Senate Bill No. 114

Introduced By waterman

By Request of the Department of Public Health and Human Services



A Bill for an Act entitled: An Act generally revising the laws relating to liability for a resident's cost of care in a state institution; specifying factors to be considered by the department of public health and human services in determining ability to pay; requiring notice of and an opportunity for a hearing regarding a determination of ability to pay; specifying billing procedures; specifying the information to be provided to and considered by the department in a financial investigation; providing for annual review of ability to pay; specifying the effect of a failure to provide required financial information; specifying limits on liability for costs of care; specifying collection procedures; specifying the extent of recovery from a decedent's estate; specifying the effect and treatment of certain managed care payments; providing for automatic assignment of third-party payments to the department for a resident's cost of care; amending sections 53-1-401, 53-1-402, 53-1-403, 53-1-404, 53-1-405, 53-1-406, 53-1-407, 53-1-408, 53-1-409, 53-1-410, 53-1-411, 53-1-412, and 53-1-413, MCA; and providing effective dates and applicability dates.



Be it enacted by the Legislature of the State of Montana:



Section 1.  Section 53-1-401, MCA, is amended to read:

"53-1-401.   Definitions. As used in this part, unless the context requires otherwise, the following definitions apply:

(1)  "All-inclusive rate" means a fixed charge that is computed on a daily basis or on the basis of another time period for inpatients, that is computed on a per visit basis for outpatients, and that is applicable uniformly to each patient without regard to the extent of the services required by the patient and without regard to a distinction between physician services and hospital services.

(2)  "Ancillary charge" means the expense of providing identifiable, direct, resident services, including but not limited to:

(a)  physicians' services;

(b)  x-ray and laboratory services;

(c)  dental services;

(d)  speech-language pathology and audiology services;

(e)  occupational and physical therapy;

(f)  medical supplies;

(g)  prescribed drugs; and

(h)  specialized medical equipment.

(3)  "Care" means the care, treatment, support, maintenance, and other services rendered by the department to a resident.

(4) "Cost of care" means the applicable all-inclusive rate charges or per diem charges and ancillary charges for a resident's care that are determined as provided in this part.

(4)(5)  "Department" means the department of public health and human services provided for in 2-15-2201.

(5)(6)  "Financially responsible person" means a spouse of a resident, the natural or adoptive parents of a resident under 18 years of age, or a guardian or conservator to the extent of the guardian's or conservator's responsibility for the financial affairs of the person who is a resident under applicable Montana law establishing the duties and limitations of guardianships or conservatorships.

(6)(7)  "Full-time equivalent resident load" means the total daily resident count for the fiscal year divided by the number of days in the year.

(8) "Gross daily budgeted cost" means the total cost of operating a facility as budgeted through the legislative appropriation process less the budgeted amount of federal grant revenue for the institution.

(7)(9)  "Long-term resident" means a resident in an institution listed in 53-1-402 for a continuous period in excess of 120 days. The absence of a resident from the institution due to a temporary or trial visit may not be counted as interrupting the accrual of the 120 days required to attain the status of a long-term resident.

(8)(10) "Per diem" "Per diem charge" means the gross daily budgeted cost of operating an institution or an individual unit of an institution for the state fiscal year (including certain but not limited to contracted medical services, depreciation, and associated department costs but excluding the cost of educational programs, federal grants, ancillary charges, and costs not directly identified with patient care) divided by the full-time equivalent resident load for the previous state fiscal year.

(9)(11) "Resident" means any person who is receiving care from or who is a resident of an institution listed in 53-1-402.

(10)(12) (a) "Third-party resource Third party" means any third-party individual or entity that is or may be liable to pay all or part of the charges for a resident's cost of care, including but is not limited to applicable medicare, medicaid, and personal insurance or other similar health care benefits.

(b) Third party does not include:

(i) a managed care organization administering a mental health managed care program under contract with the department; or

(ii) a financially responsible person."



