Estate Recovery: Will the Medicaid Estate Recovery Program Take My House?

The Medical Assistance (Medicaid) Estate Recovery Program seeks repayment of Medicaid benefits from the probate estates of certain deceased Medicaid recipients. Most paybacks under the estate recovery program come from the sale of the deceased recipient’s primary residence. We often receive phone calls in our office from people asking, “When are they going to take the house?” 

Let’s start by making clear that the Pennsylvania Department of Human Services does not exactly come and take the house. Procedurally, it is the legal duty of the estate’s executor or administrator to contact Pennsylvania’s Estate Recovery Program in order to request a statement of claim. Many times, they will send a letter to the next of kin of the deceased Medicaid recipient asking for information about the estate and real estate, but the process of selling the house and remitting payment is the job of the estate’s executor. 

Once Pennsylvania’s Estate Recovery Program knows an executor has been appointed to administer the estate, they essentially sit back and wait for the executor to sell the house and pay the claim. Executors are under a legal obligation to handle the estate within a reasonable time frame, and they owe a legal duty not just to beneficiaries, but to creditors of the estate. If the executor does not sell the real estate in a reasonable period of time, the Commonwealth of Pennsylvania can file paperwork with the court to remove and replace the executor, for cause shown. 

Normally, however, ongoing communications with Pennsylvania’s Department of Human Services’ Estate Recovery Program is all they want. Providing them with updates, particularly if they know the estate’s executor is represented by legal counsel, gives them a comfort level and they wait for the executor to sell the home. If there is an extended time with no communication, the claims investigator will contact the law firm representing the executor.

If there is an unusual delay or challenge in selling the real estate, explaining this to the estate recovery claims investigator goes a long way. A lack of communication will cause concern, particularly if the estate is unresponsive to their inquiries. Not communicating with the estate recovery can cause them to refer the case to their legal counsel, or to refer the matter to outside private counsel to pursue the estate recovery and force action on the case. 

If a case is unadministered, the Estate Recovery Program will refer the case out to a private attorney who will then take action to petition the Register of Wills to appoint an administrator. This outside administrator is usually an attorney who will then take actions to liquidate the property. There is no set time for the state to “take the house” through the estate recovery program, but we estimate it would take about 6 months to a year of neglecting the matter before the Commonwealth would take independent action. Communication is key.

Working with the Estate Recovery Program is the best policy. In most cases they will allow a reasonable fee to be paid to the family member who takes on the job of administering the estate. Also, in some cases, family members have advanced funds to pay property taxes to keep the house going while a loved one was in the nursing home, and the estate recovery regulations often permit reimbursement. 

Taking a proactive approach and addressing the Medicaid payback head-on is normally the best policy. Our office has worked with the estate recovery program for years, and I have taught continuing education courses for many years with the administrators and lawyers who represent the Estate Recovery Program. Depending on the facts and circumstances of your case, we may be able to resolve your estate recovery problem. 

Please give our office a call at (215) 885-6785 to schedule an appointment and we can discuss your options with respect to Medicaid estate recovery matters.

Disclaimer: We recommend that you have ongoing legal advice from an elder law attorney before attempting to navigate the Medicaid application process. If you have questions or wish to secure our services, please contact Gerhard & Gerhard, P.C.

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