Estate Recovery

In some cases, the law requires estates and trusts to pay back Medicaid costs. Medicaid recipients agree to this when applying.

Protections for Families

Estate recovery does not happen when the Medicaid recipient has:

  • A spouse, or
  • A child under the age of 21, or
  • A blind or disabled child of any age

Disability is determined by the Social Security Administration or the Utah State Medical Review Board.

Some adult children or siblings of the Medicaid recipient may also have certain protections. Members of American Indian or Alaskan Native groups may have other protections.

To understand whether these apply to your case, contact ORS.

The Process of Estate Recovery

Most estate recovery processes begin after a Medicaid recipient dies. But one type of estate recovery process, called a TEFRA lien, may start during their lifetime.

The basic process is the same in all cases:

  1. ORS contacts the Medicaid recipient or representatives of their estate
  2. ORS records a lien against the property of that recipient
  3. ORS may also file a claim with the probate court

The Medicaid recipient or their estate can respond at every stage of the process. This ensures that all parties know the facts of the case.

TEFRA Liens

TEFRA is an abbreviation for the Tax Equity and Fiscal Responsibility Act of 1982.

Part of that law explains how Medicaid works for people who permanently enter a facility, such as a nursing home.

ORS may place a TEFRA lien on the property of a Medicaid recipient who is expected to live permanently in a nursing home.

The Medicaid Costs That ORS Will Recover

The law requires ORS to recover Medicaid costs that were paid when the recipient was age 55 or older.

Healthcare costs paid by Medicaid may include charges for:

  • Doctors and hospitals
  • Prescription drugs
  • Medical equipment
  • Ambulance services
  • Nursing home services
  • In-home or community-based services
  • Other services

Payments to a Medicaid managed care plan will be included. These payments may count even for months when the Medicaid recipient did not benefit from that plan.

Estate recovery does not apply to the Medicare cost-sharing programs QMB, SLMB, or QI-1.

Burial Costs and Other Claims against an Estate

ORS’s estate recovery claims are often just one claim on an estate.

The estate of a Medicaid recipient can first pay certain approved costs. Reasonable burial costs are one example of this.

Claims from ORS and for the recipient’s last illness come next. These have the same level of priority.

Next come other creditors and any heirs.

Real Estate

ORS may include a home or other real estate as part of estate recovery.

This is true even for a home that was excluded from tests for Medicaid eligibility.