Medicaid Estate Recovery Program

The State of Texas and other states are often a creditor entitled to collect from the decedent’s estate.  This often involves claims for Medicaid payments made for in-home care or nursing home services paid for the decedent.  Each state has some process for this. In Texas, these claims are handled by the Texas Health & Human Services’ Medicaid Estate Recovery Program (“MERP”).

The following services and programs are affected by MERP:

  1. Nursing facility care (nursing homes)
  2. Intermediate Care Facility for Individuals with an Intellectual Disability or Related Condition (ICF/IID)
  3. The following Medicaid waiver programs:
    • Community Attendant Services (CAS)
    • Community Based Alternatives (CBA)
    • Community Living Assistance and Support Services (CLASS)
    • Consolidated Waiver Program (CWP)
    • Deaf-Blind with Multiple Disabilities (DBMD)
    • Home and Community-based Services (HCS)
    • Integrated Care Management (ICM)
    • STAR+PLUS (long-term care services)
    • Texas Home Living (TxHmL)

MERP also affects the costs of certain hospital and prescription drug services.  Primary Home Care (PHC) is not affected by MERP.

When the MERP May Seek Recovery

The MERP may seek recovery from the decedent’s estate if (1) Medicaid paid for the decedent’s nursing home care and (2) the decedent applied for benefits on or after March 1, 2015 and was 55 or older when the services were received.  

There are several circumstances in which Texas will not seek recovery, including the following:

  1. There is a surviving spouse.
  2. There is a surviving child under 21.
  3. There is a surviving child who is blind or permanently disabled.
  4. There is an unmarried adult child living fulltime in the decedent’s home for one year or more before the decedent’s death.
  5. The decedent’s estate is $10,000 or less.
  6. The Medicaid debt that can be recovered is $3,000 or less.
  7. The cost to sell the decedent’s property to pay the debt is more than the value of the debt.
  8. The recovery would result in undue hardship on the heirs.

Texas may also reduce the amount of the MERP claim if the decedent or someone else spends money to (1) maintain the decedent’s home while he is in a qualified home or (2) pay for care that helps the decedent live at home longer before entering a nursing home and those costs for such care provided on or after the decedent become eligible for Medicaid.

The state may allow deductions from an estate recovery claim for necessary and reasonable expenses, such as:

  1. Home maintenance costs, such as real estate taxes, utility bills, insurance, home repairs, and home maintenance expenses, such as lawn care for recipients receiving Medicaid-covered services in a nursing facility.
  2. The direct payment of the costs of care (including payment of personal attendant care) provided for a deceased Medicaid recipient that enabled the recipient to remain in his or her home and thereby delayed institutionalization.

Determining Whether Claim Has or Will be Filed

Since MERP may be one of the larger debts, care should be taken to confirm whether a claim has or will be filed.

To determine whether a MERP claim has or will be filed:

  1. Determine whether the rules above apply, i.e., the decedent applied for benefits on or after March 1, 2015 and was 55 or older when the services were received and none of the exceptions apply.
  2. Submit the MERP form to obtain certification about the status of the MERP claim.

Within 30 days after notification of the decedent’s death, MERP will provide the representative written notice of its intent to file a claim.  

The estate can then file a request for a hardship waiver.  There are several circumstances for granting a hardship waiver, such as where:

  1. The estate property was a family business, farm, or ranch for at least twelve months before the decedent dies, and is the main source of income for the heirs.
  2. The heirs would need financial help from the government if the state filed a MERP claim to get money back.
  3. The heirs could stop getting financial help from the government if Texas did not file a MERP claim.
  4. The decedent received services because he or she was a crime victim.
  5. There are other circumstances that may create a hardship.  One type of hardship applies just to the home. If the value of the homestead is under $100,000, and if one or more of the heirs have family income under a certain amount, Texas may not ask for money back. In 2017, this income limit for one person is $36,180. For a family of two, it is $48,720. These figures are adjusted each year.

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