This is going to be long.......It's a debt due the state so may not have a statute of limitations like credit card or other consumer debt does. You need to look at NJ law as to this.
New Jersey on 11/29/2011 signed off on HMS as the recovery audit contractor. HMS does MERP for State of New Jersey, dept of Heath Services, DMAHS. They are the outside contractor & as such get a % of the recovery plus fees. All correspondence will flow from them but any appeals will be done by a oversight division of states dept of health services legal dept.
HMS does MERP for about half the states. They are a part of very very sophisticated corp that does huge compliance for CMS, hospital systems, state governments. One division - I believe - does stark law investigations. You want an algorithm on a health care probability, well it will be there within one of their divisions. MERP is just one aspect of what HMS is.
If the play book for NJ is like what it is for TX (I'm dealing with TX probate &hms) then whomever was on file and was mailed your late parents correspondence from state Medicaid (like their renewal letters) will get a "letter of intent" to file a claim or lien against the estate from HMS within 6 -12 weeks. The letter will be somewhat specific in that it will have a $$$ amount due but somewhat vague in the details as to how exemptions, exclusions, costs of care or maintenance offset is done, or cost-benefit analysis & recoverable estate is determined or how recovery is done within probate. Letter will require a response from you within a tight timeframe as to if your will be filing for exemptions, etc.
If your parents Medicaid corrspondence went to them at the NH that will be a problem as you are likely to get it late or not ever get it. I got 2 letters - 1 was mailed to the correct address and another to an address that was almost 2 years past in changing with the state. For both letters, the postmark was 12 days after the letter date of correspondence inside. For more fun in this, the initial letter required a response within 30 days from the date of the letter inside.
What is required and what the timeframe will be very dependent on your states laws for property, probate etc. as merp is totally interdependent on these to be able to acquire the property. Some states allow for MERP to place an actual lien on real property and other states have it as a claim. Then there are the nuances of state law within the claims process, like MERP is a class 7 claim for TX probate. NJ should have details of this within your state administrative code which should be on-line. And I would think should also be detailed to some degree in NJ Medicaid website. Lol?
Personally I think that if you clearly can show & provide the documentation that either there was a full time caregiver for 2 years prior, a surviving spouse or a totally low income 100% heir then you can deal with MERP on your own. Anything other than that needs an experienced probate attorney to deal with this as it will involve either some sort of negotiation to get a MERP release or a probate court order awarding it to others so their claim is moot.
If the property has been empty and family has been paying on house stuff, you really need to start finding receipts, cancelled checks, etc to establish claims you or others have against the estate in addition to whatever MERP has. Also funeral costs is a claim as is executor related costs.
Also as its a debt, you can do what you do when dealing with debt collectors. You make them prove the debt is valid. If your parent was in the NH on medicaid and then something happened so they went onto hospice (a Medicare benefit), there could be billing errors.
For TX & GA (also has HMS for MERP), there is a 1page release of claim form. It has a section for the descriptive on the property & atty / agent contact info & probate court #. Then a section as to what action the state will take. If you want to sell the house, you will need for something like this to show a full release to sell the house without a glitch at closing. It can be attached to the chain of documents on the parcel at the courthouse too. The release is central as the title companies will not issue title insurance without some paperwork showing clearance of any claim or lien on property for sellers on Medicaid. If the buyer is getting a mortgage - which most do - title insurance is required. If your transferring ownership to family, you still want it as eventually it will get sold or they want to get equity lending on the property and you want no clouds out there to screw this up.
For what it's worth, there are a couple on this site who have dealt with MERP and gotten them to settle for a much much lower amount without doing probate. They both had taxes, insurance and utility paid on the vacant property and both a low value type of homes. Both found out about the claim when they went to close on a sale and couldnt as the claim showed up. Bet that was fun! Another in NYS is basically ignoring MERP but is paying the taxes on the property (so no worry about tax sale) but going to wait out the 10 year state limitations for taxes due to his state. If you're doing probate, you will have to get whatever done within the window allowed for probate to be completed.
I do think that property value makes a difference in how to deal with this. If its a higher value property, it can be sold with everybody getting some payoff.
