Medicaid recovery letter. Any advice?

Yuki500: That's spot on---"no one likes taking care of the elderly." I attempted multiple times to get my mother into different living arrangements instead of her living all alone 400 miles away with multiple health issues. It came down to myself having to move there! I vowed to NOT DO THAT TO MY DAUGHTER and have already taken necessary steps thus far.

I read a lot of post, very helpful. But everyone needs to look into a web site called social security works. Com and get a living will for yourself ‘s and prioritize your assets and your needs as you age. Our parents didn’t think to do this, and we must for our children’s . No one likes taking care of the elderly, so don’t put your family though this. I know I’ve been there. The time is now.

LisaAnnB: Correction -I didn't mean to write "your name popped up somewhere." Yes, I know you were the one who started the post. My error.

Christine73 -
"Title search has to have come back clean or it would have stopped the sale. It's over. The funds may or may not be gone right now, but regardless, you can't attach someone's bank account."

Please be aware that bank accounts CAN be attached. It needs a court order, but Medicaid claw-backs are court backed. Also, just the title search is for the benefit of the buyer. It doesn't matter in this case because we are discussing the seller, who could still have a legal liability.

Thanks, igloo572--Your explanation was a helpful "lagniappe"!

Do not ignore the letter - but work with a Medicaid attorney. Just because the house was sold quickly and it is done does not mean that Medicaid can pound sand. They have the law behind their efforts to recover. Keep us posted.

Christine73, I don’t everystate, but the rule is call claw back. And I think it’s 5 yrs that they Medicaid can go back and get those funds. They will look at his w2 the Uncle, and see if he ad any assets, the house is an asset. It belongs to Medicaid. I’d get a social security lawyer who specializes in this. Yuki

I'd like to revise my response.

Before you contact an elder law attorney, have the family lawyer in LA explain to you (fully, including case law) why you can ignore the letter. If you are able to confirm what he says, that may be all you need.

Here's what I know about lawsuits (I'm a native NY-er, I know *a lot about lawsuits): in order to sue someone, there has to be something to attach, a house, an insurance policy. This house has passed through 2 hands since your uncle was approved for Medicaid. It's over. Your husbands sale of the house was legal. That's why buyers get an attorney and pay for a title search when they buy a house. Title search has to have come back clean or it would have stopped the sale. It's over. The funds may or may not be gone right now, but regardless, you can't attach someone's bank account. It's over. Medicaid obviously did not do their due diligence with regard to the gift and frankly, that's too bad for them.

The more I think about this, the more ludicrous it sounds. You do not *owe Medicaid anything. And there's nothing they can legally do about it!

I agree with the poster who said this may well be a scam!

LisaAnnB: Your name popped up somewhere in all of this. It seems that you will need to hire an elder estate lawyer as this could get tricky with the gifting of the house.

I would see an attorney that is familiar with the law or you get to pay for their education in finding it out. As others have advised, DO NOT respond to this letter, let an attorney do it. You never know, it could be a scam and any response from you just gives them more information. That it is addressed to you makes me leary of scam, women tend to be easier to frighten and if this is a scam, could be from obits and they are assuming you are now a widow? Just something to keep in mind. I know I am skeptical and in this day and age I confirm and question everything. Seen so many scams.

Best of luck with finding a good knowledgeable party and putting this to bed.

JacobsonBob - Boudreaux because it’s Louisiana & I just love the word.... all those vowels! plus an X... it’s a languid kinda sexy Louisiana surname imo. In So Louisiana humor, there’s the “Boudreaux & Thibodeaux” characters (akin to “Ole & Lena” for Minnesota). Boo has a beautiful but long suffering wife named Clotile (ClowTeeel) & a dog named Phideaux (Fido).

Disgustedtoo - totally imo, it’s #4 on your list. That’s my vote.
OP wrote that her hubs Aunt owned a house that was to be inherited by Aunts will to her estranged husband (who I called Uncle Boudreaux). Aunt will has it as Uncles inherited asset & he could have kept it under Medicaid rules as an exempt asset. But Uncle Boudreaux didn’t. Boo passed his ownership of the exempt asset to Auntie’s nephew & LisaAnnB’s husband, as that’s who Aunt wanted to inherit if both her & Uncle were deceased. Somehow in a short 2014 timespan there was application, property transfer & sale, probate / spousal affidavit, death, etc. State records didn’t dovetail all the info till probably 2015. Uncle Boudreauxs transfer of the house - which by doing this makes it a non exempt asset for Medicaid- finally surfaced. House cannot be properly transferred (sold) as there is a cloud on the title due to the ability of Medicaid to place a lien on property. As far as Medicaid is concerned there is no valid sale. Medicaid has a claim against the estate of uncle Boudreaux. House was his asset. Medicaid is following the $$$ and it lands at Lisa AnnBs mailbox.

