Current through Register Vol. 50, No. 6, December 1, 2023
RELATES TO:
KRS
205.520,
205.619,
304.14-640,
42 C.F.R. 430.10,
435.236,
42
U.S.C. 1396p(b)(1)-(4)
NECESSITY, FUNCTION, AND CONFORMITY: The Cabinet for Health
and Family Services, Department for Medicaid Services has responsibility to
administer the Medicaid Program.
KRS
205.520(3) empowers the
cabinet, by administrative regulation, to comply with any requirement that may
be imposed or opportunity presented by federal law for the provision of medical
assistance to Kentucky's indigent citizenry.
42
U.S.C. 1396p(b)(1)-(4)
establishes minimum requirements for state plans for estate recovery actions.
This administrative regulation establishes provisions relating to estate
recovery.
Section 1. Definitions.
(1) "Aged institutionalized individual" means
a recipient age fifty-five (55) or older who received nursing facility (NF)
services, intermediate care facility for individuals with an intellectual
disability (ICF-IID) services, home and community based (HCB) waiver services,
supports for community living (SCL) services, acquired brain injury (ABI)
waiver services, ABI long-term care waiver services, or Michelle P. waiver
services with payment for these services made, wholly or in part, by the
Medicaid Program.
(2) "Department"
means the Department for Medicaid Services or its designee.
(3) "Estate" means:
(a) All real and personal property or other
assets owned by the deceased recipient that would be included as probate
property under Kentucky law; and
(b) All real and personal property or other
assets in which the deceased recipient had legal title or interest at the time
of death, to the extent of the recipient's interest, whether the asset was
conveyed to a survivor, heir or assign of the deceased recipient through joint
tenancy, tenancy in common survivorship, life estate, living trust or other
arrangement.
(4) "Estate
representative" means the court appointed fiduciary or the fiduciary's
attorney, the recipient family member or other interested party who represents
to the department in writing that he or she is the representative for the
estate.
(5) "Long-term care
partnership insurance" is defined by
KRS
304.14-640(4).
(6) "Long-term care partnership insurance
policy" means a policy meeting the requirements established in
KRS
304.14-642(2).
(7) "Period of institutionalization" means
the period of time an aged institutionalized or permanently institutionalized
individual received Medicaid services.
(8) "Permanently institutionalized" means
residing in a nursing facility or intermediate care facility for individuals
with an intellectual disability for six (6) months or more.
(9) "Recipient family member" means the
surviving spouse, child or sibling of a deceased recipient.
(10) "State plan" is defined by
42 C.F.R.
400.203.
(11) "Surviving child" means a living child
under age twenty-one (21) or a child who is blind or disabled as defined in
42
U.S.C. 1382c.
Section 2. Recovery.
(1) The department shall seek recovery from
the estate of a deceased recipient for a period of
institutionalization.
(2) The
amount recovered shall not exceed the amount paid by the Medicaid Program on
behalf of the deceased recipient for services received during a period of
institutionalization.
(3) The
amount subject to recovery shall include:
(a)
The expenditures for:
1. NF services pursuant
to
907
KAR 1:022;
2. ICF-IID services pursuant to
907
KAR 1:022;
3. Home and community based (HBC) waiver
services pursuant to
907 KAR
1:160;
4.
Supports for community living (SCL) services pursuant to
907
KAR 1:145;
5. Acquired brain injury (ABI) waiver
services pursuant to
907 KAR
3:090;
6.
ABI long-term care waiver services pursuant to
907
KAR 3:210; or
7. Michelle P. waiver services pursuant to
907 KAR
1:835; or
(b) Other costs for:
1. Related prescription drugs, hospital
services, and related physician services; or
2. Medicare cost sharing or Medicare
premiums.
(4)
The amount subject to recovery shall include a capitation payment made by the
Medicaid Program to a managed care organization on behalf of the deceased
recipient.
Section 3.
Exemptions and Limitations.
(1) Recovery
shall not be made from the estate if the estate representative can verify to
the department's satisfaction that there is a:
(a) Surviving spouse; or
(b) Surviving child.
(2) Recovery shall not be made from the
estate on any resources protected from consideration during the eligibility
determination process based on payment issued by a long-term care partnership
insurance policy.
(3) The
department shall waive estate recovery to the extent the recovery would work an
undue hardship.
