Estate Recovery

Medicaid beneficiaries are notified of the Medicaid estate recovery program during their initial application for Medicaid eligibility and annual redetermination process. Individuals in medical facilities (who do not return home) are sent a notice of action by their county Department of Social Services informing them of any intent to place a lien/claim on their real property. The notice also informs them of their appeal rights.

Estate recovery procedures are initiated after the beneficiary's death.

The Omnibus Budget Reconciliation Act (OBRA) of 1993 defines estate recovery and requires each State to seek adjustment or recovery of amounts correctly paid by the State for certain Medicaid beneficiaries. The State must, at a minimum, seek recovery for services provided to a person of any age in a nursing facility, intermediate care facility for the mentally retarded, or other medical institution.

The State may at its option recover amounts up to the total amount spent on the individual's behalf for medical assistance for other services under the State's plan. For individuals age 55 or older, States are required to seek recovery of payments from the individual's estate for nursing facility services, home and community-based services, and related hospital and prescription drug services. States have the option of recovering payments for all other Medicaid services provided to these individuals.

In addition, States whose plans were approved after May 14, 1993 that disregarded assets or resources of persons with long-term care insurance policies must recover all Medicaid costs for nursing facility and other long- term care services from the estate of persons who had such policies; however, California, Connecticut, Indiana, Iowa, and New York are not required to seek adjustment or recovery from a person's estate who had a long-term care insurance policy. These States had State plans approved as of May 14, 1993 and are exempt from seeking recovery from individuals with long-term care insurance policies. For all other individuals, these States are required to comply with the estate recovery provisions as specified above.

States are also required to establish procedures, under standards specified by the Secretary for waiving estate recovery when recovery would cause an undue hardship.

As of November 15, 1996

THESE MATERIALS WERE EDITED FROM THOSE PROVIDED BY HEALTH CARE FINANCING ADMINISTRATION (HCFA). BECAUSE THESE MATERIALS HAVE BEEN EDITED AND BECAUSE RULES AND REGULATIONS CHANGE REGULARLY, WE SUGGEST THAT YOU CONTACT YOUR LOCAL AUTHORITIES AND QUALIFIED LEGAL COUNSEL PRIOR TO ACTING.