For the buyer of Aunts house, all this could be a problem. That’s why I asked if the house was sold sold via Warranty Deed (as those usually almost always have title insurance). If it’s a Quit Claim Deed, there could be a clusterF on it to deal with. If LisaAnnBs hubs did it as a QCD, issue is QCD does not guaranteed ownership.

What’s so crazy in all this is that IF they would have just let empty house be and stay in Uncles name, then get inherited via Uncle Boudreauxs probate to hubs, Louisiana probably would have taken a pass on Recovery. (I’m assuming property value is low like under 50 - 75k; Uncle Boo did not have a M+ home in Old Metairie or Uptown NOLA but was like most elderly with an old house under 100k assessor value but with decades of delayed maintenance). The required cost benefit evaluation on Recovery for a old property would likely deem it not worthwhile to do Recovery especially if heirs open probate. Totally up to each state to determine what the tipping point is for doing Recovery beyond  the federal 3k/10k rule. Mississippi has 65k-85k as theirs for Recovery. & it makes sense as time & costs are the same for state or its outside contractor for a 35k property or one worth 350k. I know which I’d spent time on. 

LisaAnnB can you update us on what’s what? Thanks!

From that HHS page:
" Federal policy defers to states regarding how they track or monitor assets that pass to protected relatives in cases where the State retains its right to future recoveries from Medicaid recipients’ survivors."
Note "track", "monitor" and "right to future recoveries", so there is no olly olly oxen free here....

After doing some searching and brief perusal of the results, this is what I see now (unless otherwise stated, neither I nor anyone posting here is a legal expert - some may have had some experience with issues like these, but every case and every state is different!):

1. A house/property is protected under certain instances (spouse, disabled child, etc) but after the conditions are removed (death of spouse, person(s) move out, etc, that house becomes fair game. Other assets may also be protected, until death of the principle.
2. While Medicaid is a Federally provided service, states manage it and EVERY state has DIFFERENT rules
3. Sometimes recovery is waived, when it is not fiscally prudent to attempt (cost to recover exceeds yielded result)
4. Inheritance by a Medicaid recipient IS fair game.
5. Medicaid cannot ask for survivors to pay from their OWN assets (exception is based on #4)

Number 4 fits into this scenario asked about. The uncle was named as beneficiary of the aunt's home. If he waived this inheritance, it WILL be viewed as "gifting" and Medicaid can and likely will attempt recovery as generally a home has some wealth associated with it. There are rules about who recovers first (any mortgage, RE taxes, other debts, liens, etc), but after those are met, if there is any residual value left, Medicaid will likely attempt recovery. Don't discount them - this is not social services, Medicaid is a different animal! As I mentioned in a previous post, this may have initially slipped through the cracks, depending on when he applied/was approved for Medicaid and when the aunt passed away, as well as when the probate on the home was completed (it can take a year or more, depending on how complicated things are.) However, they can and do continue to monitor assets and income beyond the initial application and approval process. Despite the fact that the "assets" (money left over after the sale of the home) are now in OP's family, by law those assets *should* have been used for uncle first, so in this case I think Medicaid has the right to request reimbursement. I cannot say why the wife, not the husband, was contacted, however as others said, community property might apply, and any debt or windfall a person receives can be considered owned by a spouse as well (not so much an ex-spouse.) Skip-tracing uses methods to locate someone who has defaulted on payments, and I have been called about medical payments incurred by a former DIL - haven't seen her or talked to her in years, don't know where she is and this is NOT my problem!!! Medicaid probably uses similar methods to track down assets like these, and somewhere along the line the wife's name was used OR she was located by association.

The following is very long and detailed but it does discuss some of this. aspe.hhs.gov/basic-report/medicaid-estate-recovery

Note it is a Federal website: U.S. Department of Health & Human Services so it does cover a lot of the legal issues (but again, states have their OWN rules based on the Federal guidelines.)

