Minnesota Department of Human
Services
Minnesota Medicaid
Estate Recovery Basics
Dale B. Klitzke
SRU Manager
Purpose

Provide a quick background of the
Medicaid estate recovery program
and the Minnesota estate
recovery process.
Medicaid Program



Medicaid is a joint federal/state program
that pays for medical care for individuals
who need assistance in paying their own
medical bills.
To qualify for Medicaid, an individual must
have limited income and assets
(depending on the program).
Each state operates its own Medicaid
program, consistent with federal law.
What is Estate Recovery

Estate recovery is the process initiated by
the state or local government for
recovering payments made under the
Medicaid program on behalf of recipients.
– The state or local government will seek to
recover the sum of payments from the estate
of the recipient (or the estate of their surviving
spouse) after the recipient passes away.
Background to Medical
Assistance and Recovery

Federal Medicaid Program
– 1965, Inception of the program
– States allowed to recover
– 1982, Tax Equity and Fiscal Responsibility Act
(TEFRA)
– Liens allowed prior to death
– 1993, Omnibus Budget Reduction Act (OBRA)
– States required to carry out Medicaid recovery
program
– 2005, Deficit Reduction Act (DRA)
– Requirement that the state be named a
beneficiary on annuities
Definition of Estate


States may use the narrow Federal definition of
“estate” and limit Medicaid estate recoveries to
only those assets that pass through probate.
Alternatively, states may choose to define
“estate” to include all property that bypasses
probate.
– assets that pass directly to a survivor, heir or
assignee through joint tenancy, rights of
survivorship, life estates, living trusts, or annuity
remainder payments.
What Does the Federal Law
Require


Federal Law requires states to recover, at a
minimum, all property and assets that pass
from a deceased person to his or her heirs
under state probate law.
At a minimum, states must recover amounts
spent by Medicaid for long-term care and
related drug and hospital benefits
– However, they have the option of recovering the
costs of all Medicaid services paid on the
recipient’s behalf.
Federal Law Restricts Recovery

States can only recovery in situations where:
– 55 years of age or older and received Medicaid
services
– Regardless of age, the recipient received Medicaid
services while institutionalized with no reasonable
expectation of discharge

No recovery when recipient passes and:
– Survived by a “Community” spouse, child under 21,
child who is blind, or a child who is permanently
disabled
Minnesota Requires

In Minnesota, for the purpose of estate
recovery, a person’s estate consists of:
– Assets in their probated estate or that of their
surviving spouse’s;
– interest in real property to include life estate, joint
tenancy;
– Interest in securities, joint accounts, multiparty
accounts, and pay on death accounts
– Assets conveyed to a survivor, heir, assign of the
person through survivorship, living trust or other
What does the MA claim include

An MA claim includes all MA that was
received correctly while the recipient was:
»55 years of age or older;
»Of any age residing in a Medical
Institution for 6 months or longer and
could not reasonably be expected to
return home.

• to include capitation payments
Alternative Care on or after July 1, 2003
What Does the MA Claim Not
Include



MA received prior to age 55 that is not
LTC for 6 months or longer and the
recipient could not reasonably be
expected to return home.
Medicare Cost Sharing Benefits (SLMB,
QMB, QI) received on or after January 1,
2010
AC prior to July 1, 2003
How Does Minnesota Recover

Joint effort in Minnesota:
– Counties collect in the individual's or their
surviving spouse’s estate
• Probate, Affidavit of Collections
– State collects on liens, annuities and trusts
• State provides policy and conformity with federal
law
• Assist counties when the litigated matter has a
statewide impact.
MAGI Population and
Recoveries

Basics:
– MA liens under Minn. Stat. §514.980-514.985
are not allowed against individuals using LTC
services under MAGI eligibility
– No recovery is allowed against individuals that
receive LTC services under MAGI before age
55
– Recovery MA services paid under MAGI
eligibility if those services were received at
the age of 55 or older.
MAGI Population and
Recoveries

February 21, 2014, CMS provided guidance
regarding estate recovery for individuals who
are eligible for MA under MAGI (Modified
Adjusted Gross Income).
– Estate recovery will include individuals receiving
MA under MAGI determination between ages 55
to 65.
Minnesota Liens

Two types of liens are used in MN
1. TEFRA/pre-death liens: Known in MN as MA liens.
Allowed to encumber real property while the recipient
is alive and in a LTC facility. Certain restrictions
apply
2. Post-death lien: In MN known as Notice of Potential
Claims (NPCs). Created to recover against real
estate that would be outside of probate (life estate,
joint tenancy). Can be filed for post death recovery.
15
Incentive for Counties
Incentive for State

Federal Financial Participation (FFP)
– The federal government pays states for a
specified percentage of program
expenditures.
– When a recovery is made under the MA
estate recovery program the total amount of
the recovery is divided based on the FFP
between the state and the federal
government.
Incentive for Counties
Incentive for State
Major
Program
Eligibility
Type
Federal
State
County
MA
EX
50%
25%
25%
MA
AA
50%
25%
25%
MA
NA
50%
25%
25%
MA
AX
100%
0%
0%
50%
40%
10%
AC
2013 Recoveries

County Recoveries
– Total Claims = 7,870
– Total MA Estate Claim Recoveries = $28,231,234
• (2012= $22,486,534)
• Percent of return from elderly expenditures = 2.18%
– Total AC Estate Claim Recoveries = $24,652

State Recoveries
– Liens, Trusts and Annuities = $9,056,641

Total of all estate recoveries = $37,312,527
Contact SRU
Property Liens:
A-G
Jan Curran
651-431-3154
[email protected]
H-M
Denise Meyer
651-431-3158
[email protected]
N-R
Greg Lulic
651-431-3152
[email protected]
S-Z
Kelly Buckley
651-431-3115
[email protected]
Policy Questions:
Dale Klitzke [email protected] 651-431-3108
Kendel Waterkamp Vomastek
[email protected]
651-431-5805
Questions