Medicaid Estate Recovery in Texas

“Estate recovery” refers to an authority and process by which the Medicaid program seeks to recover from the estates of deceased Medicaid recipients the costs of certain long-term care (“LTC”) services paid by Medicaid after age 55.  Estate recovery has existed since the inception of the Medicaid program in 1965.  Prior to 1993, however, it was a state option.  But the federal Omnibus Budget Reconciliation Act of 1993 (“OBRA 1993") made estate recovery mandatory nationwide.  Even so, some states, including Texas, ignored the federal mandate for many years.

BACKGROUND INFORMATION

Texas has had a love-hate relationship with estate recovery dating back to before OBRA 1993.  In 1987, the Texas Legislature enacted an estate recovery law.  It empowered the Texas Department of Human Services (“TDHS”), then the Medicaid agency in Texas, to place liens against the homes of deceased individuals who had received Medicaid in a nursing home.  Public outcry against this statute caused then-Governor Bill Clements to enjoin TDHS from enforcing it until such time as the Legislature could review it.  Senate Bill 1 in the 1989 Legislative session repealed the statute.  One Legislator lost his seat owing to his role in the genesis of this ill-fated law.

Because of the political fallout from the 1987 fiasco, Texas politicians were “gun shy” about estate recovery for many years.  Long after estate recovery was mandated by OBRA 1993, Texas lawmakers declined to enact an enabling statute that would permit its implementation in Texas.  Indeed, the political climate was so opposed to estate recovery that TDHS officials were instructed to respond to inquiries about it with a terse - “What’s that?”

THE TEXAS ESTATE RECOVERY STATUTE

The political climate in Texas changed in 2003.  In June 2003, the Legislature enacted an estate recovery enabling statute.  Although the law was effective September 1, 2003, it took the Health and Human Services Commission (“HHSC”), the current Medicaid agency in Texas, until March 1, 2005, to promulgate rules and to implement the Medicaid Estate Recovery Program (“MERP”).  Estate recovery applies to persons whose initial application for LTC services is filed on or after March 1, 2005, and who were at least 55 years old at the time such services were received.  To date, the MERP has not adopted many of the more restrictive provisions available as a state option under OBRA 1993.

SERVICES SUBJECT TO RECOVERY CLAIMS

The MERP may recover for nursing home services, services in an intermediate care facility for the mentally retarded (“ICF-MR” facility), and for home and community-based services (including attendant care).   The MERP does not have lien authority, but it may file a Class 7 claim against the decedent’s estate with the probate court.

WHAT ELDER LAW ATTORNEYS CAN DO

Without the intervention of an elder law attorney, estate recovery can be a frightening prospect.

The attorney can work with you in arranging your assets so as to help avoid estate recovery at the time of your demise.

Wright Abshire. Attorneys, is available to assist with you with estate recovery Medicaid planning, durable powers of attorney, advance medical directives, wills, and probate.