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Medical Assistance

2.1.1.2.1.1 Estate Recovery (Archive)

Medical Assistance (MA) estate recovery is a program that the federal government requires the State of Minnesota to administer to receive MA funds. County agencies, on behalf of the state, assert MA claims against the estates of deceased MA enrollees, or the estates of the enrollees’ spouses, to recover the amount MA paid for certain services described in state and federal law.

Recoverable Services

The following program services are subject to estate recovery: 

  • MA

  • General Assistance Medical Care (GAMC)

  • Alternative Care (AC) services received on or after July 1, 2003

  • Medicare Savings Program (QMB, SLMB, QI and QWD) services received before January 1, 2010

Generally, all these program services fall under the definition of “MA” for estate recovery purposes.

Nonrecoverable Services

The following program services are not subject to estate recovery:

  • MinnesotaCare

  • Consolidated Chemical Dependency Treatment Fund (CCDTF)

  • Alternative Care (AC) for services received prior to July 1, 2003

  • Medicare Savings Program (QMB, SLMB, QI and QWD) services received on or after January 1, 2010

Populations Affected by Estate Recovery

Counties file a claim against the estate of an MA enrollee, or the estate of the enrollee’s spouse, if the enrollee’s eligibility basis was Families with Children and Adults (MA-FCA) when the enrollee received services on or after age 55.

Counties file a claim against the estate of an MA enrollee, or the estate of the enrollee’s spouse, if the enrollee’s eligibility basis was anything other than MA-FCA when the MA enrollee received services:

  • At age 55 or older

  • At any age in a medical institution for six months or longer without reasonable expectation of discharge

Counties file a claim against the estate of a GAMC enrollee, or the estate of the enrollee’s spouse, for all GAMC services received at any age. The GAMC program no longer exists, but costs of services provided under GAMC while it was in existence are recoverable. 

Amount of Recovery

The maximum claim is the total amount of the following services, when applicable:

  • MA received on or after age 55

  • MA received at any age while permanently residing in a medical institution

  • GAMC received at any age

  • AC received on and after July 1, 2003

  • Medicare Savings Programs (QMB, SLMB, QI and QWD) received before January 1, 2010

Recoverable Assets

County agencies may recover against the following assets:

  • the person's probate estate;

  • all of the person's interests or proceeds of those interests in real property the person owned as a life tenant, or as a joint tenant with a right of survivorship, that were established on or after August 1, 2003, and were owned at the time of the person’s death;

    • Recovery on a life estate is limited to the value of the person's interest on the date of death as determined by the Life Estate Mortality Table.

  • all of the person's interests or proceeds of those interests in securities the person owned in beneficiary form at the time of the person's death, to the extent the interests or proceeds of those interests become part of the probate estate;

  • all of the person's interests in joint accounts, multiple-party accounts, and pay-on-death accounts, brokerage accounts, investment accounts, or the proceeds of those accounts at the time of the person's death to the extent the interests become part of the probate estate; and

  • assets conveyed to a survivor, heir, or assign of the person through survivorship, living trust, or other arrangements.

Methods of Estate Recovery

Five methods of distributing property after a person dies allow county agencies to claim against an estate: probate, special administration, decree of descent, affidavit of collection of personal property, and transfer on death deed.

Probate

The county of financial responsibility files a claim in a district court where the enrollee’s or the enrollee’s spouse’s estate is being administered as soon after the enrollee’s death as possible.

If the decedent or a deceased spouse of the decedent received assistance for which a claim could be filed, the personal representative of the estate, or the attorney for the personal representative, must serve the commissioner of human services with a Notice to the Commissioner of a possible MA claim.

The Notice to the Commissioner must include the decedent’s and each of the decedent’s deceased spouses’ full names, dates of birth, and Social Security numbers. Once DHS receives the notice, DHS determines whether the decedent, or the decedent’s deceased spouse(s), received MA. DHS then responds to the personal representative, or the attorney of the personal representative, with that determination. DHS also sends a response to the county of probate and to the county of financial responsibility (if different from the probate county).

A claim within a probate proceeding must be in writing and contain the claimant’s name and address, the amount of the claim, and the basis of the claim. The claim can be presented by delivering or mailing it to the personal representative or by filing it with the court administrator.

Special administration

A special administration is probate proceeding used when prompt action is necessary to protect and preserve a decedent's assets before a personal representative can be appointed, or if a personal representative cannot act. A special administrator is appointed to collect, manage, and preserve estate assets. To accomplish these duties, the special administrator has all the powers of a general personal representative.

If a county agency receives notice that a special administrator has been appointed to administer assets in an estate subject to an MA claim, the agency can claim against those assets.

Decree of Descent

A determination of descent is a specialized court proceeding that can only occur when:

  • a deceased person has been dead for more than three years,

  • the deceased person left real or personal property, and

  • the deceased person’s estate has not yet gone through probate in Minnesota or in any other state.

Any interested party, including a county agency, may petition a court to determine the descent of the estate’s property and assign title to the correct parties under law. After a petitioner or the petitioner’s attorney files a petition for a decree of descent, he or she must apply to the county agency for a clearance of MA claims against the decedent or a deceased spouse who received benefits. This is called a clearance certificate.

The petitioner must submit the Application for Certificate of Clearance for Medical Assistance - Decree of Descent (DHS-6165A) to the county. The county completes the Certificate of Clearance for Medical Assistance Claim-Decree of Descent (DHS-6165B) and states the dollar amount for the MA claim. A satisfied certificate of clearance is required for clear title.

