CA DEPARTMENT OF HEALTH SERVICES GRANTS HARDSHIP WAIVER OF $172,169 MEDI-CAL CLAIM
By Roman P. Mosqueda, Esq.
By Final Decision of the California Department of Health Services (DHS) dated August 23, 2005, adopting the Proposed Decision of the Office of Administrative Hearings and Appeals dated June 29, 2005, the DHS waived its Medi-Cal combined claim of $172,169 against the estates of deceased Filipino husband and wife, whose names are withheld.
More particularly the DHS claim amount consists of insurance premiums/ medical costs paid on the decedents’ behalf of $64,277 for the husband who died in June, 2003, at the age of 92 and $107,892 for the wife who died in April, 2003, at the age of 85.
Medi-Cal Estate
Recovery Claim:
As stated in the Position Statement of the Estate Recovery Unit of the DHS, the Medi-Cal (Medicaid) Program provides medical care services to medically needy individuals in the State of California.
Under California Welfare and Institutions Code Section 14009.5, the DHS is required to claim against any and all assets in the estate of a deceased Medi-Cal beneficiary for the amount which Medi-Cal paid, or for the value of those assets, whichever is less.
But the DHS is barred from pursuing an estate recovery claim:
1. during the lifetime of a beneficiary’s surviving spouse; and
2. when the Medi-Cal beneficiary is survived by:
a. a minor child under 21 years of age, or
b. a child who is blind or disabled.
Estate recovery claims must include all charges paid by Medi-Cal for insurance premiums and for medical care services and treatment from the date of the beneficiary’s 55th birthday to the date of death.
Under the California Probate Code Section 215, whoever is handling the decedent’s affairs must provide notice of death of the Medi-Cal beneficiary to the Director of DHS within 90 days after the date of death, including a copy of the death certificate.
And under Probate Code Section 9202, such notice of death must be provided within 90 days after the date letters are issued to an estate administrator or personal representative. It gives the Director of DHS four months after such notice is given in which to file a claim in the estate proceedings.
The estate recovery claim takes precedence over the distribution of the net assets to the heirs or survivors. And even if the net assets have been distributed, the DHS Medi-Cal claim reverts to the distributees or heirs.
DHS Original Position
On Claim Against Estates
Of Filipino Couple:
After the required notices of death from the decedents’ daughter were received, the DHS mailed on October 7, 2003, a payment demand for the aforesaid claim amount to joint tenants-spouses.
Indeed, on December 15, 1992, a recorded joint tenancy was created in a duplex property located in Los Angeles amongst the Medi-Cal beneficiaries-spouses and the joint tenants-spouses (son-in-law and daughter).
When the Filipino wife died in April, 2003, her one-fourth share in the property automatically passed to her husband and the other joint tenants-spouses. And when the Filipino husband died in June, 2003, his one-third joint tenancy interest in the property automatically passed to the remaining joint tenants-spouses.
The DHS estate recovery claim of $172,168.73 was asserted against the estate of the Filipino husband – Medi-Cal beneficiary for his and her wife’s Medi-Cal payments, comprising of his one-third interest in the duplex property.
On November 21, 2003, the joint tenants-spouses timely filed an Application for Hardship Waiver. On March 5, 2004, the Estate Recovery Unit of DHS submitted the application to the Office of Administrative Hearings and Appeals of DHS, which issued a Decision on July 23, 2004, denying the hardship waiver application.
Proposed Decision Of
Hearing Officer Robert
Burge Adopted By DHS
As Final Decision:
This Author timely filed a written request for an Administrative Hearing for the applicants-spouses on their hardship waiver application on September 17, 2004. An Administrative Hearing was conducted in Los Angeles by Hearing Officer Robert Burge.
At that Administrative Hearing, this Author presented testimonial and documentary evidence on behalf of the applicants for hardship waiver, to wit:
1. applicants are near senior age: the husband is 57 years of age, the wife is 55 years of age;
2. applicant-wife, although a registered nurse, has been out of job since 2003 due to a delicate patient-care issue, and is suffering from cervical radiculopathy;
3. only the applicant-husband is gainfully employed with only $2,500 monthly income, which prevents refinancing;
4. applicants’ gross monthly income is less than their gross monthly expenses, and their daughter is suffering from emotional and psychological problems;
5. applicants have incurred monthly loan payments, property taxes payments, and maintenance expenses; and
6. the DHS erred in its computation of its claim based on the property’s appraised value of $330,000 and loan mortgage of $143,000.
Hearing Officer Robert Burge found that:
1. applicants’ monthly expenses exceeded their monthly income creating a cash shortfall each month;
2. this financial condition plus the size of the DHS claim (limited to $93,500 as decedents’ equity share (two-quarter) in the property valued at $330,000 less $143,000 loan balance), prohibit the applicants from satisfying the claim without causing undue hardship;
3. it is unlikely that the applicants would be approved for an additional mortgage to satisfy the DHS claim, or have the ability to afford the monthly payments because:
a. applicants are in their late fifties with one retired;
b. have lived in decedents’ home for 29 years and continue to reside their; and
c. would have difficulty obtaining financing to repay the State, in satisfaction of the hardship waiver criteria under Title 22, CCR, Section 50963(a)(4).
In addition, Hearing Officer Robert Burge found that the applicants need the equity in the property to “make the property habitable, or to acquire necessities of life,” thereby meeting the hardship waiver criteria under Section 50963(a)(6).
Consequently, the applicants-spouses were granted hardship waiver and not made to pay $172,169(reduced to $93,500) of Medi-Cal payments for insurance premiums and medical costs of their in-laws/parents.
(The Author, Roman P. Mosqueda, personally handled the applicants-spouses’ hardship waiver application to successful conclusion, applying administrative, probate and real estate law experiences, and saving them $172, 169.00 in Medi-Cal payments for their parents/in-laws.)