17-1705

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HAWAII ADMINISTRATIVE RULES
TITLE 17
DEPARTMENT OF HUMAN SERVICES
SUBTITLE 12
MED-QUEST DIVISION
CHAPTER 1705
MEDICAL ASSISTANCE RECOVERY
Subchapter 1 	General Provisions
§17-1705-1 	Purpose
§17-1705-2 	Definitions
§17-1705-3 	Administrative procedures
§§17-1705-4 to 17-1705-5 	(Reserved)
Subchapter 2 	Assignment of and Cooperation in
Obtaining Third Party Payments
§17-1705-6 	Purpose
§17-1705-7 	Medical assignment requirements
§17-1705-8 	Cooperation requirements
§17-1705-9 	Good cause determination
§17-1705-10 	Denial or termination of medical
assistance
§§17-1705-11 to 17-1705-15 	(Reserved)
Subchapter 3 	Assignment of and Cooperation in
Obtaining Medical Support
§17-1705-16 	Purpose
§17-1705-17 	Assignment of rights to support
§17-1705-18 	Cooperation in obtaining support
§17-1705-19 	Determination of good cause for refusing
to cooperate
§17-1705-20 	Circumstances under which cooperation
may be against the best interest of
the child
§17-1705-21 	Granting or continuation of assistance
§17-1705-22 to 17-1705-25 	(Reserved)
Subchapter 4 	Good Cause Claim Procedures

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§17-1705-26 	Purpose
§17-1705-27 	Notice to applicant of right to claim
good cause
§17-1705-28 	Processing good cause claims
§17-1705-29 	Evidence
§17-1705-30 	Renewal of good cause claim
§§17-1705-31 to 17-1705-35 	(Reserved)
Subchapter 5 	Third Party Liability
§17-1705-36 	Definitions
§17-1705-37 	Determining liability of third parties
§17-1705-38 	Medical payment involving third party
§§17-1705-39 to 17-1705-43 	(Reserved)
Subchapter 6 	Recovery of Overpayment to Providers
§17-1705-44 	Definitions
§17-1705-45 	Recoupment of overpayment to providers
§§17-1705-46 to 17-1705-50 	(Reserved)
Subchapter 7 	Recipient Recovery
§17-1705-51 	Definitions
§17-1705-52 	Recovery of medical care payments from
recipients
§17-1705-53 	Recovery of misspent funds
§17-1705-54 	Fraud
§17-1705-55 	Suspension and waiver of overpayment
§17-1705-56 	Limiting provisions
§§17-1705-57 to 17-1705-65 	(Reserved)
Subchapter 8 	Third Party Liability Subrogation
§17-1705-66 	Definitions
§17-1705-67 	Accident liability
§17-1705-68 	Termination or waiver of subrogation
Historical Note: 	This chapter is based substantially
upon chapter 17-1352. [Eff 06/29/92; R 08/01/94 	]
SUBCHAPTER 1
GENERAL PROVISIONS

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§17-1705-1 	Purpose. 	The purpose of this chapter
is to establish the requirements for applicants and
recipients of medical assistance. 	Applicants and
recipients shall:
(1) 	Assign their rights to third party payments
and medical support;
(2) 	Cooperate in obtaining third party payments
for medical assistance, pursuing any third
party who may be liable for medical support,
and obtaining child support; and
(3) 	Be required to satisfy all conditions set
forth by the third party to receive coverage,
to the extent coverage is available through
that third party, before Medicaid
reimbursement is allowed. 	[Eff 08/01/94;
am 02/07/05] (Auth: 	HRS §346-14) (Imp: 	42
C.F.R. §§433.138, 433.145, 433.146, 433.147;
45 C.F.R. §§232.11, 232.12)
§17-1705-2 	REPEALED. 	[R 09/30/13]
§17-1705-3 	Administrative procedures. 	(a) 	The
adverse action notice requirements of chapter 17-1713
shall apply unless otherwise indicated in this chapter.
(b) 	The administrative hearing requirements of
chapter 17-1703 shall apply.
(c) 	The department shall restore to the
individual any future rights to benefits assigned to
the department when medical assistance terminates and
after all medical expenses have been met.
[Eff 08/01/94 	] (Auth: 	HRS §346-14) (Imp: 	HRS
§346-14; 42 C.F.R. §433.148; 45 C.F.R. §205.10)
§§17-1705-4 to 17-1705-5 	(Reserved).
SUBCHAPTER 2
ASSIGNMENT OF AND COOPERATION IN OBTAINING
THIRD PARTY PAYMENTS
§17-1705-6 	Purpose. 	The purpose of this chapter
is to establish the requirements for assignment of and