When the petitioner receives the certificate of clearance, he or she must file the certificate into the decree of descent proceedings as soon as possible. Filing a certificate with an MA claim amount has the effect of filing an MA claim that identifies the county as the claimant. The county agency can only enforce its claim listed in the certificate against property of the decedent that is subject to the proceedings.

Affidavit of Collection of Personal Property

Counties may use an Affidavit of Collection of Personal Property to collect against assets of a deceased MA enrollee or the assets of the recipient’s deceased spouse. To serve an affidavit, the county must ensure that the following conditions are met:

  • The enrollee has been deceased for at least 30 days.

  • No application or petition for the appointment of a personal representative is pending or has been granted.

  • The assets consist entirely of personal property.

  • The value of the estate, less liens and encumbrances is $50,000 or less.

The county serves the affidavit on the financial institution, person or other entity holding the deceased person’s money or property, including the contents of a safe deposit box. The institution, person, or other entity receiving the affidavit is only obligated to turn over the deceased person’s money or other property still in its possession when the affidavit is served.

The institution is not obligated to turn over funds or property that has already been distributed to the joint owner or payable-on-death beneficiary. If the funds or property has already been distributed to the joint owner or payable-on-death beneficiary, the county can determine if they can assert a claim against the distributed assets through an affidavit of collection.

Transfer on Death Deed

A transfer on death deed (TODD) allows title of real property to transfer to a named beneficiary at the death of the owner, or the last to die of multiple owners. At the time of the death of the grantor owner of a TODD, the grantee, or the grantee’s attorney or agent, must apply to the county agency for an Application for Certificate of Clearance for Medical Assistance Claim-Transfer on Death Deed (DHS-5893) to request clearance of MA claims against the grantor owner or the grantor owner’s deceased spouse.

Any MA claim is payable, in whole or in part, from the property identified in the certificate of clearance. The claim can be allowed, denied, and appealed in the same way as a claim in a probate proceeding. The county, or any person claiming an interest in the real property, may petition the district court for an order determining the validity of the MA claim and allowing sale of the real property for the recovery of MA benefits received. The net sale proceeds from such a sale must be used to pay MA claims if the MA claim is determined valid.

Exemptions from Estate Recovery

An estate claim may be filed, but not collected on, when one or more of the following people survive the enrollee:

  • A spouse

  • A child younger than age 21

  • A child of any age who is blind or totally and permanently disabled according to Supplemental Security Income program criteria

American Indian and Alaska Native exemptions

The following American Indian and Alaska Native income, resources, and property are exempt from MA estate recovery:

  • Certain American Indian and Alaska Native income and resources (such as interests in and income derived from Tribal land and other resources currently held in trust status, and judgment funds from the Indian Claims Commission and the U.S. Claims Court) that are exempt from Medicaid estate recovery by other laws and regulations;

  • Ownership interest in trust or non-trust property, including real property and improvements for any of the following:

    • Property located on a reservation (any federally recognized Indian Tribe’s reservation, Pueblo, or Colony, including former reservations in Oklahoma, Alaska Native regions established by Alaska Native Claims Settlement Act and Indian allotments) or near a reservation as designated by the Bureau of Indian Affairs. See the MinnesotaCare Health Care Reform Waiver Annual 2003 Report, Attachment D3 (Reservation Map/Contract Health Service Delivery Areas).

    • Property located within the most recent boundaries of a prior Federal reservation for any federally recognized Tribe not described in the paragraph above.

    • Protection of non-trust property described as on or near a reservation is limited to circumstances when it passes from an Indian to one or more relatives (by blood, adoption, or marriage), including Indians not enrolled as members of a Tribe and non-Indians, such as spouses and step-children, that their culture would protect as family members; to a Tribe or Tribal organization and/or to one or more Indians.

  • Income left as a remainder in an estate derived from property protected in trust or non-trust located on a Federal reservation or within most recent boundaries, that was either collected by an Indian, or by a Tribe or Tribal organization and distributed to Indians, as long as the person can clearly trace it as coming from the protected property;

  • Ownership interests left as a remainder in an estate in rents, leases, royalties, or usage rights related to natural resources (including extraction of natural resources or harvesting of timber, other plants and plant products, animals, fish, and shellfish) resulting from the exercise of federally protected rights, and income either collected by an Indian, or by a Tribe or Tribal organization and distributed to Indians derived from these sources as long as the person can clearly trace it as coming from protected sources; and

  • Ownership interests in or usage rights to items not covered above that have unique religious, spiritual, traditional, or cultural significance or rights that support subsistence or a traditional life style according to applicable Tribal law or custom.

Long-term Care Partnership

An amount equal to the total amount paid by a Long-term Care Partnership (LTCP) policy is protected as an asset during the person’s lifetime and from estate recovery after his or her death. The protected asset limit (PAL) is the amount equal to the amount of insurance benefits the LTCP policy paid on the enrollee’s behalf. See the MA Long-term Care Partnership policy for more information.

Undue Hardship Waiver

When a county agency claims against an estate, the county notifies all heirs and devisees of the decedent (whom the county can identify through reasonable diligence) about the MA claim. This Notice of Claim for Medical Assistance in Decedent’s Death (DHS-4934) informs heir and devisees about undue hardship waivers.

Any person entitled to this notice has a right to apply for waiver of the claim based on undue hardship. To do this, the person must submit an Application for a Waiver of Claim (DHS-4933) to the county agency.

  • The county may fully or partially waive a claim if it determines there is undue hardship.

  • The county may defer recovery if it determines there is undue hardship.

Legal Citations

Minnesota Statutes, section 256B.15

Minnesota Statutes, section 524.3-805

United States Code, title 42, section 1396p

Published:  June 1, 2016

Archived:  August 1, 2016