SB 264 — AN ACT CONCERNING A QUALIFIED DEDUCTION FROM MEDICAID APPLIED INCOME FOR CONSERVATOR COSTS.

PCAF=Probate Court Administration Fund Municipal Impact:

None Explanation The bill results in the impact described below due to requiring the state to deduct certain conservatorship expenses when calculating the amount of income an institutionalized Medicaid enrollee must contribute towards his or her care, to the extent allowed under federal law.

The bill results in increased state Medicaid costs of approximately $675,000 in FY 23 and $1,350,000 in FY 24 ($675,000 in FY 24 after a transfer from the Probate Court Administration Fund) by requiring the Department of Social Services (DSS) to deduct certain conservator expenses when calculating a Medicaid-eligible nursing home resident’s appliedincome.

ThisassumesastartdateofJanuary 1,2023.In addition, DSS willincur one-time Other Expensescostsofapproximately $500,000 in FY 23 to enhance the state's eligibility system in order to implement the applied income deductions specified in the bill.

The system enhancement costs are anticipated to result in a federal grants revenue gain of $375,000, which reflects federal reimbursement for such costs under Medicaid.

sSB264 / File No.

146 4 sSB264 File No.

146 These provisions also result in a net savings to the Probate Court Administration Fund (PCAF) of $900,000 in FY 23 and $1,125,000 in FY associated with requiring the Probate Court to transfer funds to DSS equal to one-half the amount deducted for conservator expenses in the prior fiscal year, beginning in FY 23.

In FY 21, the Probate Court supported conservator expenses for approximately 2,500 Medicaid individuals in long-term care.

The estimated impact to the PCAF and DSS is detailed in the tables below.

Probate Court PCAF $ FY 23 FY 24 FY 25 Reduction in Conservator Reimbursement/Fee Waivers 900,000 1,800,000 1,800,000 Transfer to DSS (675,000) (1,350,000) Net Impact to PCAF 900,000 1,125,000 450,000 DSS Medicaid $ FY 23 FY 24 FY 25 Gross Cost 1,350,000 2,700,000 2,700,000 State Share 675,000 1,350,000 1,350,000 Transfer from Probate - 675,000 1,350,000 Net Impact to DSS 675,000 675,000 - DSS Other Expense/Federal Grants $ FY 23 FY 24 FY 25 Impact System Enhancements 500,000 - - Federal Grants Rev 375,000 - - Net Impact to State 125,000 - - The actual cost to DSS will depend on (1) the amount of the conservator expenses (including conservator compensation), Probate Court filing fees/expenses, and premiums for any Probate Court bonds counted as a deduction from a beneficiary’s income, and (2) the commensurate shift to the state for Medicaid costs which would have been paid by the beneficiary.

The bill will also result in a cost to the state Medicaid program to the sSB264 / File No.

146 5 sSB264 File No.

146 extent the penalty period that would have been imposed on an individual, making them temporarily ineligible for Medicaid long term care services, is either reduced or eliminated.

The cost to the state Medicaid program will depend on the reduction or elimination of the penalty period which would have been imposed on the individual and the scope of services that otherwise would not be eligible for Medicaid coverage.

The Out Years The annualized ongoing fiscal impact is detailed in the table above.

sSB264 / File No.

146 6 sSB264 File No.

146 OLR Bill Analysis sSB 264 AN ACT CONCERNING A QUALIFIED DEDUCTION FROM MEDICAID APPLIED INCOME FOR CONSERVATOR COSTS.

SUMMARY This bill requires the Department of Social Services (DSS) commissioner to amend the Medicaid state plan by December 31, 2022, to allow the deduction of certain conservator expenses when calculating a Medicaid eligible nursing home resident’s applied income.

In general, these residents must spend any income they have on their care, except for certain allowances (i.e., applied income).

In doing so, the bill requires the DSS commissioner, starting by December 31, 2023, to annually calculate the total conservatorship expenses deducted from a nursing home resident’s applied income in the preceding fiscal year and inform the probate court administrator in writing of the amount.

Within 30 days after receiving the commissioner’s calculation, the probate court administrator must transfer half of the conservatorship expenses for that year from the Probate Court Administration fund to DSS.

The bill also prohibits DSS from treating any probate court-approved conservator or fiduciary fees as an improper asset transfer for purposes of imposing a penalty period.

Lastly, the bill increases, from $50 to $90, the minimum monthly compensation for a conservator of a person receiving state assistance.

EFFECTIVE DATE:

Upon passage APPLIED INCOME sSB264 / File No.

146 7 sSB264 File No.

146 Medicaid State Plan Amendment Under the bill, the DSScommissioner must amend the Medicaid state plan to allow the deduction from applied income of the following conservatorship expenses:

1.

compensation for the individual’s conservator, in an amount the probate court approves or $90 per month, whichever is greater;

2.

probate court filing fees and expenses, including conservatorship fees, fiduciary accounting fees, and miscellaneous fees (see BACKGROUND);

3.

premiums for any probate bond the court requires;

and 4.

any other fiduciary expenses approved by the probate court that are allowed under federal law.

The commissioner must seek approval from the federal Centers for Medicare and Medicaid Services (CMS) for the state plan amendment.

The bill applies to conservator expenses incurred on or after October 1, 2022, or the date CMS approves the state plan amendment, whichever is later.

PENALTY PERIOD Under federal law, DSS must impose a penalty period when individuals transfer assets for less than fair market value in the 60 months before applying for Medicaid coverage (i.e., improper asset transfer).

The bill prohibits DSS from treating any probate court- approved conservator or fiduciary fees as an improper asset transfer.To be exempt from the penalty (1) applicants must provide documentation of the fees and (2) the services must be provided according to existing court regulations.

By law, the penalty period (in months) is generally calculated by dividing the value of all assets transferred during the 60 months before application by the average monthly cost to a private patient of nursing facility services in the state or community.

Medicaid does not pay for sSB264 / File No.

146 8 sSB264 File No.

146 long-term services and supports during the penalty period.

BACKGROUND Probate Court Fees By law, the general fee for most probate court matters related to conservatorship is $225 (CGS § 45a-106a).

This includes filing motions to (1)appoint aconservator,(2)change residence or placement inalong- term care facility, and (3) terminate a conservatorship.

Under the law, the basic fee for a fiduciary to file an account in the probate court in any matterotherthanestatesettlementisatleast$50andupto$500peryear, based on a statutory formula (CGS § 45a-108a).

The lawalso allowstheprobate court to charge feesfor miscellaneous expenses (i.e., filing or copying certain documents) (CGS § 45a-109).

The law allows an indigent petitioner or applicant to the probate court to apply for a fee waiver (CGS § 45a-111).

COMMITTEE ACTION Aging Committee Joint Favorable Substitute Yea 15 Nay 0 (03/10/2022) sSB264 / File No.

146 9