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cooperation in obtaining third party payments that
applicants and recipients shall be required to meet to
receive medical assistance. 	[Eff 08/01/94 	]
(Auth: 	HRS §346-14) 	(Imp: 42 C.F.R. §433.137;
433.138; 45 C.F.R. §232.13, HRS §346-37)
§17-1705-7 	Medical assignment requirements. 	(a)
All individuals applying for or receiving medical
assistance shall assign to the department or health
plan:(1) 	The individual's rights to any third party
payments; and
(2) 	The rights of any other family member
included in the application or receiving
assistance for whom the applicant or
recipient can legally make an assignment.
(b) 	Assignment of right to payments shall not
include assignment of rights to medicare benefits.
(c) 	An applicant or recipient shall inform the
department or health plan of an involvement in an
accident within thirty days of the accident.
[Eff 08/01/94 	] 	(Auth: 	HRS §346-14) 	(Imp: 	HRS
§346-37(b); 42 C.F.R. §§433.145, 433.146)
§17-1705-8 	Cooperation requirements. 	(a) 	All
applicants and recipients of medical assistance shall
be required to cooperate with the department or health
plan in obtaining third party payments unless there is
good cause for refusing to cooperate.
(b) 	Cooperation shall include:
(1) 	Identifying any third party who may be
liable for services covered under the
Medicaid program;
(2) 	Providing relevant information or
attesting to the lack of information,
under penalty of perjury, to assist the
department or health plan in pursuing
any such potentially liable third party;
(3) 	Appearing at a department designated
location to provide information or
evidence relevant to the case;
(4) 	Appearing as a witness at a court or
other proceeding;

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(5) 	Paying to the department or health plan
any support or medical care funds
received that are covered by the
assignment of rights; and
(6) 	Taking any other reasonable steps to
assist in securing medical support and
payments.
(c) 	All applicants and recipients of medical
assistance shall be required to apply, as a condition
of eligibility, for Medicare coverage if:
(1) 	The individual may meet the eligibility
criteria for the Medicare program, and
(2) 	The state agrees to pay any applicable
premiums and cost-sharing, except for those
related to Medicare part D. 	[Eff 08/01/94;
am 01/29/96; am 12/26/05; am 09/30/13]
(Auth: 	HRS §346-14) 	(Imp: 	42 C.F.R.
§433.138; §433.145; 45 C.F.R. §232.13; Pub.
L. 108-173)
§17-1705-9 	Good cause determination. 	(a) 	The
department shall make a determination that cooperation
is against the best interests of the individual or
other family member to whom financial or medical
assistance is being furnished when it is anticipated
that cooperation will result in reprisal against, and
cause physical or emotional harm to, the individual or
other family member.
(b) 	When the department determines that good
cause exists, the department shall make a further
determination of whether collection activities could
proceed without risk of harm to the family provided the
activities will not involve the family's participation.
(c) 	The determination shall be made on a
case-by-case evaluation of the circumstances and the
family shall be notified of the decision.
(d) 	The good cause claim procedures of subchapter
4 shall apply. 	[Eff 08/01/94 	] (Auth: 	HRS
§346-14) (Imp: 	42 C.F.R. §433.147; 45 C.F.R. §232.40)
§17-1705-10 	Denial or termination of medical
assistance. 	(a) 	The department shall deny or
terminate medical assistance to any applicant or