What I did read in this and other legal websites makes perfect sense - let's make a hypothetical case:

* parent becomes unable to care for him/herself and must go to a nursing home (or other Medicaid covered facility, such as AL)
* parent has NO assets (no home, very little savings, relies on SS and possibly a small pension)
* parent applies for/is accepted under Medicaid rules. SS and pension, if applicable, MUST be used to pay for a portion of the cost
* Medicaid pays for the remainder of costs
* long lost cousin of parent dies and leaves assets to parent (does not matter what kind of assets or who left them)
Based on the reading, these assets MUST be used to pay for the current month, and possibly more - one needs LEGAL assistance at this point! In the case of property, like a house, it will take some time to wind through probate and sale, but in the meantime Medicaid can put a lien on the property, to recover funds after all the legal issues are completed. If this transfer of the house, as I noted here and previously, happened at a certain time when Medicaid would not "see" it, does not make it impervious to recovery. Medicaid will monitor the situation and will likely eventually see transactions like these. It is within their legal right to recovery.

This makes perfect sense to me. If parent was destitute, but suddenly receives a windfall (it could even be the surviving spouse's protected assets, if the spouse dies first), THOSE assets should be used to cover the costs of care (exclusion, in some cases, are assets that are protected in trusts, etc, but in my brief reading it seems like in some states even those could become fair game.) If it was a few hundred dollars, Medicaid is probably not going to bother (but one never knows until it happens!) With a house or substantial monetary assets (cash, stocks, other property, etc), Medicaid can and likely will seek to recoup costs from those assets, even after the death of the Medicaid recipient. OP mentions $52k, so yes, Medicaid IS going to want to try to recoup that!

I would still *HIGHLY* recommend the OP (and anyone else who has a similar scenario) to seek appropriate legal advice!!! Those who are saying they cannot come after your assets to pay for uncle's stay, no, not YOUR assets, but in this case they WERE really his, even if he waived his right to the property. If it was properly done, it would have passed to him first, making it HIS asset.

GO GET LEGAL ADVICE!!! As someone else recommended, I would let the attorney work with Medicaid - do not call them directly!!

Ask an elder law attorney if you need to respond to the letter. If you communicate with Medicaid at all, do it only through your attorney. My understanding, too, is that gifting affects eligibility, not recovery. The department of social services is notoriously incompetent, so my hunch is you have absolutely nothing to worry about. If you truly owed this money, I would think they would simply "attach" something instead of sending you a bill. YOU ARE NOT LEGALLY RESPONSIBLE FOR YOUR UNCLE OR HIS MEDICAID. It sounds a lot like they (Medicaid) dropped the ball when they approved your uncle's application, and now their trying to back track. Too bad, too late! Still, for your own piece of mind, let an elder law attorney tell you that,

First statement: I'm not an attorney! I just want to tell you an experience I had when trying to get my father in law on Medicaid in Fl. If you don't dot all the i's and cross the t's they don't contact you to let you know. They just throw the application away and you start all over. After YOU call them to check on the status. We we finally got the approval I was asking questions about the "look back" (not that they EVER in their lives had anything to look back on) and he told me and I quote " the state can and will look back and hound and threaten anyone for years but they Can't! make you pay it back." He said they just hope it scares you and you pay it. This doesn't help your situation but I wonder every now and then if he still has a job.

disgustedtoo--Thanks; maybe we need a "glossary" on this forum although, as you said, one usually can look up the acronyms, abbreviations and terms.

I've notice the federal government likes to put everything into three or four words, and then use the abbreviation or preferably an acronym. This is a way to make the simple things more complicated and abstruse. I was once mentioning this to a few people in my lab, and pointed to a fan and said "this wouldn't be called a fan but an 'air recirculating device' or 'ARD' " to make it sound official and thus more important (and then justify being more expensive!).

jacobsonbob - I believe your guess would be the answer... you see, it's easy!
I saw the name and said huh? But like you, I just figured it was used to ID the uncle and.. being from Louisiana... for all we know his name was Ichabod!
There are also acronyms sometimes used that I am not familiar with. Some I can figure it out from the context, some I can look it up, other ones... don't know what it is, but it didn't seem to be important to the question at hand or the answer needed! If it is, ask - someone will give us a hint or tell us!

Disgustedtoo, your right Medicaid will go back, 5 yrs. like I said the claw back law. They will seek renbustments. And the law allows it. Most people don’t understand Medicare does not pay for nursing homes, it’s Medicaid that does, and most people don’t understand you can’t own anything, or even have a bank account, they even count the years by your w2 ‘s to see  when  you started giving your assets away. So you have a fine line to walk. That’s why you have to get an attorney. They specialize in this. But like I said social security works. Com can answer a lot of questions it’s a great web site.

Attorney-time! Definitely Attorney time!

Or, perhaps you can call your accountant for advice - sometimes you just have to show papers - like Probate or something similar.

But definitely call an expert. This is not the time to post here - this is the time to find someone truly competent in these matters. You can even call Medicaid for advice and ask them what they need to prove you haven't stolen anything from them.

