The Texas Health and Human Services Commission (HHSC) proposes new Chapter 373, Medicaid Estate Recovery Program, Subchapter A, §§373.101, 373.103, 373.105, Subchapter B, §§373.201, 373.203, 373.205, 373.207, 373.209, 373.211, 373.213, 373.215, 373.217, 373.219, and Subchapter C, §§373.301, 373.303, 373.305, 373.307. Proposed new Chapter 373 implements a program to recover Medicaid costs in certain circumstances, as required by §531.077, Government Code, and by 42 U.S.C. §1396p(b)(1).

Background and Factual Basis for the Rules

Section 531.077, Government Code (as added by Acts 2003, 78th Leg., ch 198, §2.17), requires HHSC to establish a Medicaid Estate Recovery Program (MERP) in order to comply with the provisions of the applicable federal law found at 42 U.S.C. §1396p(b)(1). HHSC, which is the State Medicaid Agency, will operate a Medicaid Estate Recovery Program that will seek recovery of the costs of Medicaid long-term care benefits received by certain Medicaid recipients.

Section 531.077, Government Code, requires that any funds recovered by the Medicaid Estate Recovery Program be deposited in the Medicaid account in the State's general revenue fund. Under the statute, money in the account may be appropriated only to fund long-term care, including both community-based and facility-based care.

Section-by-Section Explanation

Subchapter A, General, of the proposed new chapter contains §§373.101, 373.103 and 373.105. Section 373.101 describes the purpose of the proposed rules. Section 373.103 describes the applicability of the proposed rules. Section 373.105 defines terms used in the proposed rules.

Subchapter B, Recovery Claims, contains §§373.201, 373.203, 373.205, 373.207, 373.209, 373.211, 373.213, 373.215, 373.217, and 373.219. Section 373.201 provides the basis for estate recovery claims. Section 373.203 describes the claim procedures HHSC will use for estate recovery claims. Section 373.205 prescribes: (1) the contents of an estate recovery claim; and (2) the time within which the Medicaid Estate Recovery Program will file a probate claim after receiving notice of a Medicaid recipient's death. Section 373.207 sets forth estate recovery exemptions. Section 373.209 describes undue hardship waivers and the procedure for requesting an undue hardship waiver. Section 373.211 discusses the general procedure for requesting a review of a denial of an undue hardship waiver. Section 373.213 describes the deduction allowed for expenses for home maintenance of a Medicaid recipient's home and for any costs of care provided on behalf of a Medicaid recipient that delayed the recipient's institutionalization. Section 373.215 defines when Medicaid estate recovery will not be cost effective and will not be pursued. Section 373.217 explains how the estate recovery claim is calculated. Section 373.219 describes the procedure to be used for payment of estate recovery claims.

Subchapter C, Notice, contains §§373.301, 381.303, 373.305, and 381.307. Section 373.301 requires that notice be provided to Medicaid applicants concerning the provisions of the Medicaid Estate Recovery Program. Section 373.303 identifies who will receive notice of the Medicaid Estate Recovery Program. Notice will be provided during the Medicaid application and/or recertification processes. Section 373.305 describes the contents of the notice to be provided to applicants, which will include: (1) a description of Medicaid Estate Recovery Program provisions; (2) information on covered Medicaid long-term care services subject to estate recovery claims; (3) claim procedures found in §322 of the Texas Probate Code; (4) Information on applicable "look-back" penalties for transfers of property for less than market value during the 36 months prior to applying for Medicaid benefits; (5) a description of hardship exemptions and related procedures in regard to any recovery claim; and (6) Information concerning a MERP estate recovery claim and the Notice of Intent to File a Claim on the death of a Medicaid recipient. Section 373.307 describes the contents of the Notice of Intent to File a Claim and to whom the Notice will be provided.

Public Benefit

Charles Bell, M.D., Deputy Executive Commissioner for Health Services, has determined that during the first five years the proposed rules are in effect, the public benefit from adoption of the rules will be an increase in available funding for Medicaid long-term care, including community-based and facility-based care. Recovery of covered long-term care services will be sought only from the estate of a deceased Medicaid recipient age 55 years or over.

Fiscal Note

Tom Suehs, Deputy Executive Commissioner for Financial Services, has determined that for the first five-year period that the proposed rules are in effect there will be no significant negative impact on state or local governments. However, the implementation of a Medicaid estate recovery program will generate estimated revenue to the State of Texas for State Fiscal Year 2004 of $0; for State Fiscal Year 2005 of up to $32,728 for State Fiscal Year 2006 of up to $817,042; for State Fiscal Year 2007 of up to $2,165,549; and for State Fiscal Year 2008 of up to $3,450,307.

Small and Micro-business Impact Analysis

The proposed rules will not result in additional costs to persons required to comply with them. HHSC does not anticipate that the rules will have any adverse impact on small or micro-businesses. The rules will not negatively affect local employment.

Regulatory Analysis

The Commission has determined that none of the proposed rules is a "major environmental rule," as defined by §2001.0225, Government Code. "Major environmental rule" is defined to mean a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. None of the proposed rules is specifically intended to protect the environment or reduce risks to human health from environmental exposure.

Takings Impact Assessment

The Health and Human Services Commission has evaluated the takings impact of the proposed rules under §2007.043, Government Code. HHSC has determined that this action does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of governmental action and, therefore, does not constitute a taking. The proposed rules are reasonably taken to fulfill requirements of both federal and state law.

Public Comment

Comments on the proposed rules may be submitted in writing to Frank Genco, Health and Human Services Commission, P.O. Box 13247, Austin, Texas 78711-3247, or by e-mail to Frank.Genco@hhsc.state.tx.us. Hand deliveries will be accepted at HHSC, 4900 N. Lamar Blvd., Austin, Texas 78751. Comments also may be faxed to (512) 424-6665. Comments will be accepted for 30 days following publication of this proposal in the Texas Register .

Public Hearing

A public hearing is scheduled for May 27, 2004, from 3:00 PM to 6:00 PM (central time) in the Public Hearing Room of the Brown-Heatly Building, 4900 North Lamar, Austin, Texas. Persons requiring further information, special assistance, or accommodations should contact Becky Medina at (512) 424-6509.

Subchapter A. GENERAL