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This applies to situations where the State agrees to accept less than the amount that is available and to which it is legally entitled. If the estate is insolvent and the State will receive the entire balance of the estate after payment of claims that have higher priority, that is not a compromise and it does not require the approval of the governor and attorney general. The settlement must be in the State's best interest and can only be approved if it is cost effective for the State. Some examples of when a compromise may be cost effective are when: • Another claim arguably has priority such as expenses of last illness • There is a legitimate dispute as to the amount of the claim • The asset is a land contract or other asset that is not easily liquidated, and the State agrees to accept cash in a lesser amount.

Typically, the Estate Recovery Analyst or the FSSA attorney will be contacted by the estate of a deceased member regarding a potential settlement of the FSSA’s claim. The Estate Recovery Analyst and FSSA attorney will review the proposed settlement to see if it would be cost effective for the State. If the proposed settlement is found to be cost effective, the Estate Recovery Analyst will create a referral packet for the Office of Attorney General containing all relevant information and communications, including but not limited to: • The amount of the claim • Available assets in the estate • The proposed settlement • The reason for settlement • Why it is in the best interest of the State to accept the settlement.

4725.10.00 WAIVING ESTATE CLAIMS FOR UNDUE HARDSHIP The Medicaid program's claim against the estate of a deceased recipient must be waived if enforcement of the claim would result in undue hardship for a beneficiary.11 The term “undue hardship” is a term of art that is defined in 405 IAC 2-8-2. The decision to approve or deny an application for a waiver of the estate recovery claim will be made by the Medicaid Estate Recovery Unit based on information provided by the beneficiary and the FSSA attorney in accordance with the following procedures. At the time a claim is filed, a notice is to be included with the claim, explaining the undue hardship provisions and the process for applying for a waiver of the State's claim. An application (State Form 48259/OMPP 003) is to be provided upon request to a beneficiary who wishes to apply for a waiver. The hardship applicant will complete the form and return it, along with supporting documentation, to the FSSA attorney or to the Medicaid Estate Recovery Unit. The applicant must indicate one of the following situations as the basis for their claim: • Causing a beneficiary of the decedent's estate to become eligible for public assistance. As used in this section, "public assistance" means: