Louisiana citizens are being blindsided by the recent aggressiveness of the State of Louisiana in seizing property and assets from heirs upon their family members’ deaths who were over 55 and received long-term care paid for by Medicaid. Medicaid’s Estate Recovery Program affects the estates of inpatients of nursing facilities, intermediate care facilities for the intellectually disabled, medical institutions, and can include nursing home care, community assisted living and homebased services.

Ric Cochran works for SAFE Planning, where he assists families with planning for long-term care and Medicaid. “Medicaid Estate Recovery is the process of states attempting to recapture money spent on Medicaid patients as authorized under the Omnibus Budget Reconciliation Act of 1993,” he explained.

Attempts by the state to recoup costs can target all real and personal property and other assets considered to be part of an individual’s estate under state law. “The state hasn’t been consistent in recovery in the 18 years we’ve been dealing with Medicaid,” Cochran said. “For most of the time, there was so little activity, most believed Medicaid simply didn’t bother. We’ve seen them get much more active in the last year. Claims have been against estates of all sizes, even to the point of sending letters where there was no estate to recover against.”

Cochran recounted the story of one man, Dan, whose mother passed away after spending years in a nursing home with Alzheimer’s. “Dan had looked after her for years, and the siblings agreed it was only fair that he inherit their mom’s homestead,” Cochran said. “The children were flabbergasted when they got a notice of Estate Recovery seeking to collect against her estate.”

In this case, the children didn’t think it was fair because they had spent all of their mother’s money at the nursing home before Dan ever filled out papers for Medicaid to pay. “Dan’s mom only got to keep $38 a month for personal needs out of her income,” Cochran said. “The rest of her income went toward the nursing home cost. Medicaid picked up the balance each month. Dan often went into his savings to provide for his mom’s additional out-of-pocket needs, including better-fitting diapers. He spent his own money maintaining her home, paying property taxes, homeowners’ insurance, utilities and keeping the grass mowed. After all, he was in her will to inherit it. He didn’t know the state had priority.”

“Once Medicaid Recovery sends a recovery letter, time is on the state’s side, and it’s up to the heirs to be persistent and expedient, rather than the state,” Cochran said. “Policy provides just 30 days from the date of the letter to respond – and respond correctly. If heirs don’t respond within that brief period, or don’t respond correctly, policy leaves them no avenue of appeal.”

Dan didn’t realize that there were additional rights not mentioned in his letter that he could have asserted to have the amount waived or reduced in a way that would have allowed him to keep the house. “Dan didn’t act within 30 days of receiving the notice,” Cochran said. “The full amount sought by the state became final and enforceable with no administrative or judicial appeal.”

It is crucial that anyone facing long-term care of a family member consult an expert before filling out the Medicaid paperwork. “We frequently meet with people who made costly mistakes on the advice of well-meaning friends or financial and legal professionals who don’t handle Medicaid claims full-time,” Cochran said, “and even from Medicaid workers who are often wrong about their own policy. For example, the state provides a way for people to initiate their own recovery letter from the state online in case the state doesn’t send one. I wouldn’t recommend anyone request a letter and lien without first obtaining assistance from someone highly experienced with the process and knowledgeable about what Medicaid doesn’t tell heirs.”

“There’s no cookie cutter solution for everyone,” Cochran said. “Someone called us recently about a claim against her mother’s home for $71,735. Based on the information we submitted, the claim was reduced to $1,720. She told us Medicaid didn’t inform her of any of the ways we used to get the claim reduced.”

Cochran has even gotten many claims reduced to nothing. “I don’t know any financial risk greater than the risk of needing long-term care,” Cochran said. “The key is to get help from someone engaged in all phases of assisting people needing long-term care. Don’t go by just what you hear or read on the Internet. The cost of mistakes is way too high.”

Many people mistakenly believe a family member can’t qualify for benefits because it is too late or they have too many assets or too much income. “One of my clients came in one afternoon and told me about how the cost of his wife’s care at around $5,000 a month was breaking him,” Cochran said. He had already spent over a hundred thousand dollars on her care over the last couple of years. I told him the good news is that we could get her on Medicaid in about 45 days and preserve their entire estate. The bad news was that we couldn’t go back and get him the money he’d already spent by not engaging us earlier. He died about a year ago in his easy chair at home. His wife is still receiving care in a nursing home. The entire estate was protected, and there will be no recovery when she dies because of our work. This is a very common situation around here.”

–Susan Reeks

FOR MORE INFORMATION

For how to get started navigating Medicaid regulations, call Ric Cochran at SAFE Planning at (318) 869-3133.