DPSS ePolicy

To convert existing policy to new webpage – No content changes.

What changed?

1. Estate Recovery (ER) rules will change for certain Medi-Cal (MC) beneficiaries beginning January 1, 2017;
2. The Department of Health Care Services (DHCS) released a revised ER brochure and Notice regarding the ER program.

The MC program pays for medical services and premiums, including payments to managed care plans, for beneficiaries who are unable to pay for their own care.

After a MC beneficiary passes away, the State may collect the cost of MC services paid by Medi-Cal on behalf of the beneficiary.  Collection applies for services received ON or AFTER the beneficiary’s 55th birthday.

For Date of Death on or before December 31,2016, the Recoverable Services are:

1. Nursing facilty services;
2. Home and community-based services;
3. Health insurance premiums, including Medicare Part A and Delta Dental premiums.

For Date of Death on or after January 1, 2017, the Recoverable Services are:

1. Nursing facilty services;
2. Home and community-based services;
3. Hospital and prescription drug services provided to a Medi-Cal beneficiary who was receiving nursing facility services and/or home and community-based services.

Claims for benefits paid by MC may not be made until after the death of the beneficiary.  Claims are limited to the fair market value of the deceased person’s assets at the time of death, less encumbrances, or the amount of the medical services paid by MC whichever is less.

On June 27, 2016, Senate Bill (SB) 833 was signed into law.  SB 833 changes the ER rules for MC beneficiaries who pass away on or after January 1, 2017.

Note:  SB 833 does not change ER rules for MC beneficiaries who pass away on or before December 31, 2016.

Beneficiary Notification

The State sends all MC recipients the DHCS 9060 Notice (English, Spanish) describing the ER program and informing them that MC may make a claim against any assets owned by the MC beneficiary at the time of his/her death.

ER claims initiated by the State include all benefits paid on behalf of the deceased MC beneficiary including, but not limited to:

The State does not make claims for:

1. In Home Supportive Services funds paid on behalf of a Medi-Cal beneficiary;
2. Medicare premiums for Qualified Medicare Beneficiary (QMB)/Specified Low Income Medicare Beneficiary (SLMB) beneficiaries;
3. Medicare co-payments and deductibles paid on behalf of QMB/SLMB beneficiaries.

Surviving Spouse or Registered Domestic Partner Exemption

For Medi-Cal beneficiaries who die on or after January 1, 2017, DHCS is prohibited from recovering from the estate of a deceased Medi-Cal beneficiary who is survived by a spouse or registered domestic partner.

Liens

Liens are limited to the cost of Medi-Cal claims paid or to be paid, on the beneficiary’s behalf.

• If a MC beneficiary is admitted to an LTC facility, then a lien may be recorded and a request for the property be sold is made.
  
  
• If the MC beneficiary in an LTC facility indicates an intent to return to the principal residence, even if the return is not likely, then lien will not be recorded.
  
  Note:  The State may still make a claim against the estate of the beneficiary following the beneficiary's death.
  
  
• If a lien has been recorded and the beneficiary is discharged from the LTC facility at any point prior to the sale of the property, and returns to the principal residence, then lien will be removed. Note:  The State may still make a claim against the estate of the beneficiary following the beneficiary's death.
  
  
• If a MC beneficiary passes away and there is:
  
  
  1. a surviving spouse/registered domestic partner, dependent relative, or co-owner residing in the home; 
  2. a surviving child under the age of 21; 
  3. a surviving child of any age who is blind or disabled; 
  4. a sibling with equity interest in the home resided in the home for one year immediately prior to the date of the beneficiary's admission to the medical institution and continues to lawfully reside there.

then a lien will not be recorded.

Voluntary Repayments

Voluntary repayments from a Medi-Cal beneficiary for medical assistance paid, or to be paid, on his/her behalf prior to his/her death may not be accepted.

The sale of a deceased beneficiary’s home in order to pay the estate claim is usually not necessary.  If one or more of the dependents, heirs, or survivors (distributee), is unable to pay the State’s claim in full, and can demonstrate he/she is unable to get a loan to pay the claim, the State may offer to accept a post-death lien against the home.

However, the acceptance of a post-death lien by the dependent, heir, or survivor of a deceased Medi-Cal beneficiary is voluntary.

Interest Changes for Voluntary Post Death Liens

For Medi-Cal members who die on or after January 1, 2017, if DHCS proposes and accepts a voluntary post-death lien, the voluntary post death lien shall accrue interest at a rate determined by DHCS.

Hardship Waivers

For MC beneficiaries who pass away on or after January 1, 2017, SB 833 allows DHCS to waive its claim against the estate of the beneficiary, in whole or in part, if DHCS determines that enforcement of the claim would result in substantial hardship to other dependents, heirs, or survivors of the deceased.

To request a hardship waiver, the dependent, heir, or survivor of the deceased MC beneficiary must submit an Application for Hardship Waiver (DHCS 6195), to DHCS within 60 days of the date on the ER claim letter and provide verification that one or more of the hardship waiver criteria apply.

If the waiver request is denied, the applicant has the right to appeal through an estate hearing.

Hardship Waiver Criteria

The State is not allowed to pursue repayment:

1. During the lifetime of a surviving spouse, and beginning January 1, 2017, also during the lifetime of a registered domestic partner;
2. If the Medi-Cal beneficiary is survived by a child who was younger than 21 when the beneficiary died;
3. If the Medi-Cal beneficiary is survived by a child of any age who is blind or disabled (as defined by the federal Social Security Act) as of the date of the Estate Recovery claim.

DHCS may use a number of factors in determining if a substantial hardship exists and may waive its claim when the estate involves a “Homestead of Modest Value”.

Access to Estimated Recoverable Medi-Cal Expenses

Upon request, DHCS must provide a Medi-Cal beneficiary who is either over the age of 55 or a permanent inpatient of a nursing or LTC facility with a copy of the amount of Medi-Cal expenses that may be recoverable upon the beneficiary’s death.

Medi-Cal beneficiaries can request this information once per calendar year for a fee of $5 (five dollars).  The process to request this information will be available on the Medi-Cal ER program’s website at Estate Recovery.

California Partnership for Long-Term Care (LTC)

The California Partnership for LTC is a program whereby the State has entered into a partnership with California residents and a select number of private insurance companies to offer LTC insurance policies that include, at no additional cost to the purchaser, a special asset protection feature.

ER Brochure

The State has revised the MC ER brochure which provides information and answers to the most frequently asked questions about the Estate Recovery Program.

If there are additional questions, beneficiaries may be referred to the Estate Recovery Section at (916) 650-0590.