The Newest Arrow in the Health Care Collection Quiver?: New Hampshire Legislature Introduces Bill to Allow Special Conservatorships for Medicaid

Over the past several years, New Hampshire health care facilities have lobbied the New Hampshire Legislature to pass measures to help solve the chronic problem of patients or residents who linger in facilities with no means of paying their bill. These people often have sufficient assets or an appointed financial agent upon admission, but when the funds dry up and the financial agent becomes unresponsive, New Hampshire facilities are often saddled with tens or hundreds of thousands of dollars in unpaid charges or board and care fees. In 2014, the Legislature enacted RSA 151-E:19, which allows long-term care facilities to sue fiduciaries for failing to apply for Medicaid benefits, for making disqualifying transfers that result in a Medicaid penalty period, or for failing to pay patient liability. This statute has become an important collection tool for many long-term care facilities.

The Legislature’s latest statutory measure to provide relief to hospitals, residential care facilities and nursing homes licensed under RSA 151 (collectively, “care facility”) is Senate Bill 127. Here is the problem that SB 127 aims to fix. Currently, if a patient or resident of a care facility is eligible for Medicaid, but they or their designated fiduciary or family member fail to apply or fully pursue an application, the facility has no legal authority to gather the requisite documentation from financial institutions and pursue the application for the patient or resident. Consequently, care facilities are frequently forced to expend significant funds hiring an attorney to seek a guardianship over the person’s estate solely for purposes of filing a Medicaid application. This procedure can take months and facilities are often forced to pay filing, guardianship, and attorneys’ fees in the interim all while shouldering rising patient debt. Additionally, this costly procedure often pits the facility against interested family members.

SB 127 seeks to solve this problem by establishing a streamlined process whereby a care facility can petition the Circuit Court-Probate Division under the NH guardianship statute (RSA 464-A) to appoint them or another as a “special conservator” solely for purposes of gathering the necessary documentation and submitting a Medicaid application to the NH Department of Health and Human Services (“DHHS”) on behalf of its patient or resident.

Here is how the statute works in a nutshell:

The Written Demand

  • If a care facility has a good faith belief that a person is unable to pay for care through private pay, Medicare, private health or long-term care insurance, or the Affordable care Act, the care facility may send out a written request to the person and any known agents including guardians, designees under powers of attorney, and designated “responsible family members” demanding that they promptly apply for Medicaid. ·
  • Upon receipt, the person or their agent must file a Medicaid application within 10 business days with contemporaneous notice of the filing to the care facility. ·
  • If the person or agent files the Medicaid application, they then have a duty to cooperate with the care facility and DHHS to ensure that all necessary financial documentation and authorizations are provided in order to complete the application and permit DHHS to make an eligibility determination. ·
  • DHHS cannot deny the application for failure to supply required documentation if the person or agent is making a good-faith effort to obtain financial or asset information.

The Appointment Process

  • If the care facility does not receive confirmation of the filing of the Medicaid application within 10 days of the written request, it may then seek appointment of a special conservator. ·
  • Essentially, the care facility is required to file a modified guardianship petition with the Circuit Court-Probate Division that demonstrates the need for appointment, compliance with the statutory demand requirement, etc. ·
  • Similar to existing guardianship procedures, upon receipt the Circuit Court will issue orders of notice and schedule a hearing within 20 days. ·
  • At the hearing, the care facility must demonstrate by a preponderance of the evidence that the Medicaid application is necessary, that the facility has followed the statutory demand requirements, and that either no application has been filed with the DHHS or that an existing application has not been diligently prosecuted. ·
  • If the care facility satisfies its burden, the Court will appoint a special conservator who then can collect information and apply for Medicaid on the patient or resident’s behalf. ·
  • The special conservatorship shall terminate upon order of the Court or final approval or denial of the Medicaid application by DHHS.

SB 127 is a good start. The bill will likely ease the financial burden on care facilities, prevent backlog in the Circuit Court system, and allow guardianship agencies to take those cases that truly warrant a long-term appointment. The bill will also ensure continuity of care for patients lingering in the hospital with no ability to pay for a more appropriate level of care. Nevertheless, critics of the existing bill have raised some concerns. For example, critics contend that 10 days is a tight turn around for someone to receive notice and file a completed Medicaid application with DHHS. In addition, critics state that the bill provides no guidance on the contents or means of transmission (e.g., regular mail, certified mail, electronic mail?) of the required written notice to be sent by care facilities. Moreover, critics note that the bill’s application to “responsible family members” is troubling considering that phrase is not defined. These issues among others should get worked out in committee. SB 127 is currently working its way through the committee process. If passed, the bill will take effect on January 1, 2016.


Jason D. Gregoire is an attorney at Sheehan Phinney Bass + Green PA where he is a member of the Healthcare and Business Litigation Groups.

This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice.

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