§ 10:49-14.4 Recoveries involving a county welfare agency (CWA)

		(a) The purpose of this section is to define areas of responsibility and establish basic principles and procedures in those collection activities in which the Division of Medical Assistance and Health Services (DMAHS), the Division of Family Development (DFD) and/or a county welfare agency (CWA) may be involved. It is intended that maximum conservation of public funds be effected without duplication of effort. It is recognized that certain situations may fall into more than one of the following categories. Any such matter will be processed in accordance with the provisions of the first occurring applicable category.

		(b) The following pertain to incorrectly granted assistance (cash and/or medical assistance):

		1. In instances involving incorrect eligibility for medical assistance, whether or not in combination with cash assistance, the CWA shall determine the period(s) of ineligibility and ascertain from DMAHS the amount of medical assistance incorrectly granted. The CWA shall then attempt recovery of medical assistance incorrectly granted either by administrative collection, or by way of restitution in a criminal or disorderly persons proceeding.

		i. Recoveries or attempts at recoveries can be made from those persons specified in N.J.S.A. 30:4D-7i.

		2. When recovery cannot be obtained by these methods in a case generated by the Internal Revenue Service (IRS) unearned income component of the Income and Eligibility Verification System (IEVS), the case shall be referred by the CWA to DMAHS for possible initiation of recovery proceedings.

		3. When, in any other case not generated by IEVS, recovery cannot be obtained by these methods, the CWA is authorized, after securing DMAHS approval, to initiate recovery proceedings as DMAHS' agent. If the CWA does not initiate such recovery proceedings, it shall refer the case to DMAHS for possible initiation of recovery proceedings.

		4. When collection occurs in a case involving both cash assistance and medical assistance, the CWA shall, in the absence of court instruction to the contrary, apply the proceeds to the repayment of cash assistance and the reimbursement of DMAHS for medical assistance. The reimbursement shall be made payable to the Treasurer, State of New Jersey, which shall then reimburse the CWA in the amount of 25 percent of the gross recovery on a periodic basis to be determined by DMAHS.

		5. When a CWA recovers only for medical assistance improperly granted, the CWA shall remit the proceeds to DMAHS. The reimbursement shall be made payable to the Treasurer, State of New Jersey, who will then reimburse the CWA in the amount of 25 percent of the gross recovery on a periodic basis to be determined by DMAHS.

		6. When any CWA action, whether alone or in combination with DMAHS, results in a recovery of improperly granted medical assistance from a case generated by the Internal Revenue Service (IRS) unearned income component of the IEVS match, all funds recovered shall be remitted to DMAHS payable to the Treasurer, State of New Jersey, which shall then reimburse the CWA in the amount of 25 percent of the gross recovery on a periodic basis to be determined by DMAHS.

		(c) The following pertain to third-party liability claims in tort actions:

		1. Whenever either a CWA or DMAHS learns of a situation in any case in which the other may have a claim, it will notify the other.

		2. Unless the individual case circumstances intervene, the first claim after settlement or judgment is for any payments by New Jersey Medicaid or NJ FamilyCare program arising from the occurrence, notwithstanding any CWA claim for recovery of cash assistance. The next claim is that which the CWA may assert in accordance with an agreement to repay or similar document. The DMAHS and the CWA will, insofar as their controls allow, maintain priority of payment in the above order.

		(d) The following pertain to liquidation of potential resources:

		1. The CWA will participate in the liquidation of potential resources according to the Program requirements under which eligibility has been established, regardless of whether cash assistance is being granted. Notification of the potential resource to be liquidated shall be forwarded to DHSS, enabling it to seek a voluntary contribution. Sale of real property to which title is held by a CWA is subject to DFD approval in all instances regardless of the proposed distribution of the proceeds.

		2. All funds arising from the liquidation of resources and which, by action of law, regulation, or agreement with the owner, fall under the jurisdiction of either a CWA or DHSS for distribution will, insofar as possible, be allocated as follows:

		i. Proceeds will be first applied to the cash costs of liquidation, such as advertising costs and filing fees, but not including costs, such as CWA staff time, supplies, counsel fees or overhead.

		ii. Proceeds will be next applied to any claims superior to that of the CWA (for example, taxes).

		iii. Proceeds will be next applied to any funds owing to and collectible by the CWA.

		iv. Any residue remaining after the above payments are allocated would, in the absence of circumstances to the contrary, be the property of the client and thereby subject to (d)3 below.

		3. All funds properly belonging to a beneficiary free of any agency claim are to be remitted to the beneficiary as promptly as possible or otherwise disbursed at the beneficiary's instruction. The CWA will promptly reevaluate eligibility following such distribution, taking into consideration any voluntary repayment to the New Jersey Medicaid or NJ FamilyCare program.

		(e) The following pertains to recovery from estates of deceased beneficiaries:

		1. The CWA shall normally undertake recovery activity as agent for DMAHS in any case in which the CWA is or will be undertaking activities on its own account. However, in those cases where the recovery of medical assistance is possible and where the entire CWA claim is for burial expenses only, DMAHS shall initiate recovery activity inclusive of CWA burial costs. DMAHS may, in certain cases, assume direct jurisdiction in recovery of its claim concurrent with CWA activity. DMAHS shall make the CWA aware of its activity in such cases.

