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Minnesota Department of Human Services Estate Recovery Basics

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Presentation on theme: "Minnesota Department of Human Services Estate Recovery Basics"— Presentation transcript:

1 Minnesota Department of Human Services Estate Recovery Basics
Minnesota Medicaid Estate Recovery Basics Dale B. Klitzke SRU Manager

2 Purpose Provide a quick background of the Medicaid estate recovery program and the Minnesota estate recovery process.

3 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.

4 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.

5 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

6 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.

7 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.

8 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

9 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

10 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

11 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

12 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.

13 MAGI Population and Recoveries
Basics: MA liens under Minn. Stat. § 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.

14 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.

15 Minnesota Liens Two types of liens are used in MN
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 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.

16 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.

17 Incentive for Counties Incentive for State
Major Program Eligibility Type Federal State County MA EX 50% 25% AA NA AX 100% 0% AC 40% 10%

18 2013 Recoveries County Recoveries State 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

19 Contact SRU Property Liens:
A-G Jan Curran H-M Denise Meyer N-R Greg Lulic S-Z Kelly Buckley Policy Questions: Dale Klitzke Kendel Waterkamp Vomastek

20 Questions

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