Date: June 2, 2011
Program Area: Medicaid (MA)
Issue Summary: Michigan has recently released new policy guidelines, effective July 1,
2011, for the federally mandated estate recovery program, which requires reimbursement
for certain Medicaid services the individual received.
Persons Affected: Individuals receiving or expecting to receive Medicaid long term care
services.
For More Information: Michigan Poverty Law Program; 220 East Huron St., Suite
600A, Ann Arbor, MI 48104, (734) 998-6100, (734) 998-9125 Fax; or 3490 Belle Chase
Way, #50, Lansing, MI 48911, (517) 394-2985 x231, (517) 394-4276 Fax.
Background
Estate recovery is a federally mandated program requiring reimbursement from the
estates of deceased beneficiaries to the government for certain Medicaid long term care
services the individual received. Although the federal government required each state to
develop an estate recovery plan in 1993, Michigan is the last state to do so. In 2007, after
much prompting by the federal government, the Michigan legislature enacted the
Michigan Medicaid estate recovery program. However, the act could not be implemented
until the state plan submitted to the federal government was approved by the
administrator of the Medicaid program. CMS (the Center for Medicare and Medicaid
Services) did not approve the initial proposed amendments to the state plan and requested
additional information. The recently released Michigan Medicaid State Plan published
by MDCH and the amendments to the Bridges Administrative Manual published by DHS
include several new details explaining the program and outlining exceptions when
recovery will not be undertaken.
What’s Happening?
The new estate recovery policy goes into effect July 1, 2011. State Senator Kahn
introduced SB 404 on June 7th that would eliminate many of the enumerated exceptions
to estate recovery from the original legislation. This bill was referred to the Committee
on Appropriations. Even if SB 404 is passed substantially as written, MDCH would have
to amend their state plan and obtain approval of those changes from CMS before those
changes could be implemented. Thus, it will be important to understand the policy
currently in place but also to continue to monitor the legislation as it moves through the
Michigan Senate.
The policy will apply only to Medicaid beneficiaries who are age 55 years or
older and received Medicaid funded long term care and only to those assets in the probate
estate. If a beneficiary has a surviving spouse, the state will not pursue a recovery claim
until after the spouse has died. All claims will be subject to review by the Probate Court.
MI Medicaid State Plan at 582. Unlike other states, Michigan can only impose a lien on
real and personal property after the recipient dies. See MCL §400.112g , MI Medicaid
State Plan at 94. The state will send an estate recovery notice to the recipient’s estate
representative informing him or her that the state plans to file a claim. The notice will
include information about the amount of the claim and how the representative can file for
exceptions. The state can ask for repayment of nursing facility services, MI Choice home
and community based waiver services, home health, home help, and hospital or
prescription drug services made on or after July 1, 2010, and made after the recipient has
reached the age of 55 years. MSA Bulletin 11-20. The request for an exception must be
filed within 60 days of the estate recovery notice. The policy exceptions are consistent
with the language in the original state legislation, making estate recovery in Michigan
fairly generous as compared to the program in other states. Two types of exceptions may
be found: if there is an undue hardship and if there are survivors living in the home at the
time of the death who fall within certain criteria.
The limited explanations provided in the policy seem to give the department much
leeway in determining when a beneficiary will be given an exception. While these policy
changes are expected to go into effect in July of this year, the state has not released the
information that will be included in the notice packets and neither the website nor the
address for submitting undue hardship waiver applications is up and running. Because
the state legislation allows the recovery to be avoided if the costs of pursuing recovery
exceed the benefit to the department, the exceptions may remain flexible as they are
implemented. MCL §400.112g.
What Should Advocates Do?
Explain to clients that there are exceptions to estate recovery and that, with proper
planning, their assets may be preserved for their heirs. Because this is a new program,
we do not know how strictly the state will implement it. In some cases, it may be true
that it is simply not worth the state’s effort to try to recover from small estates. To
submit a comment to MDCH, write to: Eligibility Policy, Michigan Department of
Community Health, Medical Services Administration, P.O. Box 30479, Lansing, MI
48909-7979, or send an email with "Estate Recovery" in the subject line to
eligibilitypolicy@michigan.gov. If you have concerns about SB 404, contact your
senator.
What Should Clients Do?
Speak to an attorney about the best way to preserve your assets for your heirs. An
attorney should explain the exceptions to estate recovery and which exceptions may
apply to your situation.
Finding Help
Most legal aid and legal services offices handle these types of cases, and they do not
charge a fee. You can locate various sources of legal and related services, including the
free legal aid office that serves your county, at MichiganLegalAid.org. You can also look
in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800)
968-0738.
Michigan Medicaid State Plan available at http://www.michigan.gov/mdch/0,1607,7-1322943_4860-225474--,00.html (see pages 94-100 and Attachment 4.17 A at page 582).
DHS Bridges Administrative Manual available at:
http://www.mfia.state.mi.us/olmweb/ex/html/ (see section 400).
SB 404 available at: http://www.legislature.mi.gov/ (search for “SB 404”).