(a) Undue hardship shall exist
if an asset subject to recovery is the sole income-producing asset, for example
a family farm or business, conveyed to the surviving recipient family member. A
sole income-producing asset shall not include residential real property
producing income through a lease or rental arrangement.
(b) The estate representative shall apply for
an undue hardship exemption by:
1. Making a
written request to the department within thirty (30) days of receipt of the
notice provided in accordance with Section 7(3)(a) of this administrative
regulation; and
2. Verifying to the
department's satisfaction that the criteria specified in paragraph (a) of this
subsection exists for an undue hardship.
(c) The department shall issue a decision on
an undue hardship exemption request within thirty (30) days of receipt of the
request and supporting documentation.
(d)
1. If
the department denies the estate representative's request for an undue hardship
exemption, the estate representative may request an appeal.
2. If an appeal is requested, an
administrative hearing shall be conducted in accordance with
907
KAR 1:563, Section 4, and KRS Chapter
13B.
(e) The department
shall not conclude that an undue hardship exists if the deceased recipient
created the hardship by resorting to estate planning methods under which the
recipient illegally divested assets to avoid estate
recovery.
(4)
(a) The department may waive recovery if it
is not cost effective to recover from the estate.
(b) The department shall not consider it to
be cost effective to recover from an estate if the total date-of-death value of
the estate subject to recovery is:
1. Less
than the administrative cost of recovering from the estate; or
2. $10,000 or
less.
(5)
(a) The department may grant an exemption of
the recovery provisions on a case-by-case basis to the extent of the
anticipated cost of continuing education or health care needs of an estate
heir.
(b) The estate representative
shall submit to the department a written request for an exemption and provide
verification to the satisfaction of the department.
(6)
(a) A
deceased recipient's estate shall be subject to recovery of Medicaid Program
expenditures to the extent it is adjudicated through a final administrative
appeal process or court action that the recipient qualified for Medicaid
fraudulently.
(b) If the recipient
qualified for Medicaid fraudulently, the exemptions or limitations established
in this section shall not apply.
Section 4. Notification.
(1) A general written notice regarding estate
recovery shall be provided by the department to an aged institutionalized or
permanently institutionalized individual, or an authorized representative
acting on his or her behalf, at the time the individual requests coverage of NF
services, ICF-IID services, HCB waiver services, SCL services, ABI waiver
services, ABI long-term care waiver services, or Michelle P. waiver services
under the Medicaid Program.
(2)
When an aged institutionalized or permanently institutionalized individual who
is receiving NF services, ICF-IID services, HCB waiver services, SCL services,
ABI waiver services, ABI long-term care waiver services, or Michelle P. waiver
services under the Medicaid Program dies, the Medicaid provider from which the
recipient was receiving institutionalized services at the time of death shall
be responsible for reporting the death to the local Department for Community
Based Services office within ten (10) days of the date of death.
(3)
(a) Upon
receipt of the notice of death specified in subsection (2) of this section, the
department shall prepare and serve written notice of its intent to recover upon
the estate representative.
(b) The
estate representative shall be responsible for notifying individuals who are
affected by the proposed recovery.
(c) If no estate representative exists,
notice shall be provided to the family members or heirs if the recipient has
provided the department with this information through the eligibility
application process.
(4)
The notice of intent to recover shall include:
(a) The action the department intends to
initiate;
(b) The reason for the
action;
(c) Exemptions and
limitations to estate recovery as specified in Section 3 of this administrative
regulation;
(d) Conditions that are
considered an undue hardship exemption as specified in Section 3(3) of this
administrative regulation;
(e)
Procedures for applying for an undue hardship exemption as specified in Section
3(3) of this administrative regulation;
(f) The total amount subject to recovery;
and
(g) The procedure for appealing
a denial of an undue hardship exemption request.
20 Ky.R. 1741;
2348; eff. 2-2-1994; 22 Ky.R. 632; eff. 10-19-1995; 1114; 1531; eff. 1-5-2004;
35 Ky.R. 1637; 1802; 2747; eff. 7-6-2009; TAm 7-16-2013; TAm 9-26-14; Crt eff.
12-6-2019.
STATUTORY AUTHORITY:
KRS
194A.030(2),
194A.050(1),
205.520(3),
EO 2004-726