130 CMR, § 515.011

Current through Register 1533, October 25, 2024

Section 515.011 - Estate Recovery

(A)Introduction.

(1) The MassHealth agency will recover the amount of payment for medical benefits correctly paid from the estate of a deceased member. Recovery is limited to payment for all services provided

(a) while the member was 65 years of age or older, except on or after October 1, 1993, while the member was 55 years of age or older; and

(b) on or after March 22, 1991, while the member, regardless of age, was institutionalized, and the MassHealth agency determined that the member could not reasonably be expected to return home.

(c) Effective for dates of death on or after December 31, 2016, MassHealth will offset the estate recovery claim by the total of any premiums paid to the MassHealth agency on behalf of the member when the member was 55 years of age or older.

(2) The estate includes all real and personal property and other assets in the member's probate estate.

(3) Notwithstanding 130 CMR 515.011(A)(1) and in accordance with 42 U.S.C. 1396p(b)(B), the MassHealth agency will not recover Medicare cost-sharing benefits described at 42 U.S.C. 1396(a)(10)(E) with dates of payment on or after January 1, 2010, for persons who received such benefits under 130 CMR 505.002: MassHealth Standard, 505.007: MassHealth Senior Buy-in and Buy-in, 130 CMR 519.010: MassHealth Senior Buy-in (Qualified Medicare Beneficiaries/OMB), and 130 CMR 519.011: MassHealth Buy-in.

(a) The date of payment for Medicare cost-sharing deductibles, coinsurance, and copayments is the date the MassHealth agency received the claim.

(b) The date of payment for premium payments is the date the MassHealth agency paid the premium.

(B)Exceptions.

(1)Long-term-care Insurance Exception. No recovery for nursing facility or other long-term-care services may be made from the estate of any person who meets the following requirements.

(a) The member was institutionalized; and

(b) The member notified the MassHealth agency that he or she had no intent of returning home; and

(c) On the date of admission to the long-term-care institution, the member had long-term-care insurance that, when purchased, or at any time thereafter, met the requirements of 130 CMR 515.014 and the Division of Insurance regulations at 211 CMR 65.09(1)(e)(2).

(2)Cost Effectiveness Exception. Effective for dates of death on or after May 14, 2021, in probate estates of members where the probate petition certifies under the penalties of perjury that the total assets in a member's estate are valued at $25,000 or less, MassHealth has determined that it is not cost effective to pursue recovery. In such estates, MassHealth waives its right to recovery, and will not file a claim or otherwise pursue recovery. MassHealth reserves the right to file a claim and recover in such estates if probate filings do not sufficiently identify the value of the estate or if later probate filings or proceedings or investigation identify or establish that the total assets in the estate exceed $25,000.00.

(C)Deferral of Estate Recovery. Recovery will not be required until after the death of a surviving spouse, if any, or while there is a surviving child who is younger than 21 years old, or a child of any age who is blind or permanently and totally disabled.

(D)Waiver of Estate Recovery Due to Undue Hardship. The MassHealth agency will waive its estate recovery claim if the agency determines that satisfaction of the claim would cause an undue hardship. An undue hardship does not exist solely because recovery will prevent any heir from receiving an anticipated inheritance. The duly court-appointed personal representative or public administrator of the deceased member's probate estate may apply for a waiver of estate recovery due to undue hardship. The application for a waiver and supporting documents must be received by the MassHealth agency within 60 days of the agency's notice of claim. The types of Waivers of Estate Recovery Due to Undue Hardship are:

(1)Waiver of Estate Recovery Due to Residence and Financial Hardship.

(a) For notice of claims presented on or after November 15, 2003, but before May 14, 2021, recovery will be waived if MassHealth determines all of the following conditions have been met.

1. a sale of real property would be required to satisfy a claim against the member's probate estate; and

2. an individual who was using the property as a principal place of residence on the date of the member's death meets all of the following conditions:

a. the individual lived in the property on a continual basis for two years prior to the member's admission to an institution or death and continues to live in the property at the time the MassHealth agency first presented its claim for recovery against the deceased member's estate;

b. the individual has inherited or received an interest in the property from the deceased member's estate as defined in 130 CMR 501.013(A)(2) and 515.011(A)(2);

c. the individual is not being forced to sell the property by other devisees or heirs at law; and

d. at the time the MassHealth agency first presented its claim for recovery against the deceased member's estate, the gross annual income of the individual's family group was less than or equal to 133% of the applicable federal-poverty-level income standard for the appropriate family size.