		2. CWA recoveries and distribution shall be in accord with the following procedures:

		i. From the proceeds of liquidation, the CWA shall first recover the amount necessary to satisfy its own claim, including costs of liquidation and the claims of other New Jersey CWAs. The CWA shall recover funds from the clearing account in the order in which the funds were received in the clearing account. If any part of any remaining surplus has been received from the proceeds of assigned life insurance for which there was a named beneficiary other than the client's estate, that surplus or the policy benefit, whichever is less, is the property of the beneficiary and should be so directed.

		ii. All other surplus funds are part of (or the entire) the client's estate and are payable to the legally designated representative of the estate. If the representative of the estate is unknown or if no representative has been appointed and there are no known next of kin, the CWA shall forward to the DMAHS an amount not to exceed the amount of the proper medical assistance claim as determined by communication with the Administrator, Bureau of Administrative Control, DMAHS. Any remaining funds will escheat to the State of New Jersey.

		iii. When there are known next of kin, the CWA shall request the next of kin to take appropriate legal action to be appointed administrator if the amount to be disbursed is greater than the claim of the New Jersey Medicaid or NJ FamilyCare program. If the claim of the New Jersey Medicaid or NJ FamilyCare program will equal or exceed the estate, the CWA shall request the next of kin to sign a consent to transfer his or her rights to the New Jersey Medicaid or NJ FamilyCare program and, upon receipt of such signed consent, the CWA shall forward the funds to DMAHS.

		iv. When the next of kin will not sign a consent to transfer his or her right to the Medicaid Agent and DMAHS and will not file to become the administrator, the CWA may, at its option, arrange for someone to file to become administrator or the CWA may refer the information to DMAHS for action.

		v. In any questions or dispute among two or more claimants on surplus funds, the CWA shall withhold payment pending resolution by mutual consent of all claimants or by court order.

		3. The Medicaid Agent or DMAHS recoveries and distribution shall be in accordance with the following procedures:

		i. DMAHS shall undertake recovery activity in medical assistance payment cases in which no CWA shall be submitting a claim. However, should information from the CWA be necessary to such DMAHS activity, the CWA shall communicate with DMAHS, supplying such material as may be required.

		ii. In cases in which DMAHS is acting for a CWA in collection of burial expenses, DMAHS shall accord payment of the burial claim priority over its own recovery.

		(f) The CWA may at any time accept an offer of voluntary repayment, either on its own behalf or on behalf of the New Jersey Medicaid or NJ FamilyCare program, up to but not in excess of the amount of assistance granted. To any inquiry as to amount granted, the CWA shall supply the appropriate information, identifying the respective amounts granted by the CWA and the Medicaid Agent or DMAHS. In the absence of instruction from the payer, the CWA will reimburse cash assistance first and then remit any balance to DHSS.

		1. Compromise settlements of medical assistance are subject to DHSS approval.

		(g) Regarding compromise settlements:

		1. Compromise settlements of cash assistance are subject to DFD approval.

		2. Compromise settlements of medical assistance are subject to DMAHS approval.

		(h) This section shall apply to all pending and future recovery cases, except that:

		1. The 25 percent incentive payments provided for in (b)4 and 5 above shall apply to all non-IEVS incorrect payment recoveries received by the CWA on or after July 1, 1993.

		2. Paragraph (b)6 above applies to all IEVS-related recoveries received on or after July 1, 1989 by either DMAHS or the CWA, whichever agency is handling the recovery.

		HISTORY:

		Amended by R.1995, d.105, effective June 19, 1995.

		See: 26 N.J.R. 3348(a), 27 N.J.R. 2466(a).

		Amended by R.1997 d.354, effective September 2, 1997.

		See: 29 N.J.R. 2512(a), 29 N.J.R. 3856(a).

		In (a), amended and deleted Division references and substituted "New Jersey Medicaid program" and "Medicaid Agent" for "DMAHS" throughout; and added (f)1.

		Amended by R.1998 d.154, effective February 27, 1998 (operative March 1, 1998; to expire August 31, 1998).

		See: 30 N.J.R. 1060(a).

		In (c), (d), (e) and (f), inserted references to NJ KidCare throughout; in (e)2iv, inserted a second reference to DMAHS; and in (e)3 and (f), inserted references to DMAHS.

		Adopted concurrent proposal, R.1998 d.487, effective August 28, 1998.

		See: 30 N.J.R. 1060(a), 30 N.J.R. 3519(a).

		Readopted the provisions of R.1998 d.154 with changes, effective September 21, 1998.

		Amended by R.2003 d.82, effective February 18, 2003.

		See: 34 N.J.R. 2650(a), 35 N.J.R. 1118(a).

		Rewrote the section.

		Amended by R.2008 d.230, effective August 4, 2008.

		See: 40 N.J.R. 984(a), 40 N.J.R. 4531(a).

		Section was "Recoveries involving county board of social services (CBOSS)". Substituted "CWA" for "county board of social services (CBOSS)" throughout; in (a), substituted "welfare agency (CWA)" for "board of social services (CBOSS)"; in (b)3, inserted a comma following "When", "authorized" and "approval"; in the introductory paragraph of (c), substituted "third-party" for "third party"; in (c)2, inserted a comma following "occurrence" and substituted "CWA" for "(CBOSS)"; in (d)2i, inserted a comma following the first occurrence of "fees" and the second occurrence of "costs"; in the introductory paragraph of (e)2, substituted "CWA" for "County board of social services (CBOSS)"; and in (e)2i, substituted "CWAs" for "county board of social services (CBOSS)s".