Everything you wanted to know about the
Department of Human Services' Medicaid Lien and Probate Estate cases but
were afraid to ask
Jacqueline G. Kelley, Assistant Director of the Department of Human Services, has worked as an attorney for the State of Rhode Island since 1992, as a Special Assistant at the Department of Attorney General, Deputy Chief Legal Counsel at the Department of Human Services, and more recently Assistant Director at the Department of Human Services.
Rhode Island General Law §40-8-15. “Lien on deceased recipient’s estate for assistance. – (a) Upon the death of a recipient of medical assistance …. the total sum of medical assistance so paid on behalf of a recipient who was fifty-five (55) years of age or older at the time of receipt of the assistance shall be and constitute a lien upon the estate, as defined herein, of the recipient in favor of the department of human services. The lien shall not be effective … against the estate of a recipient who is survived by a spouse or a child who is under the age of twenty-one (21), or a child who is blind or permanently and totally disabled… the lien shall not be effective … unless the department has filed a claim for reimbursement in the probate court in accordance with §33-11-5 [against] all real and personal property and other assets included or includable within the individual’s probate estate.”
Q. When does lien attach?
A. The lien attaches at death. See R.I.G.L. §40-8-15 (a).
Q. Who is responsible for the total claim by the Department of Human Services?
A. The Department of Human Services only has a claim on what is in the probate estate. The heirs are not responsible for any amounts over and above what remains in the estate. Consequently, frequently the Department of Human Services is not made whole and merely collects in accordance with the probate priority statute.
Q. Is the Department of Human Services willing to compromise liens?
A. No. The Department of Human Services reports to the federal government (CMS) with regard to its recovery. In cases where there is enough to pay the Department’s lien in accordance with the probate priority statute (R.I.G.L. 33-12-11), the Department of Human Services will not compromise. However, the Department recognizes that in most instances its lien is larger than the value of the probate estate. Consequently, the Department will take what remains in the estate in accordance with the probate priority statute.
Q. Where does the Department of Human Services fall in the probate cases?
A. The Probate Priority Statute R.I.G.L. 33-12-11 provides for the order of preference of debts under which the Department of Human Services potentially falls. Sections: (2) the necessary expenses of his or her last sickness as well as item (4) debts due to this state, and all state and town taxes apply to the Department of Human Services. In the Estate of Cripe vs. Elkhart Department of Public Welfare, 660 N.E. 2d 1062 (1996) the court erred in failing to allow priority claim of the Department against the estate with regard to payment in accordance with priority statute.
Q. What if a spouse or a child survives?
A. In estate recovery, recoupment of medical assistance may not be made if a spouse or minor child or disabled child survives the decedent. (See R.I.G.L. § 40-8-15.) See Estate of Burstein, 160 Missc.2d 900, 611 N.Y.S.2d 739 (1994).
Q. Once a medical assistance recipient passes away, does the state pursue the surviving spouse?
A. If the surviving spouse is also medical assistance recipient, the State will pursue the medical assistance paid on the behalf of that surviving spouse only at the time of that spouse’s death. However, if the surviving spouse is not a medical assistance recipient, the Department of Human Services does not pursue the surviving spouse at any time for those monies expended on the first spouse. Recovery of medical assistance benefits from a surviving spouse’s estate exceeds the authority of the state. See Estate of Budney vs. State of Wisconsin, Department of Health and Social Services, 197 Wis.2d 948, 541 N.W. 2d 245 (1995).
Q. If I am a closing attorney for a real estate transaction where there is an estate sale, what is the Department of Human Services’ lien amount and is there any interest?
A. The Department of Human Services’ lien amount is the amount of the claim that they have filed in probate court. There is no interest attaching to this claim.
Q. Is there any way to get out of this lien?
A. The Department of Human Services has a hardship policy with regard to certain cases. The DHS Manual Section 0312.40 found at DHS website (www.dhs.state.ri.us) states that the Department of Human Services may delay the execution of its lien if:
1) an individual was using the property as a principal place of residence
on the date of the recipient’s death; and
2) that individual resided in the decedent’s home on a continual basis for at
least twenty-four (24) months immediately prior to the date of the
deceased recipient’s death; and
3) that individual has, from the time the Department first presented its
claim for recovery against the deceased recipient’s estate and after, annual gross income in an amount not to exceed 250 percent of the then applicable federal poverty level (FPL) income standard based on the same family size, and assets not to exceed the then applicable Medically Needy resource standards (see section 0338.05).
And the individual would (a) be rendered homeless; (b) lose means of livelihood; or (c) be deprived of food, clothing, shelter or medical care such that life would be endangered should a finding of undue hardship be denied.
Q. Where else can we find more information about the Department of Human Services’ procedures with regard to estate recovery?
A. The Department of Human Services policy manual is found at the website
(www.dhs.state.ri.us). The section with regard to liens and recovery of MA payments is found in Section 0312. This lien and recovery of MA payments is done as a result of the federal mandate enacted in the Omnibus Budget Reconciliation Act of 1993 (OBRA 1993).