3. The waiver will be conditional for a period of two years from the date the MassHealth agency mails notice that the waiver requirements have been met, or from the date that a court of competent jurisdiction determines that the waiver requirements have been met. If at the end of that period, all circumstances and conditions that must exist for the MassHealth agency to waive recovery still exist, including meeting the same income standards under 130 CMR 515.011(D)(1)(a)2.(d), and the real property has not been sold or transferred, the waiver will become permanent and binding. If at any time during the two-year period, the circumstances and conditions for the waiver no longer exist, including meeting the same income standards under 130 CMR 515.011(D)(1)(a)2.d., the property is sold or transferred, or the individual does not use the property as their primary residence, the MassHealth agency will be notified and its claim may be payable in full.

(b) For claims presented on or after May 14, 2021, and upon application of a waiver of estate recovery due to residence and undue hardship by the personal representative or public administrator of the estate, MassHealth will waive recovery without a conditional two-year waiting period provided the personal representative or public administrator establishes to the satisfaction of the MassHealth agency that all the criteria for a residence and undue hardship waiver in 130 CMR 515.011(D)(1)(a)1. and 2. are currently met.

(c) Any waivers arising out of notice of claims presented before May 14, 2021, which did not become permanent and binding pursuant to the two-year conditional requirements set forth in 130 CMR 515.011(D)(1)(a)3., and which had not been satisfied and were still subject to the two-year conditional requirements of 130 CMR 515.011(D)(1)(a)3. as of May 14, 2021, will become permanent and binding.

(2)Waiver of Estate Recovery Based on Care Provided. For claims presented on or after May 14, 2021, for an heir or devisee inheriting a legal interest in the deceased member's home, the MassHealth agency will waive estate recovery if MassHealth determines to its satisfaction all of the following conditions have been met.

(a) the heir or devisee resided in the member's home on a continual basis for two years prior to member's admission to an institution or death;

(b) during that time, the member needed and the heir or devisee provided a level of care that avoided the member's admission to a facility;

(c) the heir or devisee continues to live in the property at the time the notice of claim is filed;

(d) the heir or devisee was left an interest in the home under the member's will, or inherited the property under the laws of intestacy;

(e) the heir is not being forced to sell the property by other devisees or heirs; and

(f) the property would have to be sold to satisfy the claim.

(3)Waiver of Estate Recovery Due to Financial Hardship Based on Income.

(a) For claims presented on or after May 14, 2021, the personal representative or public administrator of a member's estate may apply for a waiver of estate recovery due to financial hardship based on the income of an heir or heirs or devisee or devisees. If there are multiple heirs or devisees, the personal representative or public administrator must apply for an Income-based waiver separately on behalf of each individual. To be considered a qualifying heir or devisee, the personal representative or public administrator of the estate must establish:

1. the qualifying heir or devisee is inheriting an interest in the member's estate under the member's probate estate; and,

2. the family group of a qualifying heir or devisee has a Gross Income below 400% of the federal poverty level for the two-year period prior to the date the notice of claim is filed. If MassHealth determines that both conditions have been met, the heir is considered a qualifying heir.

(b) MassHealth will waive recovery in an amount equal to the value of the qualifying heir's or devisee's interest in the estate up to a maximum of $50,000 per qualifying heir or devisee. If there is more than one qualifying heir or devisee in an estate, the total amount of the agency's estate recovery claim waived for qualifying heirs or devisees shall be limited to a total of $100,000.

(c) An estate with qualifying heirs or devisees, regardless of whether or not there are non-qualifying heirs, will be subject to estate recovery based on the lesser of:

1. the value of the estate remaining after deducting the amount waived from the total value of the estate for qualifying heirs and devisees; or

2. the amount of the MassHealth claim remaining after deducting the amount waived from the total value of the MassHealth claim.

(d)Example 1. The value of the estate is $400,000 and the MassHealth claim is $60,000. There are two heirs who qualify for the waiver, each with an interest in the estate of $50,000 or greater. There are also two heirs who do not qualify. In this example, the waived amount is $100,000 (50,000 + 50,000). After deducting the $100,000 waived amount from the estate there is $300,000 left in the estate, but after deducting the $100,000 waived amount from the $60,000 MassHealth claim there is nothing left in the MassHealth claim. The result is no estate recovery.