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recipient who refuses to cooperate in obtaining third
party payments, unless good cause exists.
(b) 	The department shall deny or terminate
medical assistance to applicants or recipients who
refuse to assign the individual's own rights or the
rights of any other family member for whom the
applicant or recipient can legally make an assignment.
(c) 	The department shall provide assistance to
individuals who:
(1) 	Cannot legally assign the individual's own
rights or the rights of other family members;
(2) 	Have good cause for refusing to cooperate;
and
(3) 	Would otherwise be eligible for assistance
but for the refusal by a person legally able
to make the assignment or to cooperate.
(d) 	Any individual denied or terminated for
medical assistance as a result of refusal to assign the
individual's rights shall have the right to a fair
hearing. 	[Eff 08/01/94 	] 	(Auth: 	HRS §346-14)
(Imp: 42 C.F.R. §433.148)
§§17-1705-11 to 17-1705-15 	(Reserved).
SUBCHAPTER 3
ASSIGNMENT OF AND COOPERATION IN OBTAINING
MEDICAL SUPPORT
§17-1705-16 	Purpose. 	The purpose of this
subchapter is to establish the requirements for
applicants and recipients of medical assistance.
Applicants and recipients shall:
(1) 	Assign their rights to medical support; and
(2) 	Cooperate in obtaining medical support.
[Eff 08/01/94 	] (Auth: 	HRS §346-14)
(Imp: 	HRS §346-37.1; 42 C.F.R. §§433.146,
433.147; 45 C.F.R. §§232.11, 232.12)
§17-1705-17 	Assignment of rights to support. 	(a)
All individuals shall assign to the state any rights
the individuals may have to receive medical support
payments on the individual's own behalf or on behalf of

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any other family member applying for or receiving
assistance.
(b) 	If the caretaker relative with whom the child
is living, fails to complete the assignment, the
caretaker relative shall be ineligible for medical
assistance.
(c) 	The department shall provide medical
assistance to individuals who would otherwise be
eligible but for the refusal of the caretaker relative
to complete the assignment. [Eff 08/01/94 	]
(Auth: 	HRS §346-14) (Imp: 	HRS §346-37.1; 42 C.F.R.
§433.148; 45 C.F.R. §§ 232.11, 232.13, 234.60)
§17-1705-18 	Cooperation in obtaining support.
(a) 	Each individual applying for or receiving medical
assistance shall be required to cooperate with the
department in:
(1) 	Identifying and locating the parent of the
child for whom medical services are being
claimed;
(2) 	Establishing the paternity of a child born
out of wedlock for whom medical services are
being claimed;
(3) 	Obtaining support payments due the individual
and the child for whom medical services are
being claimed; and
(4) 	Obtaining any other payments due the
individual and the child for whom medical
services are being claimed.
(b) 	An individual may be required to:
(1) 	Appear in court or at the department's child
support enforcement agency as maybe
necessary, to provide information and
evidence, known to, possessed by, or
obtainable by the individual that may be
achieving the objective of enforcing child
support obligations;
(2) 	Appear as a witness in any legal proceedings;
(3) 	Provide information, or attest to the lack of
information, possessed or reasonably
obtainable by the individual under penalty of
perjury; and
(4) 	Report to the department any child support
payments received from the absent parent.
(c) 	The department shall provide medical
assistance to individuals who would otherwise be
eligible for medical assistance but for the refusal by

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the caretaker relative to cooperate. 	[Eff 08/01/94 	]
(Auth: 	HRS §346-14) Imp: 	HRS §346-37.1, 42 C.F.R.
§§433.147. 433.148; 45 C.F.R. §§232.12, 234.60)
§17-1705-19 	Determination of good cause for
refusing to cooperate. 	(a) 	The department shall
determine whether good cause exists for the family's
failure to comply with the requirements of section
17-1705-18:
(1) 	With respect to establishing paternity or
securing support for a child, the department
shall make a determination that good cause
exists only if the evidence establishes that
cooperation is against the best interest of
the child.
(2) 	With respect to securing support for
individuals not covered by paragraph (1), the
department shall make a determination that
good cause exists only if the evidence
establishes that cooperation will result in
reprisal against or cause physical or
emotional harm to the applicant or recipient.
(b) 	When the department determines that good
cause exists, the department shall make a further
determination of whether child or medical support
enforcement could proceed without risk of harm to the
family provided the enforcement or collection
activities will not involve the family's participation.
(c) 	The good cause determination shall be made on
a case-by-case evaluation of the circumstances and
evidence provided. 	[Eff 08/01/94 	] (Auth: 	HRS
§346-14) (Imp: HRS §346-37.1; 42 C.F.R. §433.147; 45
C.F.R. §232.40)
§17-1705-20 	Circumstances under which cooperation
may be against the best interest of the child. 	(a)
Cooperation shall be against the best interest of the
child only if it is reasonably anticipated to result in
physical or emotional harm to the child or to the
parent or caretaker relative, and the harm reduces the
parent's or caretaker relative's capacity to care for
the child adequately.
(b) 	Physical or emotional harm shall be of a
serious nature that would affect the parent's or
caretaker relative's ability to function if cooperation
is required.

