Nevada's Medicaid Estate Recovery Program

If you live in Nevada and you've received Medicaid to pay for certain long-term care expenses, Nevada's Medicaid program will attempt to recover some costs from your estate when you die. In fact, you had to agree to the terms of Nevada's Medicaid Estate Recovery (MER) program when you applied for Medicaid benefits.

After a Medicaid recipient passes away, Nevada's MER program will locate and claim at least some of the recipient's assets to repay some of the Medicaid benefits the state paid out for that person. These recovered funds are intended to help future recipients and maintain the sustainability of the state's Medicaid program.

When you're approved for Medicaid, the state of Nevada will send you information about the estate recovery program. Understanding the basics of the program and letting family members know what to expect will help avoid unpleasant surprises after your death.

When Will Nevada Seek Reimbursement From My Estate?

The assets you own when you die make up your "estate." (Nev. Rev. Stat. § 422.054) Nevada's Medicaid Recovery program will seek reimbursement from your estate if any of the following are true:

• You received Medicaid assistance after the age of 55.
• You were under 55 and an inpatient in a nursing facility, intermediate care facility for individuals with intellectual disabilities, or another type of medical institution when you received Medicaid assistance. (Nev. Rev. Stat. § 422.29302)
• You were the beneficiary of a special needs trust while you received Medicaid assistance (at any age). A special needs trust holds your assets while you receive Medicaid or Supplemental Security Income (SSI) disability benefits to preserve eligibility for government assistance. Whether the estate recovery program will try to recover from the trust depends on the type of trust.

Under federal law, the state can't seek recovery if certain exclusions exist. If you're survived by one of the following dependents, Nevada's MER program won't try to recover its costs from your estate:

• your spouse
• your child under 21 years of age, or
• your child who is blind or disabled (as defined by Section 1614 of the Social Security Act).

In addition, certain income, property, and resources of Native Americans or Alaska Natives are exempt from being taken by the estate recovery program. (42 U.S.C. § 1396p(b)(3)(B).)

Which Medicaid Expenses Must My Estate Repay?

Nevada's estate recovery program seeks reimbursement for all Medicaid services, whether or not they're related to long-term care, that you received after turning age 55, as well as long-term care costs that you received before you turned 55. The MER program can only attempt to recover the smaller of the following:

• the amount of Medicaid benefits correctly paid on your behalf, or
• the determined value of your estate.

Under the Affordable Care Act, Medicaid agencies can't seek recovery for Medicare cost-sharing payments paid on behalf of people who are eligible for a Medicare Savings Program.

What Assets Will Nevada Go After for Medicaid Recovery?

Nevada's Medicaid Estate Recovery Program can go after many assets, including a Medicaid recipient's:

• home
• land
• bank accounts
• vehicles
• cash
• household goods, and
• other assets.

Repayment is made from the property and other assets you owned immediately prior to death. That can include assets that transfer to someone else by way of:

• joint tenancy
• reserved life estate
• survivorship
• trust, or
• annuity.

Your family members will never have to repay Medicaid from their own pockets for the benefits you received.

Can the State Take My House During My Life?

No. In Nevada, Medicaid Estate Recovery can only seek a property lien before you pass away if you say that you no longer intend to return to your home. (A lien is a legal claim against a piece of property that ensures a creditor—in this case, Medicaid—eventually gets paid.)

Only after you pass away will Nevada's Medicaid Estate Recovery program file a claim against your estate—for the full value of Medicaid benefits paid on your behalf. Then, when your house is sold or transferred (such as through probate), Medicaid will seek to collect what you owe. (Nev. Rev. Stat. § 422.29306.)

The state can place a lien on your house even if someone else is living in it. But federal law prohibits recovery on the lien if certain close relatives are living in the home, including:

• your spouse
• your child under 21
• your permanently disabled or blind adult child, or
• a sibling with an ownership interest in the home who lived there for at least a year before you entered the care facility.

If any of these relatives are living in your home when you die, Medicaid will ask them to sign a voluntary lien. Medicaid will remove the lien if they decide to sell or refinance the home. That means they won't need to repay the lien. (42 U.S.C. §1396p(2).) But if they still have ownership of the house when they die, the state will attempt to collect on the lien.

Could My Estate Be Exempt From Nevada's Medicaid Estate Recovery Program?

In Nevada, no one is completely exempt from Medicaid estate recovery. In some cases, such as when you're survived by a spouse or minor or disabled child, recovery can be delayed. Medicaid reimbursement can become complicated when delayed recovery is involved, especially if the children are very young or a disabled child is likely to live for a long time.

If one of these situations applies to you and you have questions, contact Nevada's Medicaid office at the Division of Welfare and Supportive Services.

Does My Estate Have to Repay Medicaid If It Would Cause Hardship for My Family?

Nevada sometimes waives enforcement of an estate recovery claim when a relative or another inheritor of the estate is able to show, through convincing evidence, that recovery subjects them to undue hardship.

Medicaid must inform the person in charge of your estate that your inheritors can apply for a hardship waiver under the conditions above. The inheritors then have 30 days to apply for a waiver. If the application is approved, that inheritor's portion of the repayment might be forgiven or modified. (Nev. Rev. Stat. § 422.29302(5).)

In addition to the above-discussed exceptions regarding recovery on a home, in determining whether undue hardship exists, Nevada considers the following circumstances.

• The asset to be recovered is the sole income-producing asset of the person requesting the waiver.
• The recovery of the assets would result in the person becoming eligible for governmental public assistance or medical assistance programs (Medicaid) based on need.
• A doctor verifies in writing that the person requesting the waiver has a medical condition that compromises their ability to repay the Medicaid claim.

The following factors are also considered when making a decision to temporarily waive, modify, or compromise on estate recovery:

• the gross annual income, property, and other assets of the person applying for the waiver (and of their immediate family), and
• the type and level of care provided by the person seeking a waiver to the deceased Medicaid recipient, and the extent to which that care delayed or prevented the recipient from being institutionalized.

There's no hardship waiver provided when the state MER program places a lien against the real property of a Medicaid recipient who's passed away (but the lien is subject to the rules discussed above).

What Should Relatives Do After a Medicaid Recipient's Death?

The person in charge of wrapping up your estate must contact the Nevada Medicaid agency within 30 days of your death.

To make the process easier, you might want to give the person you expect to handle your final affairs a copy of the notice you receive from Medicaid when your benefits begin. (Remember, federal law requires Nevada to provide you with a notice explaining the estate recovery program. You sign this when you apply for Nevada Medicaid benefits.)

The notice will help your representative understand how the program works. Otherwise, your representative can contact the Medicaid office using the information below.

The person in charge of your estate shouldn't distribute money or other assets from your estate to your heirs until any required repayments to Medicaid have been made. A representative who does so and later finds that there aren't enough assets left to pay back Medicaid might be personally responsible for the bill.

However, the state will collect reimbursement only after expenses for probate attorneys, estate administration, federal taxes, and certain allowed funeral expenses have been paid.

Where Can I Learn More About Medicaid Estate Recovery in Nevada?

You can get more information about Medicaid estate recovery in Nevada or contact someone at the state's MER program office by:

• visiting the Department of Health and Human Services, Division of Health Care Financing and Policy (DHCFP) website
• calling (775) 687-8416 or (800) 992-0900, or
• sending an email to mer@dhcfp.nv.gov.

Learn more about Nevada's Medicaid Estate Recovery program in Chapter 800, "Cost Saving Programs," of the state's Medicaid Operations Manual (MOM).