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SB-0374, As Passed Senate, September 27, 2007

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 374

A bill to amend 1939 PA 280, entitled

"The social welfare act,"

(MCL 400.1 to 400.119b) by adding sections 112g, 112h, 112i, 112j,

and 112k.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 112g. (1) Subject to section 112c(5), the department of

community health shall establish and operate the Michigan medicaid

estate recovery program to comply with requirements contained in

section 1917 of title XIX. The department of community health shall

work with the appropriate state and federal departments and

agencies to review options for development of a voluntary estate

preservation program. Beginning not later than 180 days after the

effective date of the amendatory act that added this section and

every 180 days thereafter, the department of community health shall

submit a report to the senate and house appropriations

subcommittees with jurisdiction over department of community health

matters and the senate and house fiscal agencies regarding options

for development of the estate preservation program.

(2) The department of community health shall establish an

estate recovery program including various estate recovery program

activities. These activities shall include, at a minimum, all of

the following:

(a) Tracking assets and services of recipients of medical

assistance that are subject to estate recovery.

(b) Actions necessary to collect amounts subject to estate

recovery for medical services as determined according to subsection

(3)(a) provided to recipients identified in subsection (3)(b).

Amounts subject to recovery shall not exceed the cost of providing

the medical services. Any settlements shall take into account the

best interests of the state and the spouse and heirs.

administer the program.

(3) The department of community health shall seek appropriate

changes to the Michigan medicaid state plan and shall apply for any

necessary waivers and approvals from the federal centers for

medicare and medicaid services to implement the Michigan medicaid

estate recovery program. The department of community health shall

seek approval from the federal centers for medicare and medicaid

regarding all of the following:

(a) Which medical services are subject to estate recovery

under section 1917(b)(1)(B)(i) and (ii) of title XIX.

(b) Which recipients of medical assistance are subject to

estate recovery under section 1917(a) and (b) of title XIX.

from the estates of spouses of recipients of medical assistance who

are subject to estate recovery under section 1917(b)(2) of title

XIX.

(d) What actions may be taken to obtain funds from the estates

of recipients subject to recovery under section 1917 of title XIX,

including notice and hearing procedures that may be pursued to

contest actions taken under the Michigan medicaid estate recovery

program.

(e) Under what circumstances the estates of medical assistance

recipients will be exempt from the Michigan medicaid estate

recovery program because of a hardship. At the time an individual

enrolls in medicaid for long-term care services, the department of

community health shall provide to the individual written materials

explaining the process for applying for a waiver from estate

recovery due to hardship. The department of community health shall

develop a definition of hardship according to section 1917(b)(3) of

title XIX that includes, but is not limited to, the following:

(i) An exemption for the portion of the value of the medical

assistance recipient's homestead that is equal to or less than 50%

of the average price of a home in the county in which the medicaid

recipient's homestead is located as of the date of the medical

assistance recipient's death.

(ii) An exemption for the portion of an estate that is the

primary income-producing asset of survivors, including, but not

limited to, a family farm or business.

(iii) A rebuttable presumption that no hardship exists if the

hardship resulted from estate planning methods under which assets

were diverted in order to avoid estate recovery.

(f) The circumstances under which the department of community

health may review requests for exemptions and provide exemptions

from the Michigan medicaid estate recovery program for cases that

do not meet the definition of hardship developed by the department

of community health.

(g) Implementing the provisions of section 1396p(b)(3) of

title XIX to ensure that the heirs of persons subject to the

Michigan medicaid estate recovery program will not be unreasonably

harmed by the provisions of this program.

(4) The department of community health shall not seek medicaid

estate recovery if the costs of recovery exceed the amount of

recovery available or if the recovery is not in the best economic

interest of the state.

(5) The department of community health shall not implement a

Michigan medicaid estate recovery program until approval by the

federal government is obtained.

(6) The department of community health shall not recover

assets from the home of a medical assistance recipient if 1 or more

of the following individuals are lawfully residing in that home:

(a) The medical assistance recipient's spouse.

(b) The medical assistance recipient's child who is under the

age of 21 years, or is blind or permanently and totally disabled as

defined in section 1614 of the social security act, 42 USC 1382c.

was residing in the medical assistance recipient's home for a

period of at least 2 years immediately before the date of the

medical assistance recipient's admission to a medical institution

and who establishes that he or she provided care that permitted the

medical assistance recipient to reside at home rather than in an

institution. As used in this subdivision, "caretaker relative"

means any relation by blood, marriage, or adoption who is within

the fifth degree of kinship to the recipient.

(d) The medical assistance recipient's sibling who has an

equity interest in the medical assistance recipient's home and who

was residing in the medical assistance recipient's home for a

period of at least 1 year immediately before the date of the

individual's admission to a medical institution.

(7) The department of community health shall provide written

information to individuals seeking medicaid eligibility for long-

term care services describing the provisions of the Michigan

medicaid estate recovery program, including, but not limited to, a

statement that some or all of their estate may be recovered.

(8) The department of community health shall not charge

interest on the balance of any Michigan medicaid estate recovery

payments.

(9) The department of community health shall not place or

record a lien on qualifying property under the tax equity and

fiscal responsibility act of 1982, Public Law 97-424 (TEFRA).

Senate Bill No. 374 (H-2) as amended September 26, 2007

Sec. 112h. For the purposes of sections 112g to 112j:

(a) "Estate" means all property and other assets included

within an individual's estate that is subject to probate

administration under article III of the estates and protected

individuals code, 1998 PA 386, MCL 700.3101 to 700.3988, except [ASSETS

OTHERWISE SUBJECT TO CLAIMS UNDER SECTION 3805(3) OF THE ESTATES AND

PROTECTED INDIVIDUALS CODE, 1998 PA 386, MCL 700.3805(3) ARE NOT PART OF

THE ESTATE.]

(b) "Property" means that term as defined in section 1106 of

the estates and protected individuals code, 1998 PA 386, MCL

700.1106.

Sec. 112i. Revenue collected through Michigan medicaid estate

recovery activities shall be used to fund the activities of the

Michigan medicaid estate recovery program. Any remaining balances

shall be treated as an expenditure credit for long-term care

support and services in the medical services appropriation unit of

the annual department of community health appropriation.

Sec. 112j. (1) The department of community health may

promulgate rules for the Michigan medicaid estate recovery program

according to the administrative procedures act of 1969, 1969 PA

306, MCL 24.201 to 24.328.

(2) Not later than 1 year after implementation of the Michigan

medicaid estate recovery program and each year after that, the

department of community health shall submit a report to the senate

and house appropriations subcommittees with jurisdiction over

department of community health matters and the senate and house

fiscal agencies regarding the cost to administer the Michigan

medicaid estate recovery program and the amounts recovered under

the Michigan medicaid estate recovery program.

Sec. 112k. The Michigan medicaid estate recovery program shall

only apply to medical assistance recipients who began receiving

medicaid long-term care services after the effective date of the

amendatory act that added this section.

Enacting section 1. This amendatory act does not take effect

unless Senate Bill No. 204 of the 94th Legislature is enacted into

law.