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(c) 	A determination that good cause exists shall
also be applied in cases where:
(1) 	The child was conceived as a result of incest
or forcible rape;
(2) 	Legal proceedings for the adoption of the
child are pending before a court; or
(3) 	The individual is currently being assisted by
a public or private licensed social agency
toresolve the issue of whether to keep the
child or relinquish the child for adoption.
The discussions on whether to keep or give up
the child shall not have gone on for more
than three months. 	[Eff 08/01/94 	]
(Auth: 	HRS §346-14) 	(Imp. 	HRS §346-37.1;
42 C.F.R. §433.147; 45 C.F.R. §232.42)
§17-1705-21 	Granting or continuation of
assistance. 	The department shall not deny, delay, or
discontinue medical assistance pending the final good
cause determination if the individual has complied with
the requirement to provide evidence and all other
eligibility requirement have been met.
[Eff 08/01/94 	] (Auth: 	HRS §346-14) (Imp. 	HRS
§346-14; 42 C.F.R. §433.147; 45 C.F.R. §232.46)
§§17-1705-22 to 17-1705-25 	(Reserved).
SUBCHAPTER 4
GOOD CAUSE CLAIM PROCEDURES
§17-1705-26 	Purpose. 	This subchapter establishes
the procedures for providing notice and processing an
individual's good cause claim for refusing to cooperate
in obtaining third party payments for medical
assistance or securing medical support.
[Eff 08/01/94 	] (Auth: 	HRS §346-14) (Imp: 	HRS
§346-14; 42 C.F.R. §433.147; 45 C.F.R. §§232.40,
232.41, 232.43, 232.47)
§17-1705-27 	Notice to applicant of right to claim
good cause. 	(a) 	The department shall notify
applicants and recipients of medical assistance of the

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right to claim good cause as an exception to the
cooperation requirement.
(b) 	The applicant or recipient shall be informed
in writing that:
(1) 	The potential benefits a child may derive
from establishing paternity and securing
support and the potential benefits for
providing information to assist the
department in pursuing third party liability
for medical services;
(2) 	By law, cooperation in establishing
paternity, securing support, and identifying
and providing information to assist the
department in pursuing third party liability
for medical services is a condition of
eligibility;
(3) 	An unexcused refusal to cooperate shall
result in loss of medical eligibility for the
needy caretaker relative;
(4) 	The individual has the right to claim good
cause for refusing to cooperate and if the
department determines there is good cause,
the individual shall be excused from the
cooperation requirements of sections
17-1705-8 and 17-1705-18; and
(5) 	Upon an individual's request or following
receipt of a good cause claim, the department
shall provide further notice to the
individual with additional details concerning
a good cause claim.
(c) 	A second notice shall be provided in writing,
to applicants or recipients who claim good cause or who
notify the department of the individual's intention to
claim good cause.
(d) 	The second notice shall be provided promptly,
without the applicant or recipient having to reschedule
a follow-up appointment. 	The notice shall inform the
individual that:
(1) 	The individual shall be required to provide
corroborative evidence of a good cause
circumstance as specified in section
17-1705-29, and when requested, shall furnish
sufficient information in order to allow the
department to investigate the circumstances
of the claim;
(2) 	Upon the individual's request, the department
will provide reasonable assistance in
obtaining the corroborative evidence;