(e)Example 2. The value of the estate is $350,000 and the MassHealth claim is $500,000. There are two qualifying heirs, each with an interest in the estate of $50,000 or greater. There are also two non-qualifying heirs. In this example, the waived amount is $100,000 (50,000 + 50,000). After deducting the $100,000 waived amount from the estate there is $250,000 left in the estate, and after deducting the $100,000 waived amount from the $500,000 MassHealth claim there is $400,000 remaining in the MassHealth claim. In this example, MassHealth would recover $250,000, since it is less than $400,000.

(E)Outstanding Claims.

(1) For claims presented between April 1, 1995, and November 15, 2003, that are still outstanding, recovery will be waived if all requirements under the then-existing MassHealth regulations were met.

(2) For claims presented before April 1, 1995, a waiver for hardship did not exist.

(F)Fair-market Value and Equity Value. If there will be insufficient proceeds from the sale or transfer of the property to satisfy the MassHealth agency's claim in full from a property on which MassHealth has recorded a lien, the fair-market value and equity value of all real property that is part of the deceased member's probate estate must be verified prior to the sale or transfer of said property.

(1) The personal representative or public administrator of the probate estate must verify the fair-market value by sending to the MassHealth agency a copy of the most recent tax bill or the property tax assessment that was most recently issued by the taxing jurisdiction, provided that this assessment is not one of the following:

(a) a special-purpose tax assessment;

(b) based on a fixed-rate-per-acre method; or

(c) based on an assessment ratio or providing only a range.

(2) The personal representative or public administrator of the probate estate must also provide a comparable market analysis or a written appraisal of the property value from a knowledgeable source. A knowledgeable source includes one of the following: a licensed real-estate agent or broker, a real-estate appraiser, or an official of a bank, savings and loan association, or similar lending organization. The knowledgeable source must not have any real or apparent conflict-of-interest relationship with the estate.

(3) The MassHealth agency may also obtain an assessment from a knowledgeable source.

(G)Exemption of Certain Assets from Estate Recovery for American Indians and Alaska Natives.

(1) For notice of claims presented on or after July 1, 2009, and upon application for exemption of certain assets from estate recovery by the personal representative or public administrator of the member's estate, recovery from the following American Indian and Alaska Natives income, resources, and property will be waived:

(a) certain income and resources (such as interests in and income derived from tribal land and other resources currently held in trust status and judgment funds from the Indian Claims Commission and the U.S. Claims Court) that are exempt from Medicaid estate recovery by other laws and regulations;

(b) ownership interest in trust and non-trust property, including real property and improvements

1. located on a reservation (any federally recognized Indian tribe's reservation, pueblo, or colony, including former reservations in Oklahoma, Alaska Native regions established by the Alaska Native Claims Settlement Act at 43 U.S.C. chapter 33, and Indian allotments) or near a reservation as designated and approved by the Bureau of Indian Affairs of the U.S. Department of the Interior; or

2. for any federally recognized tribe not described in 130 CMR 515.011(G)(1)(b)1., located within the most recent boundaries of a prior federal reservation;

(c) income left as a remainder in an estate derived from property protected in 130 CMR 515.011(G)(1)(b), that was either collected by an Indian or by a tribe or tribal organization and distributed to Indians, as long as the individual can clearly trace it as coming from protected property;

(d) ownership interests left as a remainder in an estate in rents, leases, royalties, or usage rights related to natural resources, including extraction of natural resources or harvesting of timber, other plants and plant products, animals, fish, or fish products, resulting from the exercise of federally protected rights and income either collected by an Indian or by a tribe or tribal organization and distributed to Indians derived from these sources as long as the individual can clearly trace it as coming from protected sources; or

(e) ownership interests in or usage rights to items not covered by 130 CMR 515.011(G)(1)(a) through (d) that have unique religious, spiritual, traditional, or cultural significance or rights that support subsistence or a traditional life style according to applicable tribal law or custom.

(2) Protection of non-trust property described in 130 CMR 515.011(G)(1) is limited to circumstances when it passes from an Indian, as defined in the Indian Health Care Improvement Act at 25 U.S.C. c. 18, § 4 to one or more relatives (by blood, adoption, or marriage), including Indians not enrolled as members of a tribe and non-Indians, such as spouses or stepchildren, that their culture would nevertheless protect as family members, to a tribe or tribal organization, or to one or more Indians.