San Antonio Express-News
February 3, 2004

Estate Recovery Hearing in SA on Feb 9

copyright 2004, Paul Premack

The next step is upon us. The Texas Health and Human Services Commission has released a framework for establishing estate recovery policy. It announced a series of public hearings, the first of which will be in San Antonio on Monday, February 9, 2004 from 4 to 7 pm, at the Texas Diabetes Institute Auditorium, 701 S. Zarzamora.

Other hearings will be held in Harlingen, Houston, Ft. Worth, Lubbock and El Paso. The times and places are posted on the HHSC website (link to them by clicking here).

Federal law requires states to develop programs to recover costs for Medicaid coverage in nursing homes, through community-based services, and for hospital and prescription drug services provided to patients 55 and older, upon the death of the patient. Texas resisted implementing such a program for ten years, until the 2003 legislative session.

Since then, a government workgroup has been studying the legal parameters of estate recovery. They note that all the states that already have recovery programs have implemented them in different manners. Federal law mandates a few important protections, and state law also limits how far the Texas estate recovery program can reach. HHSC will be adhering to these restrictions:

1. There will be no recovery effort if the patient leaves a surviving spouse, a child under the age of 21, a permanently disabled child or an unmarried child of any age living in the home;

2. There will be an "undue hardship" exemption;

3. There will be no estate recovery in situations where it would not be cost-effective; and

4. Any claims for recovery will take place through the probate process, with Medicaid claims taking a back seat to funeral expenses, secured claims, mortgages, child support, and taxes.

That framework leaves a lot to discuss. For instance, how will the state define "undue hardship?" (The proposal says that any real estate that is the family’s primary source of income – like a farm or ranch – may be exempt.) What criteria will be used to decide if a recovery will not be cost-effective? Will recovery be imposed on those currently covered by Medicaid, or just on new Medicaid recipients? Will any exemptions be allowed? (The proposal says the family will get to keep, from the sale of their particular home, half the average cost of a home in that county). How long must an unmarried adult child live in the home? (The proposal says for at least a year prior to the patient’s admission to the nursing home).

HHSC’s proposal includes the idea of hiring private firms to conduct the estate recovery process. The model that comes to mind is the collection of local property taxes by a law firm contracted through the government. The tax-collection firms are usually aggressive, being compensated based on amounts they collect. Do you want Medicaid to contract its estate recovery effort out to similar operations? You can express your opinion at the public hearing next Monday.