27-92-104. Determination of ability to pay.
Statute text
(1) All insurance and other benefits payable for the care, support, maintenance, and treatment of a patient shall be considered available for payment of the cost determined under section 27-92-102.
(2) The department of human services shall determine the ability of a patient and his or her spouse to pay the balance of the cost by consideration of the following factors: Income reportable under Colorado law; the age of the patient and spouse; the number of dependents, their ages, and their mental and physical condition; provision for retirement years; the length of the patient's care or treatment; liabilities; and assets. The determination shall be made according to schedules contained in published rules, adopted in accordance with the provisions of article 4 of title 24, C.R.S.
(3) If it is determined that the patient and his or her spouse are unable to pay the entire cost determined under section 27-92-102 and the length of the patient's care and treatment at a state institution is reasonably anticipated to be less than six months, the department of human services shall determine the parent's ability to pay by consideration of the same factors referred to in subsection (2) of this section, applying each such factor to the parent.
(4) If it is determined that the patient and his or her spouse are unable to pay the entire cost determined under section 27-92-102 and the length of the patient's care and treatment at a state institution is reasonably anticipated to exceed six months, the department of human services shall determine the parent's ability to pay by reference to the parent's net taxable income reportable under Colorado law and to the patient's length of care or treatment. At the request of the parent, the department shall also consider other factors relevant to the interest of avoiding undue hardship to the family unit. Other factors may include the parent's age, provision for retirement years, assets, liabilities, and the number of dependents, their mental and physical condition, and their educational requirements. The determination shall be made according to schedules contained in published rules adopted in accordance with the provisions of article 4 of title 24, C.R.S.
(5) Should any parent not file a Colorado income tax return, the parent's net Colorado taxable income equivalent shall be determined by reference to his or her United States income tax return as though all the income disclosed by that return had been derived from sources within Colorado, and the table of rates shall be applied to the net taxable income equivalent.
(6) Upon the willful failure of any patient, spouse, or parent to furnish to the department of human services, upon request, copies of his or her income tax returns, he or she shall be deemed to have the ability to pay the entire cost determined under this article.
(7) Every agency and department of the state is required to render all reasonable assistance to the executive director of the department of human services in obtaining all information necessary for proper implementation of the purposes of this article. Nothing in this subsection (7) shall be construed to require the department of revenue to produce a copy of any person's income tax return solely upon the request of the department of human services, but the department of revenue shall deliver a copy of any such return upon the request of the taxpayer or his or her duly authorized representative, pursuant to section 39-21-113 (4), C.R.S.
History
Source: L. 2010: Entire article added with relocations, (SB 10-175), ch. 188, p. 772, 2, effective April 29.
Annotations
Editor's note: This section is similar to former 27-12-104 as it existed prior to 2010.
Annotations
ANNOTATION
Annotations
Analysis
I. General Consideration.
II. Insurance.
III. Determination.
IV. Amount of Liability.
I. GENERAL CONSIDERATION.
Law reviews. For article, "Protecting the Mentally Incompetent Child's Trust Interest from State Reimbursement Claims", see 58 Den. L.J. 557 (1981).
Annotator's note. Since 27-92-104 is similar to 27-12-104 as it existed prior to the 2010 amendments to this article, relevant cases construing that provision have been included in the annotations to this section.
Ambiguous term construed in favor of insured. Even if an insurance company intended charges to mean other than actual cost, its intent is ambiguously stated, and therefore the term must be construed in favor of the insured. State v. Schleiger, 37 Colo. App. 195, 547 P.2d 1295 (1975), aff'd, 193 Colo. 531, 568 P.2d 441 (1977).
Benefits received by individuals at state mental health hospital from veterans administration and the Colorado old age pension program fall under the term "other benefits payable" in subsection (1). As such, they may be applied to cover costs of care at the hospital. In re Estate of Nau, 183 P.3d 626 (Colo. App. 2007).
II. INSURANCE.
Insurance coverage to be used to reimburse costs. The plain and obvious purpose of subsection (1) is to provide that where insurance coverage exists it shall be used to reimburse the state for the actual cost of the care, support, maintenance, and treatment of the patient. State v. Schleiger, 37 Colo. App. 195, 547 P.2d 1295 (1975), aff'd, 193 Colo. 531, 568 P.2d 441 (1977).
Subsection (1) makes the consideration of insurance mandatory by the use of the word "shall". State v. Schleiger, 37 Colo. App. 195, 547 P.2d 1295 (1975), aff'd, 193 Colo. 531, 568 P.2d 441 (1977).
Insurance is to be considered available for payment of the entire cost before any allowance or remission based on the patient's ability to pay is permitted. State v. Schleiger, 37 Colo. App. 195, 547 P.2d 1295 (1975), aff'd, 193 Colo. 531, 568 P.2d 441 (1977).
