Placement of Liens on Property of Certain Institutionalized MO HealthNet Participants

PURPOSE: This rule implements the guidelines for placement of liens on the property of certain institutionalized MO HealthNet participants, in accordance with the authority given to states in the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), as amended. (1) When an applicant for MO HealthNet or a MO HealthNet participant is a patient, or will become a patient, in a nursing facility, intermediate care facility for the developmentally disabled, or other medical institution, the Department of Social Services will determine if the placement of a lien against the property of the applicant or participant is applicable. A lien is imposed on the property of an individual, in accordance with the authority given states in the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), when— (A) The MO HealthNet participant is or has made application to become a patient in a nursing facility, intermediate care facility for the developmentally disabled, or other medical institution, if such individual is required, as a condition of receiving services in such institution, to spend for costs of medical care all but a minimal amount of his/her income required for personal needs; (B) The institutionalized MO HealthNet participant owns property. Property includes the homestead and all other real property in which the person has a sole legal interest or a legal interest based upon co-ownership of the property; (C) The department has determined after notice and opportunity for hearing that there is no reasonable expectation that the person can be discharged from the facility within one hundred twenty (120) days and return home. The hearing, if requested, will proceed under the provision of Chapter 536, RSMo, before a hearing officer designated by the director of the Department of Social Services. The fact that there is no reasonable expectation that the person can be discharged from the facility within one hundred twenty (120) days and return home may be substantiated by one (1) of the following: 1. Applicant/participant states in writing that he/she does not intend to return home within one hundred twenty (120) days; 2. Applicant/participant has been in the institution for longer than one hundred twenty (120) days; or 3. A physician states in writing that the applicant/ participant cannot be expected to be discharged within one hundred twenty (120) days of admission; and (D) A lien is imposed on the property unless one (1) of the following persons lawfully resides in the property: 1. The institutionalized person’s spouse; 2. The institutionalized person’s child who is under twentyone (21) years of age or is blind or permanently and totally disabled; or 3. The institutionalized person’s sibling who has an equity interest in the property and who was residing in such individual’s home for a period of at least one (1) year immediately before the date of the individual’s admission to the institution; or 4. The division may require proof of residency pursuant to this subsection. Proof of residency includes, but is not limited to, a utility bill, property tax bill, copy of permanent Missouri driver’s license, copy of Missouri voter’s registration verification, or copy of the most recently filed Federal 1040 income tax form in the name of the institutionalized person’s spouse, child, or sibling. (2) After determining the applicability of the lien, the MO HealthNet participant is given an Explanation of TEFRA Lien. A person who objects to the imposition of a lien without good cause is ineligible for medical assistance. Ineligibility is based on the person’s objection without good cause to the imposition of the lien, which impedes the department’s ability to implement its lien requirements. (3) A lien may be imposed upon the property but the department will not seek adjustment or recovery of the costs of medical assistance correctly paid on behalf of the participant when the participant’s child over the age of twenty-one (21) resides in the home and facts are established, to the satisfaction of the department, by sworn affidavit of the participant’s child or authorized representative with personal knowledge of the facts, conclusively showing that— (A) The participant’s child has lived with and cared for the participant in the participant’s home continuously for the two (2) years immediately prior to the participant entering a nursing facility, intermediate care facility for the developmentally disabled, or other medical institution; (B) By providing that care the participant’s child has allowed the participant to live at home rather than in a nursing facility, intermediate care facility for the developmentally disabled, or other medical institution; (C) The participant’s child continues to reside in the home since the participant entered into a nursing facility, intermediate care facility for the developmentally disabled, or other medical institution; (D) Facts to be included in the affidavit shall include but not be limited to: 1. The number of days and hours each week the child was providing care to the participant; 2. Types of care provided; such as, bathing and grooming, administering medication, providing