We have entered a new phase of Medicaid estate recovery in Michigan – “you know, the State-Gets-Grannie’s-House Program.” On the death of someone over 55 who is receiving state assistance with the costs of long-term care, the Medicaid program will go after his or her estate, usually a house of modest value. To make sure that the state gets its beak into what Grannie left behind, a state agency or private contractor must be given the job of tracking deceased Medicaid recipients and fleecing their families.
The state initially contracted with HMS Holdings Corp. (NASDAQ: HMSY) to pursue the estates of Medicaid recipients, but has terminated that contract. Starting in mid-February 2013, the estate recovery program was transferred in-house to the Michigan Department of Community Health (MDCH) Mass Torts and Probate Unit, part of the Third Party Liablility Division of the Medical Services Administration. The Michigan Attorney General, Bill Schuette (rhymes with sweaty), intends to be more aggressive than HMS was in pursuing reimbursement of Medicaid payments from deceased poverty cases. It will be interesting to see whether he will have the resources to open thousands of probate cases annually to pursue small estates.
One of my Medicaid clients died in April. On May 24, MDCH sent a “Notice of Intent to File Claim Against Estate” with a “voluntary” “Michigan Estate Recovery Questionnaire.” This was not returned. On July 1, MDCH sent another questionnaire with a letter that threatens, “If we do not hear from you or your attorney within 30 days, we will proceed by either filing a claim against the estate, or, if necessary, opening the estate in probate.”
I am reluctant to open a dialogue with MDCH, since I have the feeling that they will be really intrusive and really persistent. HMS was not only intrusive and persistent, but secretive. My advice was to ignore them. Furthermore, until there is a personal representative, no one has any obligation to send in the completed ER questionnaire. It is even questionable whether anyone has authority to act on behalf of the estate until a personal representative has been appointed.
Whoever fills out the form “certifies” that all of the information provided is true and complete. That is not the same as signing a legal affidavit under oath, but if the questionnaire is not properly filled out or has incorrect information, there will be trouble ahead for the person who signed and submitted it. In the past, I have informed HMS that there is no probate estate and no personal representative and, therefore, no one to respond to its request for information. That led to demands for documentation that HMS had no right to make.
There are many legal issues to be considered when a family receives a “Michigan Estate Recovery Questionnaire” from MDCH. The form says on its face that its completion is voluntary. However, MDCH appears to be demanding that “the family” complete the form and submit it with supporting documentation. This is absurd, since there is no particular person obligated to obey MDCH’s fiat.
Submitting the form without legal guidance is problematic, since there are many types of property that are not susceptible to estate recovery. Let’s assume that Grannie was listed with a grandchild as a joint owner with rights of survivorship on a stock portfolio. The stock was revealed to the Medicaid agency in the application process. This stock would have been unavailable, if Grannie could not have liquidated the stock on her own and the grandchild refused to allow the stock to be sold. Medicaid estate recovery would have no right to any of the stock or its proceeds. If the ER office were informed of the stock, they might try to coerce the grandchild to give up some or all of the stock. In the absence of a probate estate (jointly-owned stock would not be a probate asset), it would be better to ignore the questionnaire and MDCH. If the state decides to open a probate estate, it will be drilling a dry well.
When there is a probate estate, it may be better to open probate immediately. That way a family member can be compensated for acting as personal representative and all of the costs will be paid ahead of the Medicaid claim. Alternatively, the family may decide to wait out the claim period. If the state does not open a probate estate for three years, its claim disappears.
Every case is different. Whether to cooperate with the estate-recovery office is a complicated issue. In light of the cost of making a wrong decision, consulting an experienced Medicaid and probate attorney could be far more cost-effective than plunging ahead without the benefit of legal advice.
John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com ©2013 John B. Payne, Attorney