Just curious--How does anyone know from the information given that the uncle's name is "Boudreaux"? Or was this just chosen instead of "John Doe", particularly as the question came from Louisiana? (I'm still learning about the "mechanics" of this forum!)

1. That family lawyer probably has not a clue about Medicaid and the rules involved. Do not listen to him, consult with an attorney that KNOWS the rules!
2. Based on the dates you provided (mostly just the year) it sounds like perhaps uncle filed for and got Medicaid before the aunt's death,in which case Medicaid would not know about the house/ownership. It also takes time for wills to process through probate, so again, delay.

As others have noted, Medicaid is really not well-funded and will seek any reimbursement it can get, and this is just. Since you say the will left the house to uncle, but he "gave" it to your husband, as others said this is considered "gifting" and that is not allowed - there is a 5 year look-back initially for any gifting, and that can delay or negate Medicaid funds. In this case it sounds like the "gifting" slipped through the cracks because uncle was already in the system, however they can do this look-back AND require the funds be paid back. Any assets (there are rules for current spouses so as not to leave them destitute) are to be used BEFORE Medicaid pays their share. In the case of a house with no living spouse, if they know about it typically they will put a lien on it and recover the funds when it is sold.

As comments suggest - find a well-versed attorney!!

Consult a Medicaid/Elder Care attorney in your state asap, as each state has its own laws about recovery. In some states, property is a non-countable asset, BUT the house might have had to be transferred to an irrevocable trust prior to the sale, rather than gifted to your husband outright.

Dear Lisa Ann look up the claw back rule, concerning Medicare. First, it was put into law many years ago. Second go to a web site called social security works. com. It can help with many of these questions. It’s a great web site. Your name might have been placed in a contact list when your uncle was put into nursing home, don’t ignore that letter

LisaB, I was writing my tome (lol) as you posted...... ok by your updated post the house was as per Auntie will 100% to Uncle Boudreaux. He refused the house. So house to hubs. The problem likely is he could not decline the asset as far a Medicaid compliance is concerned. Declining an asset = Gifting of asset as far a Medicaid concerned. 

By his application for Medicaid, state has ability to place lien on assets. How it’s done depends on state laws for property rights. By however done upon death lien becomes a claim against the estate. The amount would be for whatever State of LA has a the Medicaid tally for uncle but based on % ownership of asset. So if $110k medicaid total, & if hubs owned 50% share, it’s $55k. With Interest too, 

By the state having lien placement ability, the property - In theory- cannot be sold with clear title. But if will / transfer / sale / medicaid application all together with short time frame, something fell though a crack. But property details eventually will surface. State, I’d bet, is viewing house as Uncle Boudreaux’s with the sale hubs did as totally invalid transfer as lien was not cleared and that property still owned by Uncle as that is what will stated.

Please tell me it was sold via Warranty Deed & with title insurance....

I hope there was a probate atty involved in all this & they have insurance. MERP is nothing new. Probate attys know about Recovery.

This type of ? has come up on this site before. Usually it’s that a maiden Auntie or batchelor Brother has died. And within their will have left $ or assets to their now living in a NH and on Medicaid elderly sibling. The now on Medicaid sibling cannot refuse the value of the asset as it’s legally their asset so if they decline their giving / gifting it away to whomever is next on the estates distribution list. Gifting not allowed by Medicaid. How to deal with it & be compliant for Medicaid is complicated but can be done if before distribution if planned imo.

But for you all, it’s way way after the fact. I’m sticking with you need to find your own experienced with MERP atty to deal with this. Hopefully they can get it settled with you & hubs “hold harmless” agreement & equitably for all (including whomever bought house). Good luck and let us know what happens. We all learn from each other.

Rovana & VegasLady are on the right track as to why you’re being contacted.

Hubs Uncle does have an Estate. By Uncle Boudreaux’s dying it creates an “estate of”. Estate could have zero assets, so nothing happens.  For hubs, Aunts Estate should have gone through a legal process to distribute her assets. How her will reads is very important and distribution needed to follow her valid will and dealt with in probate or surviving spouse affidavit. His ownership % of the assets after death will be very important. Something did not happen correctly for her estate OR the records state or its Medicaid contractor is looking at are not complete. You need to find out what the issue is as it’s not going to just vaporize. 

The letter you’ve gotten is it from LA DeptHHS or from HMS?

Is it a NOI (notice of intent) or collection letter? I kinda doubt it’s an NOI as just too much time has lapsed since transfer or death. But if so, NOI must be responded to & there will be a tight timeframe for this. If purely a collection letter, then someone was sent NOI & the followup MERP Letters in the past and ignored it, so debt is considered valid. Who would have gotten the NOI? What has likely happened is State or its outside contractor has assigned debt to hubs & as it’s a community property state, to you! 