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(3) 	The department shall determine whether
cooperation would be against the best
interest of the child for whom child or
medical support would be sought or the
individual for whom third party liability for
medical services would be sought based on the
corroborative evidence supplied;
(4) 	The circumstances under which cooperation
shall be determined to be against the best
interests of the child or individual;
(5) 	The state Title IVD child support enforcement
agency (CSEA) may review the department's
findings and basis for a good cause
determination and may participate in any
administrative hearings concerning the issue
of good cause; and
(6) 	CSEA may attempt to establish paternity and
collect support and the department may
attempt to collect third party information
and payment when the department determines
that this can be done without risk to the
applicant or recipient if done without their
participation. 	[Eff 08/01/94 	] (Auth:
HRS §346-24) (Imp: 	HRS §346-37.1; 42 C.F.R.
§§433.147, 433.148; 45 C.F.R. §232.40)
§17-1705-28 	Processing good cause claims. 	(a)
An applicant or recipient who refuses to cooperate 	and
who claims to have good cause shall:
(1) 	Specify the circumstances which the
individual believes establishes good cause to
be excused from the cooperation requirement;
(2) 	Provide corroboration of the good cause
circumstances in accordance with section
17-1705-29 within twenty days from the day a
good cause claim is filed;
(3) 	Provide additional corroborative evidence the
department deems necessary to make a good
cause determination; and
(4) 	Be notified promptly by the department of the
specific types of additional evidence
required.
(b) 	Where a claim is based upon the individual's
anticipation of physical harm and corroborative
evidence is not submitted, the department may at its
own discretion, determine good cause based upon the
individual's statement and upon further investigation.

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(c) 	The department's determination of whether
good cause exists shall be made within forty-five
calendar days from the day the good cause claim is made
except when:
(1) 	The department determines it needs additional
time because the information required to
verify the claim cannot be obtained within
forty-five days; or
(2) 	The individual cannot provide corroborative
evidence within twenty days from the day the
claim is made. 	[Eff 08/01/94 	] (Auth:
HRS §346-14) (Imp: 	HRS §346-37.1; 	42 C.F.R.
§433.147; 45 C.F.R. §§232.41, 232.43)
§17-1705-29 	Evidence. 	Good cause shall be
corroborated with the following types of evidence:
(1) 	Birth certificates or medical or law
enforcement records which indicate that the
child was conceived as a result of incest or
forcible rape;
(2) 	Court documents which indicate legal
proceedings for adoption are pending before a
court;
(3) 	Court, medical, child protective services,
social services, psychological, or law
enforcement records which indicate that the
alleged father, absent parent, or others may
inflict physical or emotional harm on the
child or other family member;
(4) 	Medical records which indicate emotional
health history and present emotional health
status of the child or family member or
written statements from mental health
professionals indicating a prognosis
concerning the diagnosis or emotional health
of the individual or family if cooperation is
required;
(5) 	A written statement from a public or licensed
private social agency that the parent or
other caretaker is being assisted to resolve
the issue of where to keep the child or
relinquish the child for adoption; or
(6) 	Sworn notarized statements from persons other
than the individual with knowledge of the
circumstances which provide the basis for the
good cause claim. 	[Eff 08/01/94 	]

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(Auth: 	HRS §346-14) (Imp: 	HRS §346.37.1; 42
C.F.R. §433.147; 45 C.F.R. §232.43)
§17-1705-30 	Renewal of good cause claim. 	(a) 	In
all cases where an initial determination has been made
that there is good cause for refusal to cooperate, the
recipient shall have the responsibility of renewing a
good cause claim at each annual redetermination of
eligibility.
(b) 	If the department determines that
circumstances have changed and good cause no longer
exists, the department shall proceed to enforce the
cooperation requirements. 	[Eff 08/01/94 	] 	(Auth:
HRS §346-14) (Imp: 	HRS §346-14; 42 C.F.R. §433.147; 45
C.F.R. §232.47)
§§17-1705-31 TO 17-1705-35 	(Reserved).
SUBCHAPTER 5
THIRD PARTY LIABILITY
§17-1705-36 	REPEALED. 	[R 09/30/13]
§17-1705-37 	Determining liability of third
parties. 	The department or health plan shall determine
the legal liability of third parties to pay for
services under the medical assistance program.
[Eff 08/01/94 	] 	(Auth: 	HRS §346-14) 	(Imp: 	HRS
§346-37; 42 C.F.R. §433.138)
§17-1705-38 	Medical payment involving third
party. (a) 	The liability of a third party shall be
treated as a resource applicable to the cost of needed
medical services when:
(1) 	It has been verified that a legal obligation
actually exists; and
(2) 	The amount of the obligation may be
determined within thirty days from the time
of the recipient's need for medical care.
(b) 	No Medicaid payment shall be made under a
refund plan for that portion of cost for which a third