Section 2.  Section 53-1-402, MCA, is amended to read:

"53-1-402.   Residents subject to per diem and ancillary charges and financially responsible persons liable for cost of care. (1) The department shall assess and collect A resident and a financially responsible person are liable to the department for the resident's cost of care as provided in this part. The cost of care includes the applicable per diem and ancillary charges or all-inclusive rate charges for the care of residents in the following institutions:

(a)  Montana state hospital;

(b)  Montana developmental center;

(c)  Montana veterans' home;

(d)  eastern Montana veterans' home;

(e)  Montana mental health nursing care center;

(f)  Eastmont human services center; and

(g)  Montana chemical dependency treatment center.

(2)  This section does not apply to the The eastern Montana veterans' home may assess charges on either a per diem and ancillary charge basis or an all-inclusive rate basis if the department contracts with a private vendor to operate the facility as provided for in 10-2-416.

(3)  This section does not apply to residents of the The Montana state hospital or to and the Montana mental health nursing center to the extent that either of these institutions assesses and collects charges through may determine the cost of care using an all-inclusive rate rather than or per diem and ancillary charges if the department contracts with a private entity to operate a mental health managed care program."



Section 3.  Section 53-1-403, MCA, is amended to read:

"53-1-403.   Rules. In addition to the specific provisions of this part which that require the department to make adopt rules, the department may make adopt rules for the administration of to implement this part. All rules made adopted by the department under the provisions of this part shall must be made adopted pursuant to the provisions of the Montana Administrative Procedure Act."



Section 4.  Section 53-1-404, MCA, is amended to read:

"53-1-404.   When Department to compute per diem to be computed charge. The per diem shall charge for the fiscal year must be computed on July 1 of each year by the department. If the budgeted costs of an institution change substantially within the fiscal year, the per diem charge may be adjusted to compensate for those changes."



Section 5.  Section 53-1-405, MCA, is amended to read:

"53-1-405.   Monthly assessment of charges payment amount. (1) A resident and a financially responsible person are liable for the resident's cost of care in an amount that the department determines that the resident or financially responsible person is able to pay. The department shall assess monthly against each resident, financially responsible person, or applicable third-party resource the full per diem charge, a proportionate share of the per diem charge, or no per diem charge, plus full ancillary charge, a proportionate share of the ancillary charge, or no ancillary charge determine ability to pay based upon financial information given to and documentation obtained by the department during its through an investigation conducted according to the rules of the department as provided in 53-1-406.

(2)  An assessment made by the department under this section shall be based on the resident's or financially responsible person's ability to pay. The department shall prescribe adopt rules which that establish criteria and a procedure procedures for determining ability to pay. The criteria established by rules adopted under this section must address factors relevant to the person's ability to pay, including but not limited to:

(a) the amount of the resident's or financially responsible person's income, including the anticipated receipt of retroactive benefits, such as veteran's benefits or social security benefits;

(b) the amount of the resident's or financially responsible person's assets, including the availability of assets that are liquid or that are able to be readily converted to cash;

(c) the amount of the resident's or financially responsible person's fixed expenses for reasonable and necessary housing, utilities, transportation, medical care, food, and clothing;

(d) the amount of the resident's or financially responsible person's taxes and other mandatory payments, such as social security withholdings, insurance, child support, restitution, and court-ordered payments;

(e) the number of persons dependent upon the resident or financially responsible person for support;

(f) the amount of the resident's or financially responsible person's discretionary income;

(g) the resident's personal needs requirements while in the institution; and

(h) the extent to which requirement of a particular monthly payment or any monthly payment would impose an undue financial burden on the resident or financially responsible person.

(3) The department may determine ability to pay and assess charges up to the full cost of care but may require monthly payments in a lesser amount based upon:

(a) a resident's or financially responsible person's income-producing assets, such as stocks, bonds, certificates of deposit, or other similar assets;

(b) real property of the resident or the resident's spouse if:

(i) the property has been listed or advertised for sale, unless the sale proceeds are or will be used to purchase a home within 18 months or are used for primary residence living expenses; or

(ii) the property is not occupied as the home of the resident, the resident's spouse, or a dependent child or parent of the resident or the resident's spouse and if there is no reasonable expectation that the resident, the resident's spouse, or a dependent child or parent of the resident or the resident's spouse will return to occupy the property as a home; or

(c) the anticipated receipt of retroactive benefits, such as veteran's benefits or social security benefits.

