D Deferment and Reductions of Claims

Revised 07/12/2022

Policy

There are certain situations when AHCCCS may defer estate recovery or reduce its claim and recover a lower amount. The estate recovery process also allows an opportunity for the estate’s representative to file grievance and request for a hearing on estate recovery decisions.

These policies are covered in the following three sections:

• Undue Hardship Deferment

• Partial Recovery or Reduction

• Grievance Procedure

 

1) Undue Hardship Deferment

AHCCCS may defer its claim when an heir or devisee to the estate meets all of the AHCCCS’ Undue Hardship described in the following table:

If	And	Then
The estate contains real property, and the heir owns a business located on the property	The business has been in operation at the property for at least 12 months before the customer’s death; The business provides more than 50% of the heir’s livelihood; and Recovery would result in the heir’s loss of livelihood	AHCCCS defers its recovery claim
The estate contains residential property, and the heir currently lives in the residence	The heir lived in the residence at the time of the ALTCS customer’s death; The property was the heir’s primary residence for the 12 months immediately before the customer’s death; and The heir does not own another residence	AHCCCS defers its recovery claim
The estate contains personal property only	The heir’s annual gross income, counting the members of the heir’s immediate family as appropriate, is less than the Federal Poverty Level (FPL); and The heir does not own a home, land, or other real property	AHCCCS defers its recovery claim
The estate contains both real and personal property	The heir qualifies for an undue hardship	AHCCCS does not grant an undue hardship deferment, but adjusts its claim to the value of the personal property

 

2) Partial Recovery or Reduction

When there is no Estate Claim Exemption and undue hardship policy is not met, AHCCCS considers a partial recovery or a reduction of its claim against the estate claim.

When HMS notifies an estate of a claim, it also provides information indicating what factors are considered when deciding whether a partial recovery can be approved. These include:

• A financial or medical hardship;

• Whether the heir’s household income is less than Federal Poverty Level (FPL);

• The value and type of resources held by the estate (real and personal);

• The amount of the claim;

• The claims of other creditor’s and whether any property in the estate has been foreclosed on; and

• Any other factors that may relate to a fair determination.

 

When an heir wishes to apply for an Undue Hardship deferment of estate claim or reduction of an AHCCCS estate claim, the heir must submit a written statement and provide all supporting documents to HMS no later than 30 days from the date on the “Notification of the AHCCCS Claim Against the Estate.” AHCCCS makes a decision within 60 days of receiving the completed application for a deferment or reduction.

 

3) Grievance Procedure

Information about how to file an estate recovery grievance and request a fair hearing is included in notices sent to the estate’s personal representative. A grievance must be received by the Office of the General Counsel (OGC) no later than 60 days from the date shown on the “Notification of the AHCCCS Claim Against the Estate” or the “Decision Notice Regarding the AHCCCS Estate Claim.” Grievances must be submitted in writing to:

AHCCCS Administration

Office of the General Counsel

Mail Drop 6200

P.O. Box 6050

Phoenix, Arizona 85002

 

Definitions

Term	Definition
Devisee	A person who inherits or receives a gift of real property by a will.
Heir	A person who is legally entitled to inherit some or all of the estate of another person who has died.
Personal property	Any resource other than real estate or real property.
Real property	Any property that is attached directly to land, as well as the land itself.
Residential real property	Any property used as a residence that is attached directly to land, as well as the land itself.

 

Legal Authorities

 

Program	Legal Authorities
ALTCS	42 US 1396(p) AAC R9-28-911 through R9-28-913