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

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.

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

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  1. Minnesota Department of Human Services 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. §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.

  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 CountiesIncentive 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 CountiesIncentive for State

  18. 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

  19. Contact SRU Property Liens: A-G Jan Curran 651-431-3154 jan.curran@state.mn.us H-M Denise Meyer 651-431-3158 denise.meyer@state.mn.us N-R Greg Lulic 651-431-3152 greg.lulic@state.mn.us S-Z Kelly Buckley 651-431-3115 kelly.buckley@state.mn.us Policy Questions: Dale Klitzkedale.klitzke@state.mn.us 651-431-3108 Kendel WaterkampVomastek kendel.waterkamp-vomastek@state.mn.us 651-431-5805

  20. Questions

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