Estate Recovery Timing Rule Clarified

The Court of Appeals issued a published opinion in four estate recovery cases that were combined for the purpose of this opinion. Click here to read the opinion.

In each case the following facts were in play:

  • Someone began receiving long term care Medicaid benefits before the State of Michigan started putting language in the Medicaid application that notified applicants that the property in their estate would be subject to recovery under Michigan’s estate recovery program; and before Michigan’s estate recovery laws had received federal approval.
  • At some subsequent date they filed a redetermination application which included language notifying them about the estate recovery program.
  • In July 2011, the federal government approved Michigan’s estate recovery plan.
  • The Medicaid beneficiary died with assets in a probate estate.
  • The State of Michigan filed a claim in the estate seeking recovery for benefits back to July 2010.

In this case the Court of Appeals held that the State is limited to collecting on estate recovery claims to the period after July 1, 2011, the date the COA finds that Michigan’s estate recovery program obtained federal approval.

It is interesting that these exact facts were in play in the In Re Keyes Estate [click on the name to read opinion] which first announced that the estate recovery language in the Medicaid application was sufficient to give notice; and held also that even if the notice language was not provided to the Medicaid beneficiary when they first began receiving assistance, the State was not prohibited from bringing an estate recovery claim against their estate if they subsequently did get written notice. However, and somewhat amazingly, the Keyes case failed to clearly state when the claim would begin – which became the issue in these cases.  This opinion closes that loop.

There are some other interesting issues and dicta in this opinion, including dicta about the ability of the State to pursue estate recovery claims against estates of de minimus value.

It is also interesting to observe that there was a dissenting opinion in this matter. One Judge concludes that the result in these cases is controlled by the Keyes decision, and even if Keyes did not clearly address this issue, this Judge opines that the result should be that the State is not precluded from going back to 2010.

Will the State seek leave to the State Supreme Court?  We’ll see.

For clarification, this is a different issue than the issue addressed in the post immediately prior to this post regarding the hardship waiver and the Ketchum case.  We are still awaiting that opinion.

  • Melissa Hallack

    You state that Federal approval was July 1, 2011. However the majority states that Federal Approval for DHHS was given on May 23, 2011, and that “implementation” by DHHS is what actually took place on July 1, 2011, the date that the department circulated instructions to implement the plan. “Implementation” being the key word. MCL 400.112(g)5 states that the department “shall not implement a MMERP until approval by the federal government is obtained.” The majority defines implementation, doesn’t that seem to give the date of actual implementation more significance than the approval date? I should add that I do agree that retroactivity is barred further back then the date of July 1, 2011 which is the date of actual implementation by the department but not the date of approval. Seems to leave room for argument as to when a plan is Implemented?