therapeutic/health related activities; 3. Types of assistance provided; such as, household chores/ cleaning, maintenance, repair, improvements; and 4. Types of errands outside the home provided; such as, shopping for groceries and household items, transportation to medical visits, pharmacy, recreational and social activities, and religious activities; (E) The department may, at its discretion, require the participant to provide documentation to support the statements in the affidavit; (F) The affidavit must be provided to the MO HealthNet Division, TEFRA Lien Recoveries at PO Box 6500, Jefferson City, MO 65102-6500 in a timely manner before the lien has been satisfied against the participant’s home; (G) Upon a determination by the department that the facts established in the affidavit satisfy the department that the exception has been met, then the TEFRA Lien shall be maintained but not enforced so long as the child resides in the property and it is not sold, transferred, or leased, other than the child may take title to the property subject to the lien; (H) Upon a determination by the department that the facts established in the affidavit do not satisfy the department that the exception has been met, then the lien may be enforced as otherwise provided in section (6); and (I) Participants who object to a TEFRA Lien in a timely manner under this subsection are entitled to a fair hearing, under the provision of Chapter 536, RSMo, before a hearing officer designated by the director of the Department of Social Services. A timely objection must be made in writing to the department within ninety (90) days of the objected adverse decision. (4) The director of the department or the director’s designee will file for record, with the recorder of deeds of the county in which any real property is situated, a written Certificate of TEFRA Lien. The lien will contain the name of the MO HealthNet participant and a description of the property. The recorder will note the time of receiving such notice and will record and index the certificate of lien in the same manner as deeds of real estate are required to be recorded and indexed. The county recorder shall be reimbursed per certificate or release filed by the division. (5) The TEFRA lien shall be for a debt due to the state for medical assistance paid or to be paid on behalf of the MO HealthNet participant. The amount of the lien will be for the full amount due the state at the time the lien is enforced. Fees paid to county recorder of deeds for filing of the lien will be included in the amount of the lien. (6) The TEFRA lien does not affect ownership interest in a property until it is sold, transferred, or leased, or upon the death of the individual, at which time the lien must be satisfied, subject to the following: (A) Any costs of sale of the property that are to be paid before the lien must be approved in advance by the department, and if a HUD-1 statement is prepared for that sale transaction, then a copy must be provided to the department prior to the closing for review and approval; (B) Subject to the provisions of subsection (6)(A), in any case of a pending probate matter in a court of the state of Missouri for the administration of the assets and interests of the participant, including the property subject to the lien, then the following probate costs and expenses may be paid from the sale of the real estate at closing ahead of the lien: 1. Filing fees, publication fees, appraisal fees, personal representative fees, executor fees, attorney’s fees; 2. Costs to maintain and repair the property for sale, such as insurance premiums, professional lawn care services, necessary repairs to prepare for sale, customary real estate sales commissions, or publication of sale notice, and the participant or authorized representative shall produce documentation to support costs and incurred expenses; or 3. Burial costs of the participant; and (C) The lien shall not be released against the real estate, except as required in section (7), until all net equity in the property remaining after closing costs after sale, transfer, or lease has been paid in satisfaction of the lien to the department, after payment of customary and approved costs from the sale proceeds as set forth in subsections (6)(A) and (6) (B). Closing costs are shared equally by all beneficiaries of the net proceeds of the real estate sale. In no case shall the state directly pay any costs of the sale or probate. (7) The lien will be dissolved in the event the individual is discharged from the institution and returns home. A Notice of TEFRA Lien Release will be filed within thirty (30) days with the recorder of deeds of the county in which the original Certificate of TEFRA Lien was filed. AUTHORITY: sections 208.201, 208.215, and 660.017, RSMo 2016.* Emergency rule filed Aug. 15, 2005, effective Sept. 1, 2005, expires Feb. 27, 2006. Original rule filed May 16, 2005, effective Nov. 30, 2005. Amended: Filed Dec. 15, 2011, effective June 30, 2012. Amended: Filed Jan. 10, 2022, effective July 30, 2022. *Original authority: 208.201, RSMo 1987, amended 2007; 208.215, RSMo 1981, amended 1982, 1987, 1990, 1993, 1996, 2005, 2007, 2010, 2014; and 660.017, RSMo 1993, amended 1995.