Update on Medi-Cal Recovery Reforms

February 2, 2017
January 2017

The Medi-Cal recovery provisions of SB 33 (Hernandez), which were incorporated into SB 833, became effective January 1, 2017. While these new statutory changes give advocates plenty of reason to celebrate, there are some significant issues that have arisen in implementation of the new law.


Effective Date for Surviving Spouses and Registered Domestic Partners

Initially, the Recovery Unit interpreted the new law to mean that the new provisions apply only to Medi-Cal beneficiaries who die on or after January 1, 2017, and that the thousands of surviving spouses and registered domestic partners whose spouses died prior to January 1, 2017 won't be helped at all by SB 833. However, the recovery unit has clarified that there will be no recovery from surviving spouses or registered domestic partners on or after January 1, 2017 regardless of when the Medi-Cal spouse died.


Recovery Limited to Estates Subject to Probate Administration

Under the new law, recovery is mandatory only from assets comprising the probate estate, as defined by state law. The "probate estate" generally refers to real or personal property that passes to a survivor under the terms of a will or by the law of intestate succession.  The Department has accepted the definition of probate estate at Probate Code §19000 accordingly:    (g) “Probate estate” means a decedent’s estate subject to administration pursuant to Division 7 (commencing with Section 7000).

Small Estates & Probate Code §13100  - The Department has also agreed that those estates that are eligible for summary administration ($150,000 or less) under the Provisions of Division 8 of the Probate Code (Disposition of Estate Without Administration) will not be subject to recovery. Thus, unless the estate is subject to formal probate administration, there will be no recovery.

Mobile Homes No Longer subject to Recovery - Probate Code §13050 includes a list of exclusions from probate or probate administration.  This includes the exclusion of “any manufactured home, mobile home, commercial coach, truck camper or floating home registered under Part 2 (commencing with Section 18000) of Division 13 of the Health and Safety Code (manufactured homes).  Basically, if the mobile home is registered with Housing and Community Development, it is exempt from inclusion under this section.


Recovery from IHSS - The Department had suggested that they can claim for all IHSS services, rather than just those personal care services provided under the Section 1915(c) waiver programs. However, their State Plan Amendment indicates “For individuals who die on or after January 1, 2017, the State will recover only for the services required by the State Medicaid Manual, Section 3810(A)(2) (Continued), which, at least for now, are limited to 1915(c) waivers in California and does not include personal care services under IHSS.    


State Plan Amendment

Meanwhile the Department submitted its State Plan Amendment on Medi-Cal Recovery to CMS for federal approval on December 29, 2016. CMS has 90 days to respond or request additional information.  The Department has also begun drafting revised regulations to conform with the new statute. The SPA (16-030) is posted on the Department’s website under their publications section – see pending state plan amendments for 2016.


For more information about Updates, see CANHR’s Medi-Cal page at www.canhr.org.


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