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party has been determined to be liable and
reimbursement is forthcoming.
(c) 	If a liability by an identified third party
exists, the recipient shall be required to satisfy all
conditions set forth by that third party to receive
coverage, to the extent coverage is available through
that third party, before Medicaid payment is allowed.
(d) 	When the existence or extent of third party
liability is in question, medical assistance payments
may be made in:
(1) 	Part, if the recipient has excess income and
other assets; or
(2) 	Whole, if the recipient accepts, in writing,
an assignment of the recipient's third party
payment to refund the department.
However, when third party policy prohibits assignment
of payment, the recipient, in writing, shall agree to
refund the department or health plan upon being paid.
(e) 	After a claim is paid or medical services are
rendered, if the department or health plan learns of
the existence of a liable third party, the department
or health plan shall seek reimbursement from the third
party within thirty days after the end of the month it
learned of the existence of the liable third party.
(f) 	The department or health plan shall suspend
or terminate an effort to seek reimbursement from a
liable third party if it determines that the effort
would not be cost effective because the amount it
reasonably expects to recover will be less than the
cost of recovery.
(g) 	The department or health plan shall
accumulate billings with respect to a liable third
party when making a decision whether to seek recovery.
When the accumulated amount is $500 or more, the
department or health plan shall seek recovery.
[Eff 08/01/94; am 11/25/96; am 04/11/03;
am 02/07/05 	] 	Auth: 	HRS §§346-14, 346-37) 	(Imp:
HRS §346-37; 42 C.F.R. §433.139)
§§17-1705-39 to 17-1705-43 	(Reserved).
SUBCHAPTER 6
RECOVERY OF OVERPAYMENT TO PROVIDERS

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§17-1705-44 	REPEALED. 	[R 09/30/13]
§17-1705-45 	Recoupment of overpayment to
providers. 	(a) 	The department shall recoup
overpayment to providers when overpayment occurred for
reasons including, but not limited to one of the
following:
(1) 	Ineligible provider;
(2) 	Noncovered service;
(3) 	Noncovered drug;
(4) 	No approved prior authorization when a
service requires one;
(5) 	Incorrect payment allowance identified
through post payment review by department
staff; or
(6) 	Claim processing error.
(b) 	The responsibility of recoupment may be
assigned to the fiscal agent with whom the department
has a contract. 	[Eff 08/01/94 	] 	(Auth: 	HRS
§346-14) 	(Imp: 	HRS §346-44)
§§17-1705-46 to 17-1705-50 	(Reserved).
SUBCHAPTER 7
RECIPIENT RECOVERY
§17-1705-51 	REPEALED. 	[R 09/30/13]
§17-1705-52 	Recovery of medical care payments
from recipients. 	(a) 	Payments made to medical care
providers and payments made to health plans shall be
recovered by the department from individuals who:
(1) 	Provided erroneous information in qualifying
for medical assistance;
(2) 	Failed to report a change in circumstances
which would have rendered the individual or
household ineligible for continued medical
assistance;
(3) 	Failed to notify the department that a family
member is no longer a member of the
assistance household;

