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Medical Assistance

2.1.1.2.1.2 Liens (Archive)

The Minnesota Department of Human Services (DHS) files liens against real property interests to recover the amount Medical Assistance (MA) paid for certain services described in state and federal law. A lien is a legal right or interest that a creditor has in another person’s property until the creditor’s claim has been repaid or the lien expires. Real property includes land and buildings on land.

The DHS lien process is separate from county-administered estate recovery, though liens help secure county claims against estate assets.

Recoverable Services

The costs of the following program services can be recovered by a lien: 

  • MA

  • General Assistance Medical Care (GAMC)

  • 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 lien collection purposes.

Nonrecoverable Services

The costs of the following program services cannot be recovered by a lien:

  • MinnesotaCare

  • Consolidated Chemical Dependency Treatment Fund (CCDTF)

  • Alternative Care (AC)

    • Note that AC services received on or after July 1, 2003, are recoverable by an estate claim.

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

Populations Affected by Liens

Notice of Potential Claim

Only a Notice of Potential Claim (NPC) can be filed against an MA enrollee’s real property interests if the enrollee’s eligibility basis was Families with Children and Adults (MA-FCA) when the enrollee received services on or after age 55. DHS cannot file MA liens against these enrollees’ real property interests.

An NPC can be filed against an MA enrollee’s real property interests if the enrollee’s eligibility basis was anything other than MA-FCA when the MA enrollees received services on or after age 55.

MA Lien

An MA lien can be filed against an MA enrollee’s real property interests if the enrollee’s eligibility basis was anything other than MA-FCA when the MA enrollee receives services at 54 years of age or younger when residing in a medical institution for six months or longer without reasonable expectation of discharge

An MA lien can also be filed against an MA enrollee’s real property interests if the enrollee’s eligibility basis was anything other than MA-FCA when the MA enrollee receives services at 55 years of age or older when residing in a medical institution without reasonable expectation of discharge.

Amount of Recovery

The maximum amount recoverable under an MA lien or NPC is the total amount of the following services, when applicable:

  • MA received at age 55 or older

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

  • GAMC received at any age

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

Liens on Real Property

There are two types of liens that DHS files to secure repayment of MA:

  • MA liens (also called TEFRA liens)

  • Notices of potential claim (NPCs)

Medical Assistance Liens (TEFRA Liens)

An MA lien is a lien filed against an MA enrollee’s real property interest before the enrollee dies to secure repayment of MA costs of the enrollee’s permanent stay in a medical institution. DHS collects on MA liens when real property is sold, which may happen before or after the enrollee dies.

DHS only files MA liens after an enrollee enters a “medical institution.” Medical institutions include the following:

  • Nursing facilities

  • Skilled nursing facilities

  • Intermediate care facilities

  • Intermediate care facilities for persons with developmental disabilities

  • Inpatient hospitals

When a person applies for MA coverage for services received in a medical institution, the county agency submits a Medical Assistance Lien and Notice of Potential Claim (NPC) Worksheet (DHS-3203) to DHS. A lien worker in the DHS Special Recovery Unit reviews the worksheet. For an MA lien to become effective, the lien worker must ensure the following has occurred:

  • DHS has made MA payments on behalf of the enrollee;

  • DHS has obtained verification from the enrollee’s attending physician that the enrollee cannot reasonably be expected to be discharged and return home;

  • the enrollee has been provided with notice of the lien and an opportunity for an administrative hearing;

  • all exemptions against the enforcement of the lien no longer apply; and

  • the lien notice has been filed in the county recorder’s office or memorialized on a certificate of title for the property.

If the above conditions are not met, DHS cannot collect on an MA lien. DHS must release an MA lien before the real property is sold if an enrollee leaves the medical institution and rejoins the community.

An MA lien is enforceable for 10 years from the date of its filing. DHS may renew the lien for an additional 10 years.

Notices of Potential Claim (NPCs)

An NPC is a lien filed against an enrollee’s real property interest to secure repayment of MA costs subject to estate recovery. DHS can file an NPC before, or within one year after, an MA enrollee’s death. An NPC is not a lien until the enrollee dies. Until the enrollee dies, an NPC only serves as notice that an MA estate claim could be made against a specific interest in real property in the future.

NPCs are enforceable for 20 years from the date of filing, or from the date of the enrollee’s death, whichever is later.

Life Estate and Joint Tenancy Interests

If person owns a life estate or joint tenancy interest in real property when he or she dies, and the interest was established on or after August 1, 2003, that interest remains subject to a lien after death to satisfy repayment of MA. 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.

Exemptions from Liens

MA liens

When an exemption applies to an MA lien, DHS cannot file the lien. Real property is exempt from an MA lien if the real property is the homestead of one or more of the following people:

  • An enrollee’s spouse

  • An enrollee’s child who is younger than age 21

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

  • An enrollee’s child of any age who:

    • lived on the property for at least two years before the enrollee began receiving institutional care,

    • has continuously lived on the property since the enrollee’s date of institutionalization, and

    • provided care that allowed the enrollee to remain in the community.

  • An enrollee’s sibling who:

    • has an equity interest in the homestead,

    • resided in the home for at least one year before the enrollee began receiving institutional care, and

    • has continuously lived on the property since the enrollee’s date of institutionalization.

NPCs

When an exemption applies to an NPC, DHS can file the lien but it cannot collect on the lien until (1) the enrollee dies and (2) the exemption is no longer in effect. Real property is exempt from an NPC if the real property is the homestead of one or more of the following people:

  • An enrollee’s spouse

  • An enrollee’s child who is younger than age 21

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

  • An enrollee’s child or grandchild of any age who:

    • lived on the property for at least two years before the enrollee began receiving institutional care,

    • has continuously lived on the property since the enrollee’s date of institutionalization, and

    • provided care that allowed the enrollee to remain in the community.

  • An enrollee’s sibling who:

    • resided in the home for at least one year before the enrollee began receiving institutional care and

    • has continuously lived on the property since the enrollee’s date of institutionalization.

American Indian and Alaskan Native Exemptions

The following American Indian and Alaska Native ownership interests in trust or non-trust property, including real property and improvements, are exempt from MA liens and NPCs:

  • 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

  • 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, who their culture would protect as family members; to a Tribe or Tribal organization and/or to one or more Indians

Legal Citations

Minnesota Statutes, section 256B.15

Minnesota Statutes, sections 514.980 to 514.985

United States Code, title 42, section 1396p

Published:  June 1, 2016

Archived:  August 1, 2016