ESTATE RECOVERY  

LEGAL REFERENCE: 441 IAC 76.12(7) 

Upon the death of certain Medicaid recipients, medical assistance paid on behalf of the recipient is subject to recovery from the estate of the recipient, the surviving spouse, or a surviving child. All assets included in the estate of a Medicaid recipient, surviving spouse, or surviving child are subject to probate for the purposes of Medicaid estate recovery. 

Recipients affected by the estate recovery policy are: 

• Those who are 55 years of age or older. (Recipients aged 55 or over are subject to estate recovery whether or not they are living in an institution.)
• Those under age 55, who are residents of a nursing facility, intermediate care facility for the mentally retarded, or a mental health institute and who cannot reasonably be expected to be discharged and return home.

An "estate" includes all real property, personal property, or any other asset in which the recipient, spouse, or surviving child had any legal title to or interest in at the time of the death of the recipient, spouse, or child, to the extent of such interest. This includes, but is not limited to, interest in jointly held property and interest in trusts. 

Issue a copy of Comm.123, Estate Recovery Program, to all Medicaid applicants, including QMB and SLMB applicants, at the time of application and at each review. 

Establishing Whether a Client Under Age 55 Can Return Home  

Legal reference: 441 IAC 76.12(7) 

Presume that a recipient in a medical institution under age 55 is unable to return home. Inform clients of this policy by issuing form 470-2980, Estate Recovery Notice for New Approvals, to all recipients who are under 55 years old and a resident of a medical institution at the time of Medicaid approval. 

If a client under 55 years old is discharged before six months has elapsed, no further action is necessary. Estate recovery will not be pursued because the client was not permanently institutionalized. 

A client in a medical institution who is under age 55 and has the right to rebut this presumption. To do so, the client must make a written request to the Department after being in the institution for six months. 

Inform recipients who are under 55 years old six months after their admission into the medical institution of this right by issuing them form 470-3209, Estate Recovery Six-Month Follow-Up. Also, issue form 470-3209 to the family or someone acting on the recipients behalf if the client under 55 years old dies in the medical institution after a stay of less than six months. 

If a client dies before six consecutive months of institutionalization, the family or another interested party may submit a written request to the Department to rebut the presumption that the client could not have been reasonably expected to be discharged. 

Send all rebuttal requests to the Iowa Foundation for Medical Care (IFMC), 6000 Westown Parkway, Suite 350, West Des Moines, IA 50266-7771. IFMC determines whether the client can reasonably be expected to return home and sends a copy of its decision to you and to the client. 

If IFMC determines that the client cannot reasonably expect to return home, IFMC will provide information to you about whether the client was ever able to return home within the first six months of institutionalization and the date the expectation and ability to return home ceased. File a copy of the IFMC determination in the case record. 

A client may appeal an adverse decision. The client first appeals to IFMC for reconsideration. If the client disagrees with the reconsideration decision, the client or someone acting responsibly for the client can appeal an adverse reconsideration decision by IFMC through normal DHS appeal procedures. 

Requests for IFMC determination are timely when filed within 30 calendar days from the date form 470-3209, Estate Recovery Six-Month Follow-Up, is issued. The client may still make a request at a later date. However, if the decision then is that the client is reasonably able to return home, assistance received before the date the request was submitted to DHS is still subject to estate recovery. 

Amount Due  

Legal reference: 441 IAC 76.12(7)"d" and "f" 

The debt due the Department from the recipient's estate is equal to all medical assistance provided on the recipient's behalf on or after: 

• The date the person attained age 55, or
• The date the person under age 55 entered a medical institution with no reasonable expectation of returning home.

However, no debt is due for assistance provided before July 1, 1994 (the beginning of the estate recovery program) Interest accrues on a debt due, beginning six months after the death of a Medical recipient, surviving spouse, or surviving child, or upon the minor child reaching age 21. 

If a client under the age of 55 is discharged from the facility and returns home before six consecutive months, no debt is assessed for Medicaid payments made on the client's behalf for the time of the institutionalization. 

Estate recovery is completed by Health Management Systems/SUMO (HMS/SUMO). HMS/SUMO compares monthly Medicaid eligibility tapes against Vital Statistics tapes on reported deaths in Iowa to determine when estate recovery can be initiated for an individual. (Estate Recovery Manager's Note: Although this sounds like a good idea, the information provided to HMS/SUMO is incomplete. Our best information comes in the form of notices from income maintenance workers, attorneys, personal representatives, funeral directors, etc.) 

HMS/SUMO may request a copy of the recipient's first and last application or review form to determine resources that could be subject to estate recovery. When sending a copy of the requested forms, record the recipient's name, state identification number, social security number and case number on each sheet sent to HMS/SUMO. 

The claim against the estate of the person who is eligible for Medicaid because the person's resources are disregarded under the Long-Term Care Asset Preservation program is computed differently. The amount of the assets disregarded under this program are not subject to estate recovery. Exception: Medicaid paid before the recipient attained eligibility due to long-term care asset preservation is still recovered from the estate. 

The Department does not use liens in the estate recovery program. 

When Estate Recovery Is Waived 

Legal reference: 441 IAC 76.12(7) "b" and "c" 

Collection of the debt from the estate of a Medicaid recipient is waived when collection of the debt would result in: 

• Reduction in the amount received from the recipient's estate by a surviving spouse, or by a surviving child who is under age 21, blind, or permanently and totally disabled at the time of the recipient's death, or
• Other undue hardship (determined on a case-by-case basis).

Undue hardship exists when all of the following are true: 

• The household that claims hardship has gross monthly income of less than 200% of the poverty level for a household of the same size,
• Total resources do not exceed $10,000, and
• Application of estate recovery would deprive a person of food, clothing, shelter or medical care such are that the person's life or health would be endangered.

Send requests for undue hardship along with any additional information provided by the person making the claim to the Division of Medical Services, Bureau of Contract Services. (Estate Recovery Manager's Note: Requests for undue hardship determination should be sent to Estate Recovery Program, 200 10th Street, 5th Floor, Clemens Building, Des Moines, Iowa, 50309-3609.) 

If collection of all or part of a debt is waived for a surviving spouse or child, the amount waived creates a debt due from: 

• The estate of the recipient's surviving spouse or blind or disabled child, upon the death of the spouse or child, or
• A surviving child who was under 21 years of age at the time of the recipient's death, upon the child reaching age 21.

The debt owed by the surviving spouse or child will not exceed the amount in which recovery was waived.