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(4) 	Failed to pay the premium-share assessed to
the family; or
(5) 	Were adversely affected by a fair hearing
decision, and who received medical assistance
services pending the fair hearing decision.
(b) 	That portion of the payment to the health
plan that is assessed to the recipient as the
premium-share shall be recovered from recipients who
are subject to recovery.
(c) 	Recovery of payments shall continue even
though the individual is no longer a recipient of
medical assistance. 	[Eff 08/01/94; am 01/29/96 	]
(Auth: 	HRS §346-14; 42 C.F.R. §431.230) 	(Imp: 	HRS
§346-44)
§17-1705-53 	Recovery of misspent funds. 	(a)
Individuals subject to recovery of misspent funds under
the medical assistance program shall be provided
written notice by the department stating:
(1) 	The reasons, date, and the amount of the
alleged misspent funds;
(2) 	Proposed amount to be repaid each month;
(3) 	Period over which the repayment shall be
made;
(4) 	Method by which the proposed overpayment
shall be recovered; and
(5) 	The right to request a hearing if the
individual disagrees with the department's
proposed action.
(b) 	The department may refer an individual to the
comptroller of the State to recover overpayments from
the individual's personal income tax refund when:
(1) 	There is a repayment plan initiated against
the individual;
(2) 	The individual is delinquent in repayment;
and
(3) 	The amount owed by the individual exceeds
$25.
(c) 	The department may place a lien on the real
and personal property of an individual subject to
recovery of misspent medical assistance funds. Any lien
imposed with respect to this subsection shall be
dissolved upon the individual's payment of the misspent
funds. 	[Eff 08/01/94; am 11/25/96 	] 	(Auth: 	HRS
§§231-51, 231-53, 346-14) 	(Imp: 	HRS §346-44)

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§17-1705-54 	Fraud. 	If fraud is suspected in any
misspent funds under the medical assistance program,
the department shall refer the case to the appropriate
agency to pursue the investigation of suspected fraud
and take action as deemed appropriate.
[Eff 08/01/94 	] 	(Auth: 	HRS §346-14) 	(Imp: 	HRS
§346-44)
§17-1705-55 	Suspension and waiver of overpayment.
(a) 	The collection activities on a closed medical
assistance case may be suspended when:
(1) 	The department has sent one demand letter
requesting payment for overpayments under
$100, two demand letters for overpayments
between $100 and $400, three demand letters
for more than $400 and the department's
investigative and recovery services office
determines that the cost of further
collection action is likely to exceed the
amount that can be recovered; or
(2) 	The assistance unit cannot be located.
Collection activities shall not be suspended
until the department has initiated action to
locate the former recipients. 	In locating
the former recipients, the department shall
use appropriate data sources such as state
unemployment insurance files, state
automobile registration, and the Social
Security Administration's benefit data
exchange (BENDEX).
(b) 	Collection activities shall not be suspended
on any case where the court has ordered an individual
to repay overpayments to the department.
(c) 	An overpayment on a closed medical assistance
case may be determined uncollectible and the
overpayment waived when:
(1) 	Collection activities have been suspended;
and
(2) 	No payments have been collected for at least
three consecutive years; or
(3) 	All of the members of the assistance unit
have died. 	[Eff 08/01/94 	] 	(Auth:
HRS §§346-14, 346-44) 	(Imp: 	HRS §346-44)
§17-1705-56 	Limiting provisions. 	(a) No liens or
encumbrances shall be imposed upon both real and

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personal property of applicants or recipients prior to
their deaths except under the circumstances described
in section 17-1705-53 or 17-1705-57.
(b) 	No adjustment or recovery shall be made for
correctly made medical assistance payments, except in
the case of the following:
(1) 	Individuals in nursing facilities,
intermediate care facilities for the mentally
retarded, or other medical institutions for
all individuals on or after October 1, 1993;
or
(2) 	Benefits paid on or after October 1, 1993 for
individuals age fifty-five or older at the
time services were received.
(c) 	Adjustments or recovery under subsection (b)
can be made only after the death of the surviving
spouse, if any, and when there is no surviving child
who is under twenty-one years, or child who is blind or
disabled as defined in chapter 17-1719.
(d) 	Adjustment or recovery, if any, shall be from
the deceased recipient's estate or upon the sale of
property subject to lien imposed under section
17-1705-57.
(e) 	Recovery may be waived due to hardship for
the period the following conditions exist:
(1) 	The estate subject to recovery is the sole
income-producing asset of the survivors and
the following conditions are met:
(A) 	The estate is a family farm or other
family business;
(B) 	The income produced by the asset is not
greater than one hundred per cent of the
federal poverty guidelines for the
number of survivors solely dependent on
such asset.
(2) 	The estate is a homestead of modest value
that is occupied by survivors who meet the
following conditions:
(A) 	Lawfully resided in the home for a
continuous period that started at least
three months immediately before the
recipient's admission to a medical
institution and provided care to the
recipient during that period that
allowed the recipient to reside at home
rather than in an institution and has
continuously lived in the home since the
admission;

