resting as it does on the affirmative and negative aspects of Congress’ regulation of state recoveries under Medicaid, but there seems to be reason to attack such expansive claims.
Estate Recovery While trial lawyers may naturally feel
most concerned about what comes out of a settlement up front – in the form of Medicaid subrogation claims – they should be equally concerned about what happens at the back end through Medic- aid estate recoveries. Where the injured person has already died so that his estate is the plaintiff, estate recovery looms at least as large as subrogation. This is also true where the plaintiff estate pays in whole or part to the estate of someone who had received Medicaid (typically a spouse). Clients may not feel they have gotten much benefit of litigation counsel’s work in settling a claim for an estate where most or all of the recovery is lost to an estate recovery claim by Medicaid. Congress did not require any estate
recovery until 1993, but both D.C. and Maryland already had broad estate recovery programs under the prior permissive Federal law. In that year, Congress required some estate recovery in all States, but continued or added a number of limitations:
– It requires estate recovery for nursing home services, “home and commu- nity-based services,” and related hospital and drugs services in all States.8
Id., § 1396p(b)(1)(B)(I).
– Other services can also be the sub- ject of recovery, but only if specified in the State’s “Medicaid State Plan.” Id., § 1396p(b)(1)(B)(ii).
8
“Home and community-based services” refers to services provided under a so- called waiver program for people who required institutional care but could be managed less expensively in their home or in assisted living; related hospital and drug services are those services for institutional- ized individuals.
58
– Where the estate is the plaintiff, distributing its cause of action to a person entitled to take it without recovery would avoid the problem presented by the latter’s death. That is, if the decedent’s spouse has survived but is not in good health, distributing the cause of action to the spouse while she is living avoids the adverse effect of loss of the defense if she passes away before settlement and distribution. This would be effective if she is not herself a Medicaid beneficiary, or
Trial Reporter
– But no recovery is permitted: • Uutil afer the death of a surviving spouse. Id., § 1396p(b)(2).
• If there is a surviving child under age 21 or who is blind or disabled. Id., § 1396p(b)(2)(A).
• For services provided when the beneficiary was under 55 years of age. 42 U.S.C. § 1396p(b)(1)(B).
• To the extent application of the recovery rule would work an “undue hardship.” Id., § 1396p(b)(3).
Estate recovery is fundamentally
different from subrogation: it applies to all assets, now matter how or when acquired, e.g., a home owned prior to eligibility or an inheritance acquired afterward, even after death. On the other hand, these specific limits on recovery are designed to protect others who fit within the appropriate category, with- out their own independent showing of need (except for hardship) or satisfying Medicaid eligibility requirements. There are a number of strategies avail- able to limit or avoid recovery:
– For individuals who are not ex- pected to survive, assigning their cause of action, if possible, to, e.g., a revocable living trust may avoid re- covery. Even if the plaintiff is at the time a Medicaid beneficiary, such an assignment should not result in a loss of benefits for long term or waiver care (the only kind subject to the Medicaid anti-transfer rules) since the value of the cause of action at that point is so speculative.
in any event if the claim against her estate would be substantially less.
– Likewise the distribution to a child under age 21 or a disabled child. But if the disabled child him or herself needs Medicaid benefits, the cause of action is only protected by plac- ing it in a special needs trust with payback for the disabled child.
– Although causation is not an is- sue, the other limits on recovery should be reviewed closely – were any benefits provided before age 55, was the Medicaid program entitled to recover for these services at the time they were provided, etc.
– Assignment of interests in an es- tate to the hardship claimant may preserve more of the recovery than could be done in any other way.
– Disclaimer, if it can be done timely, by the recipient estate where one es- tate is paying to a second (usually a spouse) with Medicaid recovery ex- posure. The disclaimer is a transfer for Medicaid purposes, for which the only remedy is loss of future benefits – hardly significant for an estate.
The Effective Response To Anticipated Claims
ATLA’s Center for Constitutional
Litigation, in its post-Ahlborn memo- randum, provided useful general advice on how to approach potential claims from both Medicare and Medicaid. Give the government agency notice, includ- ing reliance on Ahlborn, and ask for an accounting of costs. Decide as a tactical matter whether to seek recovery for medical costs paid by the government; be clear in your pleadings about that decision; factors to consider include the collateral source rule in your local jurisdiction, the possible size of any judgement/recovery, and the willing- ness of the government to contribute to litigation costs, etc. If you cannot get a satisfactory equitable apportionment of with the government agency, apply
Summer 2007
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76