(4) If the department has determined an ability to pay and has assessed charges but has required monthly payments in a lesser amount as provided in subsection (3), the department may bill and collect all or a part of the accumulated difference between the assessed charges and the minimum payment amount:

(a) upon sale or liquidation of the assets or real property;

(b) upon the actual receipt of retroactive benefits, such as veteran's benefits or social security benefits;

(c) upon determination of a current ability to pay; or

(d) from the resident's or financially responsible person's estate as provided in 53-1-412.

(5) The department may not make an assessment which require payment of a monthly amount that would place an undue financial burden on the resident or the financially responsible person.

(6) The department shall refund to the resident or financially responsible person any payment made to the department for any month to the extent that the total payments received from the resident, financially responsible person, and third party exceed the resident's cost of care for that month.

(7) The fact that a managed care organization contracting with the department to administer a mental health managed care program is or may be liable to pay or has paid an amount to an institution with respect to the resident does not reduce or otherwise affect the resident's or financially responsible person's obligation to pay for the cost of care as provided in this part.

(8) The department shall provide a written notice and an opportunity for a hearing regarding a department determination of ability to pay to any resident or financially responsible person who is determined able to pay.

(9) In addition to providing the notice required by subsection (8), the department shall bill the resident or financially responsible person monthly for the amount determined in accordance with this section. The bill must state the amount due for the current month, the amount of any payments received during the billing cycle, and the total amount of unpaid costs of care that the department has determined the resident or financially responsible person is able to pay. The bill need not state the current or accrued full cost of care that is or would be payable by a third party.

(10) This section may not be construed to reduce the liability of a third party for the resident's full cost of care as provided in this part."



Section 6.  Section 53-1-406, MCA, is amended to read:

"53-1-406.   Investigation of ability to pay. (1) Before determining an ability to pay under 53-1-405, the department shall investigate each resident's and each financially responsible person's ability to pay. For purposes of the investigation, the determination of ability to pay, or any later review or redetermination, the department may require the resident or financially responsible person to complete, sign, and submit financial information and documentation, including financial statements on a form supplied by the department.

(2) Each agency of the state shall give provide to the department all reasonable assistance to the department in obtaining and all requested information and documents necessary for the proper financial investigation of residents or financially responsible persons. The department of revenue may not provide confidential tax return information to the department without the consent of the taxpayer.

(2)(3)  Upon request of the department, the resident or financially responsible person shall make available to the department and shall cooperate with the department in obtaining any financial information which and documentation that the department considers essential for the purpose of determining ability to pay and which that, under federal law, the department is not prohibited from seeking or obtaining from the resident or financially responsible person. Willful failure The information and documentation that the department is entitled to receive includes but is not limited to:

(a) income statements and verification;

(b) liability statements and verification;

(c) tax returns and related forms, documents, and records, but the department of revenue may not provide confidential tax return information to the department without the consent of the taxpayer;

(d) asset statements and descriptions, including valuation appraisals;

(e) records of a bank or other financial institution, including account balances, loan statements, account ownership information, and transaction records;

(f) expense statements and verification;

(g) financial statements, including existing financial statements and financial statements on forms provided by the department;

(h) releases authorizing the department to obtain information or documents directly from an employer, creditor, federal agency, financial institution, or other person or entity; and

(i) any other information or documentation necessary to the determination.

(4) If a resident or financially responsible person fails to provide or cooperate in obtaining the financial information or documentation requested by the department may result in, the department may make a determination of ability to pay based upon any information or documentation available to the department, including a determination of ability to pay up to the full per diem and full ancillary charges cost of care. The determination is effective until such time as the requested information and documentation is are provided and the department makes a new determination of ability to pay, taking into consideration the additional information and documentation.

(3)  (a) A representative of the department authorized by the director may administer oaths, take testimony, and subpoena and compel the attendance of witnesses and the production of books, papers, records, and documents in connection with the duty of securing payments for care as provided by this part.

(b)  A person who fails to obey the subpoena, upon petition of the department to any judge of a district court of the state, may be ordered by the judge to appear and show cause for his disobedience of the subpoena. The judge, after a hearing, may order that the subpoena be obeyed or, if it appears that the subpoena was inappropriately issued, may dismiss the petition. A person who fails to obey the subpoena when so ordered by the judge may be punished for contempt of court on application of the department to the district court.