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(B) 	Do not own any real property other than
an interest in the home; and
(C) 	Have income not greater than one hundred
per cent of the federal poverty limit.
[Eff 	08/01/94; am 01/29/96; am
11/25/96; am 09/30/13] 	(Auth: 	HRS
§346-14) (Imp: 	HRS §346-37; 42 C.F.R.
§433.36; 42 U.S.C. §1396p)
§17-1705-57 	Liens on real property of
institutionalized individuals. 	(a) 	A lien may be
placed on the real property of a medically
institutionalized individual 	for the amount of medical
assistance received, after a determination by the
department that the individual cannot reasonably be
expected to be discharged from the medical institution
and returned home.
(b) 	A lien may not be placed on the home property
of a medically institutionalized individual if any of
the following individuals are lawfully residing in the
home:(1) 	The individual's spouse;
(2) 	The individual's dependent child; or
(3) 	The individual's sibling who has an equity
interest in the home and who was residing in
the home for a period of at least one year
prior to the individuals admission to the
medical institution.
(c) 	The department shall not recover funds from
the lien when the individual has:
(1) 	A surviving spouse; or
(2) 	A surviving dependent child.
(d) 	The department shall not recover funds from
the lien when the individual has:
(1) 	A sibling who was residing in the home for a
period of at least one year immediately
before the individual's admission to the
medical institution; or
(2) 	A non-dependent child who was residing in the
home for a period of at least two years
immediately before the individual's admission
to the medical institution and who provided
care to the individual that allowed the
individual to reside at home rather than in
an institution; who has lawfully resided in
the home on a continuous basis as a sole
residence, without interruption or break,

UNOFFICIAL
1705-20
since the date of the individual's admission
to the medical institution.
(e) 	Any lien imposed with respect to this section
shall be dissolved upon the individual's discharge from
the medical institution and return home.
[Eff 01/29/96; am 11/25/96 	] (Auth: 	HRS §346-14)
(Imp: 	HRS §§346-29.5, 346-37; 42 C.F.R. §433.36; 42
U.S.C. §1396p)
§§17-1705-58 to 17-1705-65 	(Reserved).
SUBCHAPTER 8
THIRD PARTY LIABILITY SUBROGATION
§17-1705-66 	REPEALED. 	[R 09/30/13]
§17-1705-67 	Accident liability. 	(a) 	An
applicant or recipient shall inform the department or
health plan of an involvement in an accident within
thirty days of the accident.
(b) 	The applicant or recipient shall be required
to complete the assignment of rights form to assist the
department or health plan in subrogation action.
(c) 	Refusal to sign the assignment of rights form
constitutes cause for termination of medical coverage
or denial of medical assistance application.
(d) 	Upon receipt of the assignment of rights
form, the department or health plan shall immediately
pursue possible recovery of medical care expenses paid
on behalf of the recipient through the appropriate
agencies. 	[Eff 08/01/94 	] 	(Auth: 	HRS §346-14)
(Imp: 	HRS §346-44)
§17-1705-68 	Termination or waiver of subrogation.
(a) 	Pursuit of recovery shall cease if:
(1) 	The recoverable amount is less than the
expense of pursuing the recovery;
(2) 	The case is more than five years old and
amount recoverable is less than $1,000 and
there are no outstanding federal or state
issues;

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1705-21
(3) 	The department or health plan does not have
any legal recourse to pursue recovery; or
(4) 	The whereabouts of the recipient are unknown.
(b) 	Pursuit of subrogation may be waived if the
recoverable amount is $100 or less.
[Eff 08/01/94 	] 	(Auth: 	HRS §346-14) 	(Imp: 	HRS
§346-44)