Is there a statute of limitations in estate recovery matters? How long does the Commonwealth of Pennsylvania’s Department of Human Services have to enforce its right to the Medicaid payback under the estate recovery program? The short answer is that there does not appear to be an applicable statute of limitations, and there is no Pennsylvania case law enforcing a time limit.
Although there is no statute of limitations, Pennsylvania’s estate recovery statute does set forth a time period in which the state must respond to a request for a statement of claim submitted by the duly appointed personal representative of an estate. For purposes of this article, I will refer to this person as “the executor.” If the PA Department of Human Services does not provide their statement of claim within 45 days after receiving the executor’s request, then the estate recovery claim is forfeited by the Department and does not need to be paid by the estate. Instances of the state missing this deadline and forfeiting their estate recovery claim are not common, but they have happened.
The Department’s duty to provide a statement of claim is only triggered once the estate’s executor takes the affirmative step of requesting it. Specific information specified in the regulations must be included in the request for a statement of claim, and the request must be sent to the correct address. A defective request for a statement of claim will not start the 45-day response period.
Sometimes the estate recovery program has additional time to add to their statement of claim. The estate recovery regulations provide that “if there is new or updated information” then the Department may amend its claim after the 45-day response period. Occasionally medical providers submit their requests for payment after the recipient’s date of death, and after the initial statement of claim has been provided to the executor. Generally speaking, medical providers such as nursing homes or in-home caregiving companies must submit their claim for payment within 180 days of providing services. The ability of the state to amend its estate recovery claim after the response period should only occur if there is new or updated information.
Some estates remain unadministered for many years. Where there has been no executor appointed there can be no proper request to the Estate Recovery Program for a statement of claim that starts the 45-day response period. In these cases, the state’s right to pursue the Medicaid payback quietly waits, with no statute of limitations. An executor may be appointed in the future to administer the estate, even years later, and when that day arrives, the estate recovery laws place the legal duty on the executor to request the statement of claim.
The PA Department of Human Services has no duty to contact the executor unless the executor initiates communications by way of proper request for a statement of claim that complies with applicable regulations – even if the executor properly advertises the estate which is required and a good practice in most estate administrations in Pennsylvania. Properly advertising the estate can cut off the claims of some creditors after a year, but not an estate recovery claim.
If the executor fails to request the statement of claim or fails to pay the claim to the extent of available assets, then the Commonwealth of Pennsylvania can pursue collection against the executor personally, even if years have gone by. This can be a major problem if the executor has made distributions to beneficiaries without having them sign refunding agreements, and where the beneficiaries have spent the money. In these cases, both the executor and beneficiaries (transferees) can be sued by the Commonwealth of Pennsylvania and held personally liable. This sometimes happens many years after distribution if the executor was unfamiliar with estate recovery rules or did not have legal counsel.
There is often not enough money to pay the estate recovery claim in full. Pennsylvania law sets forth the priority of who gets paid what when there are insufficient estate assets to pay all creditors. Sometimes the executor needs to file an account with the court to be sure there is no future liability for the executor.
Even if the personal representative files an account with the court and is discharged, the Department of Human Services is not necessarily bound by the court’s decree. According to the applicable regulations, a decree of distribution will discharge the liability of the personal representative to the Department of Human Services only when certain conditions are met. Specifically,
- the Department of Human Services must be served with a copy of the proposed decree of distribution at least 30 days in advance of court approval,
- the personal representative of the estate requested and obtained a statement of claim,
- the Department’s claim was presented to the court and paid, or the court records show that he estate lacked the assets to pay the claim, and
- the Department receives a copy of the final decree of distribution and is paid any amounts due. See 55 Pa. Code §258.8.
If the petition for distribution to the court fails to disclose the existence of property subject to the Department’s estate recovery claim, or if the personal representative refuses to present the Department’s claim to the court, then the personal representative of the estate is not discharged from liability, ever.
We received many legal traditions from English law. Among these old legal doctrines is one that dates back to when our country was part of the British colonies: the doctrine of “nullum tempus occurrit regi.” Also referred to as the doctrine of “nullus tempus,” it means that “no time runs against the king” and that under the doctrine, governments have no time limit to bring lawsuits for damages that would otherwise be barred by a statute of limitations. Some states have abolished the doctrine, but Pennsylvania’s Commonwealth court has invoked the doctrine as recently as 2016 in the case of Township of Salem v. Miller Penn Development, LLC. This doctrine appears to be alive and well in Pennsylvania. Absent the enactment of a new law, there is not a statute of limitations in estate recovery matters.
The doctrine of nullum tempus has been criticized because it can give rise to unjust results in certain cases. Existing estate recovery laws do provide a process for requesting a waiver of estate recovery in cases where there is undue hardship. Pursuing an undue hardship request may be an option in certain cases where many years have passed and the money is long gone.
Fortunately, in most cases the estate recovery program acknowledges receipt of the payment to the value of the estate, and will send a letter closing their file – unless there were undisclosed asset, in which case they can re-open their file at any time in the future, because there is no statute of limitations, and “time does not run against the king.”
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.