- So, is it actually to you - not just sent to you like “attention or C/O Jane Guidry Boudreaux”? Reread the letter very carefully. Was it sent to you but actually the notice is to the estate of hubs uncle Boudreaux, so your just a c/o?
It makes a difference but whichever it is, still has to be dealt with. That “family lawyer” who told you to ignore it is flat out wrong..... perchance did this very same ”family lawyer” deal with Uncles property “donation” in 2014? If so, & knew Medicaid was involved, very bad advice given & that’s another issue...

-So back in 2014, who did Uncle Boudreaux’s Medicaid application?
-Whose name did state of LA Medicaid have on file for contact for Uncle?
-Who did Uncle Boudreauxs Medicaid renewals? 
-Who got NOI?
-Property “donation” LOL - it’s gifting of an asset no matter what it’s called - so what’s the backstory...... who was Uncle Boudreauxs DPOA? Again was the “family atty” involved? Who signed off paperwork on gifting of house? Who filed documents at courthouse? Was it hubs? So he gifted to himself? Then did Hubs sell house FMV via Realtor with MLS listing & title insurance by buyers OR did hubs do sale within family/friend type of special sale so pretty casual paperwork? Was it done via Warranty Deed or QCD?  All are details mucho importante.
-Sale $$$ went where?

State of LA is terrible financially due to the Jindal years. (I’m in NOLA & mil was on Medicaid, Medicaid in LA is slow but reviews deep). State must look for $ from all sources. Outside contractor if at that point will act like traditional debt collectors. 

No matter how you spin this......The facts are that actions inappropriate were done with Uncle Boudreaux assets under the terms of State of Louisiana Medicaid compliance rules. State views that Uncle Boudreaux had his full or partial share owned house -an asset - gifted and all done within the same year 2014 that Medicaid applied for. Louisiana medicaid application is pretty clear on asset disposition and MERP. State can affix responsibility onto others and has more than likely been slogging along this process since 2015 renewal review. Now state has found you -as wife- to possibly be responsible for debt. This stuff snowballs as once it’s going, the state can attach tax refund, APS asked to do “vulnerable adult” review, etc. Honey, my suggestion is that you asap after Mardi Gras meet with an atty that specializes in Medicaid and probably a firm that has guys that actually do litigation. Sher Cahill in NOLA does speciality estate, Medicaid & Medicare work, they are a top notch firm imo. I’m sure there’s others in the state.

Also have ❤️ to 💜 with hubs as to what exactly done. Trust but verify. Good luck.

This is a sticky situation.  The house was only Uncles to live in until his death reverting to your husband.  You need to get a copy of the will and see how it is worded.  The wording may determine that the Uncle never owned it was just being allowed to live there.  It may have been ur husbands all along.  If so, its your husbands.  So u owe nothing to Medicaid.  Or, might be determined that both were owners then they can only recover half.  I would get a copy of the deed making sure Aunt was the only owner.  And tax records to see if just her name on them.  Did Uncle keep up taxes and utilities?  If not, need proof they were paid at time of sale.  You really need a Medicaid lawyer for this.  

Thank ya'll, guess I could've included more information. My husband was in the will from his aunt (husband kin by blood to aunt)and uncle, she died first then because the uncle had been separated from her for over 25 years he said it was best to just to give to my husband. The will stated it went to uncle first then my husband. We really didn't know anything about the uncle or his life circumstances.

Medicaid will go after funds that were "gifted" that should have been used for an elder's care - they will expect to be repaid the value of the house - since that could have been used for uncle's care.

your husband in good faith did not know that Medicaid was involved - but that does not matter for MERP recovery.

Louisiana is a community property state. The gift of the house to your husband was his separate property until it was sold and the funds put into a joint account with you (if that is what happened). The comingling of the previously separate property turned it into community proprty. That may be why you are being contacted. Whether or not you or your husband have any liability to pay anything back is doubtful. I'd be sure that the lawyer consulted is well versed in MERP, Medicaid Estate Recovery Program, issues before you decide to ignore the letter.

I would see an elder law/medicaid attorney. The way I understand it, look back effects qualification not recovery. So what should have happened was your uncle should have had a disqualification period based on the value of the house. They shouldn't try to recover from assets that aren't your uncle's after the fact. Recovery is a claim against the person who was on medicaid's estate. Not on their relatives. That's the way I understand it. But I can be completely wrong. A medicaid attorney that practices in your state should know.