Families are sometimes surprised to learn during probate that the Rhode Island Executive Office of Health and Human Services, commonly referred to as EOHHS, may seek reimbursement for Medicaid benefits paid during the decedent's lifetime.
A Medicaid estate-recovery claim can significantly affect what ultimately remains for beneficiaries.
What is Medicaid estate recovery?
Rhode Island's current Medicaid estate-recovery rules apply in specified circumstances to probate assets of Medicaid recipients. The regulations address recovery from the probate estate of certain recipients who received Medicaid benefits at age 55 or older.
That distinction matters. The existence of an EOHHS claim does not mean that every asset associated with the deceased person is automatically available for recovery.
EOHHS notice is part of probate administration
For estates subject to the rule, EOHHS must receive required notice so that the agency can determine whether recoverable benefits were provided. EOHHS may then file a claim against the probate estate.
A large claim can change the entire estate
In practice, an EOHHS claim can transform what initially appears to be a relatively simple estate.
A family may begin with the expectation that the decedent's home will be sold and the balance divided among the children. If EOHHS files a substantial claim, the analysis instead becomes: What property is actually part of the probate estate? What is the amount and basis of the claim? What other obligations have priority? What expenses have properly been incurred? Is a hardship provision potentially applicable? What amount, if anything, will remain for beneficiaries?
That analysis should occur before distributions are promised.
The claim amount is not necessarily what the beneficiaries lose dollar-for-dollar
Estate administration still requires consideration of valid administration expenses, funeral expenses, statutory priorities and the actual assets available. In some estates, an EOHHS claim may exceed the value of the estate itself. The existence of a large claim does not create additional estate assets.
Is hardship relief available?
Rhode Island regulations provide a procedure for undue-hardship consideration in specified circumstances. The requirements are narrow and fact-specific and include specified residence and financial requirements. Hardship relief should not be assumed merely because payment of the claim would reduce or eliminate an inheritance.
Do not distribute around an unresolved EOHHS issue
An executor should identify Medicaid estate-recovery issues early. Making distributions while a potentially recoverable EOHHS claim remains unresolved can create problems not only for the executor but potentially for recipients of estate property.
Read: Can an Executor Distribute an Estate Before Probate Is Finished?
Speak with a Rhode Island probate attorney
Attorney Mark C. Hamer assists executors, administrators and families with probate and estate administration throughout Rhode Island from his Providence office.
Learn more about Probate & Estate Administration or contact Mark to discuss the circumstances of an estate.
Official sources
This article provides general information only and is not legal advice. Medicaid estate-recovery rights depend upon the facts of the particular estate and applicable law.