Subsection (1) refers only to the role which insurance proceeds should play in the department of institutions' decision relative to its determination of the ability of the patient or relative to pay. State ex rel. Fort Logan Mental Health Center v. Harwood, 34 Colo. App. 213, 524 P.2d 614 (1974).
III. DETERMINATION.
Liability attaches when determination made. The liability which attaches for accrued costs of maintenance and care in a public institution under former 27-12-101 becomes a debt upon determination by the department of institutions that the relative is able to pay. If no determination of ability to pay has been made, the amount expended by the state in caring for the incompetent does not accrue and cannot be claimed as a debt against the estate of the deceased relative. People ex rel. Schauer v. Bozaich, 29 Colo. App. 468, 487 P.2d 597 (1971).
Collection of insurance proceeds is not condition precedent to determination of ability to pay. State ex rel. Fort Logan Mental Health Center v. Harwood, 34 Colo. App. 213, 524 P.2d 614 (1974).
Determination and assessment conditions precedent to collection. Under this statutory scheme, the determination of ability to pay made pursuant to this section and the assessment made thereon pursuant to former 27-12-103 are conditions precedent to collection. State v. Schleiger, 37 Colo. App. 195, 547 P.2d 1295 (1975), aff'd, 193 Colo. 531, 568 P.2d 441 (1977).
Failure to comply with and to exhaust statutory remedies under this article precludes later argument on the issues in a collection action. In re estate of Carlson, 749 P.2d 993 (Colo. App. 1987).
Failure to make determination bars collection. In the absence of a determination of ability to pay or an actual assessment, this section does not permit the collection of hospital expenses up to the amount of the insurance benefits payable for such expenses nor may the state maintain an action to recover for the costs of hospital care. State ex rel. Fort Logan Mental Health Center v. Harwood, 34 Colo. App. 213, 524 P.2d 614 (1974).
When the state does not determine the patient's ability to pay the balance, the doctrine of res judicata will bar collection of any balance. State v. Schleiger, 37 Colo. App. 195, 547 P.2d 1295 (1975), aff'd, 193 Colo. 531, 568 P.2d 441 (1977).
But does not obviate liability. The fact that liability cannot be asserted until a determination of ability to pay has been made in no way obviates the liability itself. State v. Schleiger, 37 Colo. App. 195, 547 P.2d 1295 (1975), aff'd, 193 Colo. 531, 568 P.2d 441 (1977).
Trustee bank is not liable for payments to hospital for care given by hospital to beneficiary where bank did not willfully fail to supply tax returns to hospital for its determination of beneficiary's ability to pay. State v. First Interstate Bank of Denver, 743 P.2d 449 (Colo. App. 1987).
IV. AMOUNT OF LIABILITY.
Liability for actual cost of care. The initial liability is for the actual cost of the care provided, and is incurred as the day-to-day expenditures are made. Schleiger v. State, 193 Colo. 531, 568 P.2d 441 (1977).
Regardless of insurance. The actual cost of the care are the same whether the patient has insurance or not. State v. Schleiger, 37 Colo. App. 195, 547 P.2d 1295 (1975), aff'd, 193 Colo. 531, 568 P.2d 441 (1977).
"Charges" are "made" and "incurred" within the meaning of an insurance policy as each day passes while the patient is hospitalized, not when the bill is sent or the assessment made. State v. Schleiger, 37 Colo. App. 195, 547 P.2d 1295 (1975), aff'd, 193 Colo. 531, 568 P.2d 441 (1977).
When remission from full cost allowed. Only if insurance is not available to pay the full cost and only if the patient personally is unable to pay the full cost does he get a remission or allowance from the full cost. State v. Schleiger, 37 Colo. App. 195, 547 P.2d 1295 (1975), aff'd, 193 Colo. 531, 568 P.2d 441 (1977).
State may collect only what patient is able to pay. The initial liability is for the actual cost of the care provided, but the state may collect, when there is no insurance, only that amount which the patient is able to pay. State v. Schleiger, 37 Colo. App. 195, 547 P.2d 1295 (1975), aff'd, 193 Colo. 531, 568 P.2d 441 (1977).
Or spouse or parents. In those instances where there is no insurance, the state may collect only that portion of the person's liability for the actual cost as the patient, spouse, or parents are able to pay. State v. Schleiger, 37 Colo. App. 195, 547 P.2d 1295 (1975), aff'd, 193 Colo. 531, 568 P.2d 441 (1977).
The parent is liable for the actual cost of care upon admission. State v. Schleiger, 37 Colo. App. 195, 547 P.2d 1295 (1975), aff'd, 193 Colo. 531, 568 P.2d 441 (1977).