Senate Bill 5079, an agency-request bill carried by Senator Ron Mazzall, would give the Department of Social and Health Services authority to waive collection efforts for unintentional overpayments to recipients of aged, blind and disabled (ABD) cash assistance, Medicaid long-term services and supports, and Developmental Disabilities Administration waiver programs, beginning July 1, 2025. The bill would preserve the department’s obligation to return any federal share of overpayments to the Centers for Medicare & Medicaid Services (CMS) and requires DSHS to adopt rules identifying when waivers will apply.

Committee staff said the bill responds to high administrative costs associated with recovering small amounts and the hardship created when modest benefits are reduced to recoup overpayments. The fiscal estimate presented to the committee shows a state cost of about $308,000 for the current biennium and the two subsequent biennia; staff said an estimated 21.1% of overpayments (about $15,900 per month) would not be recovered under the waiver policy. Staff said in fiscal year 2024 there were 954 ABD cash-assistance overpayments; 92% were marked as unintentional and the program’s recovery rate for ABD overpayments was about 25%.

Bryce Montgomery, director of DSHS’s Community Services Division, told the committee waiving small unintentional recoveries would reduce hardship for recipients who live “in deep poverty” and would free staff time for other work. “Reducing the client's modest benefit to recover an unintentional overpayment due to a mistake on the part of either the client or the department causes distress for recipients of our services and can push them further into poverty,” Montgomery said. Senator Mazzall said the measure addresses a point of diminishing returns: the cost of seeking repayment often exceeds the amounts recovered, which staff said total roughly $150,000 annually in recoverable overpayments in the cited estimate.

Supporters framed the bill as aligning state practice with federal Social Security Administration waivers for people not at fault; committee staff said DSHS will return any federal portion of an overpayment to CMS even when the state waives collection of the client’s portion. The bill includes an emergency clause tied to the July 1, 2025 effective date.

The committee held public testimony and discussion but did not take a final vote during the hearing. DSHS staff offered to provide additional detail about rule criteria and safeguards during follow-up conversations with committee staff.