Beware of HMS

Medicaid estate recovery is now the law in Michigan, as previously discussed in “Medicaid Estate Recovery Mystification” in this blog. “.” The families of deceased Medicaid recipients should consult an attorney before opening a probate estate or responding to the demand for information from HMS, Michigan Medicaid’s estate recovery contractor.

When a government hires a for-profit company to handle tasks that would otherwise be handled by its own bureaucracy, protection of the rights of citizens and quality of performance are often ignored in the interest of profits for the government contractor. For example, this is seen with private operation of prisons and private security operators in public places such as courthouses and office buildings. Private companies hired by state Medicaid agencies to pursue estate recovery are typical of government contractors in this respect.

A client died about a year ago, survived by his wife, and with no probate estate. HMS sent their questionnaire and I responded with a letter informing HMS as follows:

I am informed that there are no probate assets and no probate estate will be opened. Under the estate recovery statute and the Estates and Protected Individuals Code, the personal representative is obligated to notify the Medicaid agency if an estate is opened. On opening an estate, the personal representative will provide the statutory notice to the Estate Recovery Program. You should be aware from the Medicaid file that the decedent is survived by his spouse. Therefore, the state is not entitled to pursue estate recovery.

HMS sent another letter demanding that I fill out their “voluntary” questionnaire and provide a copy of the death certificate, which I answered by telling to read my previous letter. Now they are calling and demanding the “voluntary” questionnaire and a copy of the death certificate.

I realize that the course of least resistance is to fill out the questionnaire and return it with the death certificate. However, they have no legal basis for their demand. I am concerned that HMS will harass the families of deceased Medicaid recipients and talk them into payments they are not legally required to make. If these pests are not ashamed to make ultra vires demands of attorneys, what will they tell family members?

Monday’s New York Times had a front-page article about hospitals, including nonprofits, that pursue uninsured patients in violation of their legal obligations not to do so. The hospitals receive millions from the state for indigent care, despite flagrant failure to allow uninsured patients to apply for compassionate exemptions. The hospitals and their attorneys routinely sue impoverished patients by the thousands. They take judgments on the chance that the patients might come into money or get jobs and the judgments will pay off. When there is money to be collected from vulnerable individuals and families, those in collection tend to take what they can get. That is disturbing when the collection agent is acting on behalf of a government or charitable entity required to play by its own rules.

HMS’s questionnaire is signed as an affidavit, so the person who fills it out is putting himself or herself on the line. If it is provided by an unwitting family member, there might be incorrect information, either including assets that are not liable for estate recovery or failing to identify assets that are liable. Both circumstances give rise to problems for individuals who are not obligated to sign any questionnaire. Michigan probate law directs the personal representative to notify the state when a probate estate is opened. It is the personal representative who has the duty to provide information, not miscellaneous family members.

HMS is a for-profit health-care management company that gets a percentage of whatever it pinches from the families of deceased Medicaid recipients. Its motivation is purely rapacious: The more it collects, the more it makes, just like any other collection agency. Lawyers should resist HMS’s illegal demands and direct clients not to “voluntarily” fill out and file the questionnaires unless they decide – after legal consultation – that it is in their best interest because they want to request the elusive and rare hardship exemption.

I filled out and filed two questionnaires indicating that the family was entitled to a hardship exemption. Instead of providing the form to substantiate the hardship, HMS turned the AG’s office loose to pursue the claim. I am litigating those at this time. It appears that HMS and the Michigan Attorney General will be no more respectful of individual rights than collectors working for payday lenders. Beware of Medicaid estate recovery and the private contractors engaged to bag the money.


John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
©2012 John B. Payne, Attorney

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  • This topic was discussed at a recent ICLE event and it raised the questions of whether the FDCPA and Michigan Fair Debt Collection Practices Act applies to HMS. It seems that HMS is behaving as many debt collectors do by ignoring the letter of the law and harassing and bullying to get as much money out of even insolvent estates as they can; they do work on commission after all.

    The consensus was that those statutes did apply and that there was some potential to use them as a sword to get HMS to leave grieving families alone. I’ve primarily practiced consumer law/bankruptcy and am now educating myself on estate & probate and this is not the first parallel I’ve seen.

  • Pingback: HMS – Just Ignore Them « Off the Top o' My Head

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