November 2020 Newsletter
Tuesday, November 17th, 2020
From The Certified Elder Law
William W. “Bill” Erhart
Can Medicaid Recover
Paid Benefits By Filing a Claim
Against My Estate?
Medicaid Estate Recovery
Since 1993, every state must establish a program to recover Medicaid expenditures from the estates of recipients. 42 U.S.C. § 1396p(b)(1)(B). This is known as “estate recovery.” In theory states can impose liens to personal or real property 42 U.S.C. § 1396p(a) or seek to recover from the Medicaid recipient's decedent's estate. 42 U.S.C. § 1396p(b)(1)(A). States may adopt an expanded definition of estate which is broader than the probate estate.
It may seem odd, given that a Medicaid recipient must be impoverished in order to receive Medicaid, but frequently a residence, one of the few assets a recipient is permitted to retain, is titled in the name of a deceased recipient. A state must seek to recovery against the residence in order to qualify its Medicaid program. West Virginia v. U.S. Dep't of Health & Human Servs., 281 F.3d (4th Cir. 2002).
Each state is required to seek reimbursement from the probate decedent's estate of any Medicaid beneficiary, of any age, receiving “long-term care.” 42 U.S.C. § 1396p(2), referencing 42 U.S.C. § 1396p(b)(1). There are restrictions and exceptions. The state must wait until after the death of the community spouse. 42 U.S.C. § 1396p(b)(2). There is no recovery against the estate of a recipient who is survived by a child who is blind or disabled or a child under age 21. 42 U.S.C. § 1396p(b)(2)(A).
Under federal law, states may impose an expanded recovery to include joint tenancy interests, life estates and other interests that lapse at death, but there is no mechanism set forth to do so. 42 U.S.C. § 1396p (b)(4)(B). Most states have deferred from expanding the definition of estate beyond that of a probate estate. Many states have legislation to expand estate recovery.
Are there any exceptions?
The State cannot file lien unless:
There is a Court judgment for incorrect payment;
The Recipient is in Skilled Nursing Facility (SNF) and cannot reasonably be expected to be discharged (there are exceptions);
No lien if there is a spouse, child under 21, a blind or disabled child lives in the home.
No lien may be executed upon, if following are living in the home:
Blind or disabled child
Child under 21
Sibling with equity interest who lived in the home at least one year before individual went into SNF
If individual leaves the SNF and returns home, the lien must be discharged
How are claims assessed against an Estate?
The state may asset a claim against an estate in the same manner as any other creditor pursuant to 12 Del. C. § 2104. Section 2104 (1) permits a claim to be filed against an estate by “[t]he claimant may deliver or mail to the personal representative a written statement of claim indicating the basis ….” The state routinely mails an estate recovery letter to the Medicaid recipient’s representative, if there is one, within a few months of the recipient’s death. Often the recipient’s representative is not the personal representative of the estate. In that instance the claim is not properly asserted. In recent years the State has filed claims with the Register of Wills to avoid sending the notice to the incorrect party.
What are the Delaware regulations?
Pursuant to the Delaware Statute 25 Del. C.
§ 5001 Definitions
c) "Estate" means all real property, as well as all personal property which constitutes assets of the individual's estate as described in Chapter 19 of Title 12.
(e) "Long-term care" means a service provided in a long-term care facility or in the home, under federally approved home and community-based services, as an alternative to institutionalization.
§ 5002 Liens; notice.
(a) Subject to the provisions of subsections (b) and (c) of this section, for any individual who is 55 years of age or older when the individual receives services in a long-term care facility under the auspices of the Department, a lien shall be created against all real property of such individual, prior to the individual's death, upon approval of such individual for, and receipt of, services that will be paid on that individual's behalf, fully or in part by the Department, and only after notice and opportunity for a hearing before the Department to establish that the person cannot reasonably be expected to return home.
(b) No lien may be imposed on an individual's home under subsection (a) of this section if any of the following persons is lawfully residing in the home:
(1) The spouse of the individual;
(2) The individual's child who is either under the age of 21, blind or permanently and totally disabled; or
(3) A sibling of the individual who has an equity interest in the home and who was residing in the home for a period of at least 1 year immediately prior to the date of the individual's admission to the long-term care facility.
(c) The lien shall attach to real property upon the recording of a notice of lien being recorded by the Department at the Recorder of Deeds office in the county where such real property is located.
(d) The lien may be released by the Department recording a release of lien form at the Recorder of Deeds office in the county where the real property is located.
(e) Any lien imposed pursuant to this section shall dissolve and be null and void upon the individual's discharge from the long-term care facility and return home. Any such lien shall be released by the Department upon such discharge.
§ 5003 Estate recovery.
In the case of any individual receiving long-term care from the Department, the Department shall seek recovery for any disbursements made on behalf of such individual under the State Plan for Medical Assistance, from the individual's estate or upon sale of property subject to a lien. The Department will seek recovery of moneys expended for correctly paid medical assistance from all periods of eligibility for medical assistance on behalf of the individual only:
(1) After the death of the individual and the death of a surviving spouse who was residing in the home on a continuous basis; and
(2) In the case of liens on an individual's home, when there is no:
a. Surviving child who is blind or disabled as defined in accordance with the disability rule of the federally administered Supplemental Security Income (Title XVI of the Social Security Act [42 U.S.C. §§ 1381-1383f]) who was residing in the home on a continuous basis immediately prior to the death of the individual; or
b. Nondisabled child or sibling of the individual lawfully residing in the home, who has resided there for a period of at least 2 years immediately prior the date of the individual's admission to a long-term care service, who has lawfully resided there on a continuous basis since that time, and who can establish to the Department's satisfaction that the person provided the care that permitted the individual to reside in the home rather than in a long-term care facility; or
c. Minor child who was residing in the home on a continuous basis immediately prior to the death of the individual, until that child reaches majority.
§ 5004 Voluntary reimbursement.
The Department shall accept reimbursement for medical assistance it has rendered when voluntarily offered by a current or former recipient of long-term care or someone acting on the recipient's behalf to offset any recovery under § 5003 of this title.
§ 5005 Undue hardship.
The Department shall, by October 13, 1994, establish procedures under which the Department shall waive the application of § 5003 of this title if it would work an undue hardship. However, a waiver granted pursuant to this section shall remain in effect only as long as the undue hardship condition continues.