(5) In a hearing under 53-1-407, if a hearings examiner determines that information or documentation is relevant and admissible and orders the resident or financially responsible person to produce it and if the resident or financially responsible person fails or refuses to produce that information or documentation, a determination of ability to pay the full cost of care may be affirmed or payment of the full cost of care ordered, regardless of other information presented."



Section 7.  Section 53-1-407, MCA, is amended to read:

"53-1-407.   Appeal of determination of ability to pay. If a A resident or financially responsible person disagrees with the final determination of the department as to his aggrieved by a determination of ability to pay any part of the per diem or ancillary charge, an appeal may be filed within 30 days of the date of the department's determination in any court of record in Montana having jurisdiction of the resident or financially responsible person liable for payment under 53-1-405 may request a hearing pursuant to Title 2, chapter 4, part 6."



Section 8.  Section 53-1-408, MCA, is amended to read:

"53-1-408.   Periodic review by department of ability to pay. (1) At appropriate intervals, the The department shall review at least annually each determination of ability to pay, and, if there has been a significant change in a resident's or financially responsible person's ability to pay, the department shall make a new determination. However, a

(2) In addition to the annual review required by subsection (1), the department shall review a determination of ability to pay upon the request of a resident or financially responsible person if the person provides the department with documentation of a changed circumstance that would substantially affect the amount determined under 53-1-405.

(3) A new determination of ability to pay may not be applied retroactively unless:

(a) the new determination results in a monthly assessment which payment amount that is less than the previous monthly assessment payment amount; or unless

(b) the resident or financially responsible person has materially misrepresented or failed to provide any financial information or documentation that the person was obligated to provide under 53-1-406 and unless the resident or financially responsible person would have been required to pay a higher monthly amount based upon consideration of the complete and correct information and documentation.

(4) The department shall make may adopt rules to implement the provisions of this section, including but not limited to rules for credit or refund of any overpayment resulting from an assessment retroactively reduced because of a new determination of ability to pay."



Section 9.  Section 53-1-409, MCA, is amended to read:

"53-1-409.   Liability Limitations on liability of resident or financially responsible person for assessed charges cost of care. (1) The resident or financially responsible person is liable only for the per diem and ancillary charges cost of care that the department has assessed determined that the person is able to pay and for which the department has billed the resident or financially responsible person. If amounts assessed and billed are the amount payable is retroactively reduced because of a new determination of ability to pay, the resident or financially responsible person is liable only for shall pay only the reduced amount for the period of time covered by the retroactive reduction.

(2)  The natural or adoptive parents of a long-term residents are liable only for the charges made by the department resident may not be required to pay for the resident's cost of care in an amount not to exceed exceeding the cost of caring for a normal child at home as determined from standard sources and updated annually by the department based upon the annual cost of raising a child, as estimated by the United States department of agriculture.

(3)  Natural The natural or adoptive parents of a long-term resident are not liable for any charges made by the department for care of a long-term resident incurred or accrued subsequent to the resident attaining may not be required to pay for the resident's cost of care for periods after the resident attains 18 years of age.

(4)  (a) A resident or financially responsible person is not financially liable for care provided to a resident under any provision of a criminal statute.

(b)  Subsection (4)(a) does not apply to a person who is enrolled in the Montana chemical dependency treatment center.

(5) This section may not be construed to reduce the liability of a third party for a resident's full cost of care as provided in this part."



Section 10.  Section 53-1-410, MCA, is amended to read:

"53-1-410.   Nonpayment not grounds for release discharge. A resident of an institution listed in 53-1-402 may not be released discharged by reason of the nonpayment of the per diem or the ancillary charge resident's cost of care unless, by certification of a physician consulted by the superintendent of the institution, the release discharge is medically advisable."



Section 11.  Section 53-1-411, MCA, is amended to read:

"53-1-411.   Collections by department of administration from residents and financially responsible persons. (1) If a resident or financially responsible person liable for payment of per diem and ancillary charges due under this part refuses or fails to make the payment, it is collectible pay the amount required under this part, any amount remaining unpaid 30 days after the department mails a written demand for payment may be collected:

(a) by the department in any manner allowed by law for the collection of debts; or

(b) by the department of administration in the manner set forth in Title 17, chapter 4, for the collection of debts owing to the state or by a civil suit brought by the department of administration in the name of the state.

