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Medicaid Reimbursement Claim Must Be Filed in Time

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Medicaid reimbursement claim

If a person over age 55 receives long-term care from Medicaid the state may make a claim against their estate. The Medicaid reimbursement claim may seem like a pointless thing. After all, in order to qualify for Medicaid benefits the patient must be impoverished. So why would they have a probate estate anyway?

A Medicaid applicant is entitled to retain their home and still qualify for benefits. That frequently leads to this end-of-life scenario: a homeowner becomes ill, goes to the nursing home, applies for and gains Medicaid subsidy for the care, and then dies in the nursing home. Now the Medicaid agency may claim reimbursement from the value of the home.

But even Medicaid has to follow some basic rules. A recent Massachusetts case illustrates what happens when they don’t.

Ms. Kendall’s story

Jacqueline Kendall owned a one-half interest in her home in Gloucester, Massachusetts. She suffered from leukemia, and qualified for Medicaid coverage for much of her care. In fact, by the time she died in 2014, she had received $104,738.23 in benefits from Medicaid.

Because Ms. Kendall was over age 55, the Massachusetts Medicaid agency (MassHealth) had the ability to pursue a Medicaid reimbursement claim. But they did nothing to pursue it for almost four years.

In 2018 family members initiated a probate proceeding to transfer Ms. Kendall’s only significant asset — her one-half interest in her home. MassHealth filed a claim seeking reimbursement for its expenditures. But Massachusetts probate law says that no claims can be asserted against an estate more than three years after death — and her estate denied the claim.

MassHealth sought recovery even after denial of its claim. The agency argued that it had the right to make its claim regardless of time limits. It pointed to other sections of Massachusetts law that gave the state special rights in probate claims.

Massachusetts’s highest court took the case for resolution. The Supreme Judicial Court last week ruled that even the Commonwealth’s Medicaid agency must abide by the usual rules. The high courtdirected that their claim could not be paid. Matter of the Estate of Kendall, December 28, 2020.

What does that mean for the Medicaid reimbursement claim?

At least in the facts of Ms. Kendall’s case, it means that her interest in her home will pass to her heirs (she had no will) free and clear. MassHealth can not assert its claim after the three-year limitation period.

One thing MassHealth could have done (but apparently did not) would have been to place a lien against Ms. Kendall’s home. While they still might have been foreclosed from claiming against her probate estate, the lien would have been a continuing encumbrance that would have to be dealt with eventually. Arizona’s Mediicad agency, for instance, routinely files such liens to protect its interest.

Another thing that MassHealth could have done — and should have done — would be to initiate probate proceedings itself. As a creditor of her estate, MassHealth would have standing to force the probate before the three-year period expired.

Would the same thing happen under Arizona law?

It should. Massachusetts, like Arizona, has adopted the Uniform Probate Code. That’s where it’s three-year time limit comes from. Arizona has the exact same statute — except that we have shortened the period to two years.

There is also a separate statute that says no claims can be brought more than two years after a death. Massachusetts adopted the same version of that statute, and Ms. Kendall’s estate argued that the state was actually almost two years too late. But the state’s high court ruled that that statute wasn’t the one that prohibited payment of the claim. Instead, it relied on the statute that directed a personal representative not to allow or pay any claims when the proceeding was initiated more than three years after death. But since that statute sets the time limit at two years in Arizona, it should work the same way to prohibit allowing or paying the claim after that two-year mark.

ALTCS, Arizona’s Medicaid long-term care unit, has not actively initiated probate actions on its own. Of course that could change, but assuming it does nothing to get the probate filed and underway before the second anniversary of a death, and assuming that it has not filed a lien against the property, it should be foreclosed from pursuing its claim — just as MassHealth was in Ms. Kendall’s estate.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

Famous people's wills

Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.