The Omnibus Budget Reconciliation Act of 1993 and Arkansas Act 415 of 1993 mandate recovery of medical payments correctly made from 8/13/93 and later from the estates of:

• Individuals of any age who were considered to be permanently institutionalized, who received medical services in a nursing or ICF/MR facility, and who were required to pay all but a minimal amount of income for their care, and for

• Individuals age 55 and older who received medical services in a nursing or ICF/MR facility or in a home and community based waiver program, whether or not they were considered to be permanently institutionalized.

Estate recovery will not be made from the estate of deceased individuals when:

• there is a surviving spouse, dependent children under age 21, or blind or disabled children (as determined by SSA disability guidelines),

• recovery will create an undue hardship for other surviving family members, or

• recovery is not cost effective.

Estate recovery will not be made from assets which were protected as a result of the individual having a Qualified Long Term Care Insurance Partnership Policy.  The maximum amount protected at estate recovery will be the amount protected when eligibility was established.  If any of the protected assets have been spent or given away, only the amount remaining will be protected at estate recovery

Estate - The term "estate" under Arkansas law, with respect to a deceased individual, means all real and personal property owned by the individual at his death.

Permanently Institutionalized - An individual is considered to be "permanently institutionalized" if a medical determination is made which indicates there is no reasonable expectation that the individual is likely to return home.

The date on which an individual was determined to be permanently institutionalized is irrelevant. If services were provided prior to the time a decision was made regarding permanent institutionalization, recovery will include assistance provided prior to the decision.

Intent to Return Home - When an individual who enters an institution states his intent to return home, the home may be excluded from countable resources in determining eligibility, even when a medical decision has been made that the individual is "permanently institutionalized".

Undue Hardship - Undue hardship may exist when the estate's asset is the sole asset of the survivors, the asset is their sole source of income, the income is not sufficient to meet their living expenses and also repay the debt to DHS, or there are other compelling circumstances (e.g., the estate assets cannot be readily converted to cash).

Cost Effective - Recovery is cost effective if the amount which can be recovered from an estate is greater than the cost of recovery to DHS.

Personal Representative - The executor of a will or administrator of an estate who has been appointed to the position by a probate court.

Distributee - A person entitled to real or personal property of a decedent, either by will, as an heir, or as a surviving spouse.

Affidavit for Collection of Small Estates - The affidavit permitted by Ark. Code Ann § 28-41-101 to allow the distributees of an estate that does not exceed $50,000 to receive the estate without the appointment of a personal representative or administration of the estate.

Notices - An initial notice of intent to recover from the estate of individuals who received Medicaid services in an institution or a waiver program will be given at the time of application for services. The notice is printed on the application, Form DCO-777.

A second notice, DHS-20 - Notice of Estate Recovery, will be sent to the personal representative of the deceased's estate or to a distributee of the estate who has signed an "Affidavit for Collection of Small Estates". The notice will inform the individual of the intent to recover, of the hardship and cost effectiveness provisions, and of appeal rights. The notice will be mailed by the Office of Chief Counsel (OCC).

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State law requires in most cases that the appointed personal representative of the estate of a deceased person shall promptly mail to the creditors of an estate, including the Department of Human Services (DHS), a copy of the notice of their appointment which has been published in the newspaper. The published notice is to include the requirement that all claims against the estate be submitted within three months of the date of publication of the first notice. A copy of the petition for probate of a will or administration of an estate and the decedent's Social Security number shall be attached to the notice forwarded to DHS.

After receiving notice of the opening of an estate or filing of an "Affidavit for the Collection of a Small Estate", OCC will check the MMIS System to determine if the decedent received Medicaid benefits in a nursing facility, ICF/MR facility, or under a home and community based waiver program.

OCC will not pursue recovery if:

1. There is a surviving spouse;
2. There are surviving minor children;
3. There are surviving children of any age who are blind or permanently and totally disabled as defined in 42 U.S.C. §§ 1381 et seq;
4. In cases of a home, there is a son or daughter currently lawfully residing in the home and was residing in the recipient’s home for at least two years immediately before the recipient’s admission to the medical institution, and who establishes to the satisfaction of the State that he or she provided care to the recipient which permitted the recipient to reside in the home rather than in an institution;
5. In cases of a home, there is a sibling currently lawfully residing in the home, and the sibling was residing in the home at least one year immediately before the date of the recipient’s admission to the medical institution; or,
6. The recovery is not cost effective.

For factors one (1) through five (5) of the above-listed, recovery is not waived. Instead, it may be postponed until the individuals identified in those factors die or move from the home.

If benefits were paid for services in a nursing facility, ICF/MR facility, or home and under a home and community based waiver program, OCC will mail to the personal representative or the distributee of a small estate a Notice of Estate Recovery (DHS-20), advising of the intent to recover Medicaid payments and of the procedures for requesting a hardship waiver.

A payment profile for the decedent will be ordered from DMS. When the payment profile is received, a claim against the estate will be prepared for the signature of the Director of the Division of Medical Services. The claim will be filed with the appropriate Probate Clerk and a copy mailed to the personal representative, attorney for the estate, or distributee of the estate.

If no benefits were paid, no further action will be taken.

The personal representative or distributee of an estate may apply for a hardship waiver at the time notice of the estate is given to DHS, or within 30 days after receiving notice from DHS of intent to recover Medicaid payments and the procedures for requesting a hardship waiver (DHS-20).

To apply for a waiver, the representative or distributee must mail a statement to the Office of Chief Counsel, Attention: Decedents' Estates, P. O. Box 1437, Slot 1033, Little Rock, AR 72203-1437, setting forth the facts which constitute the undue hardship. Tax returns, income statements or other documents which support the position that estate recovery would work an undue hardship on the survivors must be submitted. The Office of Chief Counsel will send the hardship request and supporting documents to the Office of Program Planning and Development, Central Office Hardship Waiver Committee. In determining the existence of an undue hardship, the Central Office Hardship Waiver Committee will consider factors including, but not limited to the following:

1. The estate asset subject to recovery is the sole-income producing asset of the beneficiaries of the estate;
2. Without receipt of the proceeds of the estate, a beneficiary would become eligible for federal or state benefits;
3. Allowing a beneficiary to receive the inheritance from the estate would enable a beneficiary to discontinue eligibility for federal or state benefits;
4. The estate asset subject to recovery is a home with a value of fifty percent (50%) or less of the average price of homes in the county where the homestead is located, as of the date of the decedent’s death; and
5. Other compelling circumstances.

A determination that hardship does not exist will be made if the individual created the hardship through estate planning in which assets were divested in order to avoid estate recovery.

A decision on the hardship waiver will be made by the DHS Central Office Hardship Waiver Committee.

The DHS decision and information about the right to appeal the decision will be sent by certified mail, return receipt requested, to the person who applied for the waiver. If the person who applied for the waiver disagrees with the DHS decision, he/she may appeal the decision within 30 days’ receipt of the notice about the DHS decision.

If recovery is not made due to the determination of hardship, DHS may decide to recover at a later time if the conditions which caused the original hardship cease to exist.

The waiver applicant may appeal the DHS decision regarding the hardship waiver by writing to the Office of Appeals and Hearings and requesting an administrative review of the decision. The request must be received no later than 30 days from the date of the notice of negative action.