(2) A resident's death or discharge from an institution does not reduce or eliminate the obligation of any person to pay an amount required under this part."



Section 12.  Section 53-1-412, MCA, is amended to read:

"53-1-412.   Collections from estates. (1) The state department has a claim against the estate of a resident or and against the estate of a financially responsible person for an amount due to the state at the death of the resident or financially responsible person. The attorney general shall collect any claim which the state may have against the estate. However, the amounts that the department determined that the resident or financially responsible person was able to pay under 53-1-405, less any amounts actually paid by the resident, a financially responsible person, or a third party.

(2) The fact that a managed care organization contracting with the department to administer a mental health managed care program is or may be liable to pay or has paid an amount to an institution with respect to the resident does not reduce or otherwise affect the estate's obligation to pay for the cost of care as provided in this part.

(3) Except as provided in subsection (4), the department's claim under this section is enforceable against an estate after the death of a resident or financially responsible person. The department's claim is timely if presented within the time specified in the published notice to creditors in the probate proceeding.

(4) The department's claim under subsection (1) may be enforced only to the extent that enforcement does not deprive a surviving spouse, or dependent child, or parent of the resident or financially responsible person of:

(1)(a)  an amount necessary for reasonable living expenses or educational expenses; or

(2)(b)  real estate while it is occupied as a home by the surviving spouse, or dependent child, or parent of the resident or financially responsible person."



Section 13.  Section 53-1-413, MCA, is amended to read:

"53-1-413.   Deposit of payments and collections. (1) Except as provided in 90-7-220, 90-7-221, and subsection (2) of this section, the department shall deposit payments and collections of per diem and ancillary charges for a resident's cost of care in the state treasury to the credit of the general fund.

(2)  Payments from and collections for services provided to residents of the Montana veterans' home must be deposited in the federal special revenue fund account for the benefit of the home, and payments from. Payments and collections for services provided to residents of the Montana chemical dependency treatment center program must be deposited to an alcohol in the state special revenue account for the facility.

(3)  Payments Subject to 90-7-221, payments from a managed care contractor, provided for in 53-6-116, organization that is contracting with the department to administer a mental health managed care program for services provided by the Montana state hospital and the Montana mental health nursing care center must be deposited in the state special revenue fund account, subject to appropriation by the legislature for the benefit of those institutions."



Section 14.  Automatic assignment of resident's resources from third party. (1) Upon the provision of care to a resident, the resident is considered to have assigned to the department all third-party payments, benefits, and resources applicable to the resident's care.

(2) The department is entitled to all third-party payments, benefits, and resources assigned under this section upon demand and the submission of supporting documentation from the department to the third party. The department is entitled to collect from the third party the full amount payable by the third party, up to the resident's full cost of care. Collection is not limited to the amount that the resident or financially responsible person has been determined able to pay under 53-1-405.

(3) The fact that a managed care organization contracting with the department to administer a mental health managed care program is or may be liable to pay or has paid an amount to an institution with respect to the resident does not reduce or otherwise affect the third party's obligation to pay for the cost of care as provided in this part.

(4) The department may assign its rights under this section to a managed care organization contracting with the department to administer a mental health managed care program.

(5) If a third party that has been notified of the department's or managed care organization's claim under this section pays benefits, resources, or other amounts to a resident, financially responsible person, or another person or entity without satisfying the department's or managed care organization's claim, the third party is liable to the department or to the managed care organization for the amount that the department or managed care organization was entitled to receive under this part.



Section 15.  Codification instruction. [Section 14] is intended to be codified as an integral part of Title 53, chapter 1, part 4, and the provisions of Title 53, chapter 1, part 4, apply to [section 14].



Section 16.  Severability. If a part of [this act] is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.



Section 17.  Applicability. (1) Except as provided in subsections (2) and (3), [this act] applies to care provided on or after July 1, 1997.

(2) [Section 11] applies to proceedings begun on or after July 1, 1997.

(3) [Section 2] applies to care provided to a resident, as defined in 53-1-401, on or after [the effective date of section 2].



Section 18.  Effective dates. (1) Except as provided in subsection (2), [this act] is effective July 1, 1997.

(2) [Section 2 and this section] are effective on passage and approval.

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