter of the individual, who was  residing  in  the
 42             individual's  home for a period of at least two (2) years immediately
 43             before the date of the individual's admission to the medical institu-
 44             tion and who establishes to the satisfaction of the state that he  or
 45             she  provided care to such individual which permitted such individual
 46             to reside at home rather than in an institution.
 47        (6)  The director shall promulgate rules reasonably necessary to implement
 48    this section including, but not limited to, rules establishing undue  hardship
 49    waivers,  as  provided  in  section 56-218(7), Idaho Code, and a procedure for
 50    notice and opportunity for hearing on the department's determination  that  an
 51    individual  cannot  reasonably  be  expected  to  be discharged from a medical
 52    institution and to return home.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                             RS 15741

This bill clarifies how the Medicaid Estate Recovery division of
Health & Welfare can recover assets from the estate of a decedent
and clears up a number of uncertain areas of law.

Section One covers the Small Estate Affidavit, which allows a
"successor" of the decedent to obtain personal property assets
held by third parties (bank accounts, stocks, etc.) by use of an
affidavit, within the limits set forth in the statute.  This bill
allows the Department of Health & Welfare to be a successor if:
     1.  The Department has a claim for estate recovery against
     the decedent;
     2.  the Department gives notice, by regular mail, to any
     person known to the department to be an heir, successor, or
     creditor of the estate, and the department certifies that
     notice in writing to the person described in paragraph (a)
     of the section, the normal successor; and,
     3.  The Department reimburses all priority claims under the
     probate code which are presented within sixty days after the
     notice.
Use of this procedure is far less expensive than filing a full
probate proceeding.

Section Two amends Idaho Code 56-218 to clarify the presentation
and collection of estate recovery claims by Health & Welfare.  A
number of clarifications are made by repositioning language or
stating the existing concept more clearly.  Under existing law,
if the institutionalized spouse, who received Medicaid, dies
leaving a surviving spouse, no actual collection is made, but a
"claim" must be sent to the personal representative of the estate
of deceased institutionalized spouse, or if no probate is done,
to the surviving spouse.  This can be very frightening to the
surviving spouse, who often does not understand that no current
reimbursement is being demanded.  Therefor, the bill both
clarifies that no recovery is made until both spouses are
deceased and also removes the requirement to send a claim if no
probate is filed at the first death.

The bill also clarifies how the lien filed by the Department with
the Secretary of State may be released, in order to allow sale of
the property by the estate, or foreclosed, to expedite estate
recovery when the real estate has been abandoned or has real
property taxes overdue which may be foreclosed upon or where no
probate has been filed and all heirs agree to the procedure as an
alternative to probate.

Section Three only corrects a cross-reference.



                           FISCAL NOTE

This bill will have no fiscal impact, except that it may reduce
the costs of estate recovery to the Department of Health &
Welfare.




Contact
Name: Robert L. Aldridge, Trust & Estate Professionals of Idaho, Inc. 
Phone: 208-336-9880
Cell:  208-631-2481


STATEMENT OF PURPOSE/FISCAL NOTE                        S 1318