Really look to see what exemptions, etc could work & what possible claims may work. Also if the tax assessor value of the house is whack, you probably want to get an appraisal done to get a better figure to work from. Good luck.
http://www.state.nj.us/humanservices/dmahs/clients/The_NJ_Medicaid_Program_and_Estate_Recovery_What_You_Should_Know.pdf Read this and it should give you guidance. You are obliged to notify state person has passed and state has to notify you within 90 days of RECEIPT OF WRITTEN NOTICE TO PROPER OFFICE whether they intend to attempt recovery.
New Jersey on 11/29/2011 signed off on HMS as the recovery audit contractor. HMS does MERP for State of New Jersey, dept of Heath Services, DMAHS. They are the outside contractor & as such get a % of the recovery plus fees. All correspondence will flow from them but any appeals will be done by a oversight division of states dept of health services legal dept.
HMS does MERP for about half the states. They are a part of very very sophisticated corp that does huge compliance for CMS, hospital systems, state governments. One division - I believe - does stark law investigations. You want an algorithm on a health care probability, well it will be there within one of their divisions. MERP is just one aspect of what HMS is.
If the play book for NJ is like what it is for TX (I'm dealing with TX probate &hms) then whomever was on file and was mailed your late parents correspondence from state Medicaid (like their renewal letters) will get a "letter of intent" to file a claim or lien against the estate from HMS within 6 -12 weeks. The letter will be somewhat specific in that it will have a $$$ amount due but somewhat vague in the details as to how exemptions, exclusions, costs of care or maintenance offset is done, or cost-benefit analysis & recoverable estate is determined or how recovery is done within probate. Letter will require a response from you within a tight timeframe as to if your will be filing for exemptions, etc.
If your parents Medicaid corrspondence went to them at the NH that will be a problem as you are likely to get it late or not ever get it. I got 2 letters - 1 was mailed to the correct address and another to an address that was almost 2 years past in changing with the state. For both letters, the postmark was 12 days after the letter date of correspondence inside. For more fun in this, the initial letter required a response within 30 days from the date of the letter inside.
What is required and what the timeframe will be very dependent on your states laws for property, probate etc. as merp is totally interdependent on these to be able to acquire the property. Some states allow for MERP to place an actual lien on real property and other states have it as a claim. Then there are the nuances of state law within the claims process, like MERP is a class 7 claim for TX probate. NJ should have details of this within your state administrative code which should be on-line. And I would think should also be detailed to some degree in NJ Medicaid website. Lol?
Personally I think that if you clearly can show & provide the documentation that either there was a full time caregiver for 2 years prior, a surviving spouse or a totally low income 100% heir then you can deal with MERP on your own. Anything other than that needs an experienced probate attorney to deal with this as it will involve either some sort of negotiation to get a MERP release or a probate court order awarding it to others so their claim is moot.
If the property has been empty and family has been paying on house stuff, you really need to start finding receipts, cancelled checks, etc to establish claims you or others have against the estate in addition to whatever MERP has. Also funeral costs is a claim as is executor related costs.
Also as its a debt, you can do what you do when dealing with debt collectors. You make them prove the debt is valid. If your parent was in the NH on medicaid and then something happened so they went onto hospice (a Medicare benefit), there could be billing errors.
For TX & GA (also has HMS for MERP), there is a 1page release of claim form. It has a section for the descriptive on the property & atty / agent contact info & probate court #. Then a section as to what action the state will take. If you want to sell the house, you will need for something like this to show a full release to sell the house without a glitch at closing. It can be attached to the chain of documents on the parcel at the courthouse too. The release is central as the title companies will not issue title insurance without some paperwork showing clearance of any claim or lien on property for sellers on Medicaid. If the buyer is getting a mortgage - which most do - title insurance is required. If your transferring ownership to family, you still want it as eventually it will get sold or they want to get equity lending on the property and you want no clouds out there to screw this up.
For what it's worth, there are a couple on this site who have dealt with MERP and gotten them to settle for a much much lower amount without doing probate. They both had taxes, insurance and utility paid on the vacant property and both a low value type of homes. Both found out about the claim when they went to close on a sale and couldnt as the claim showed up. Bet that was fun! Another in NYS is basically ignoring MERP but is paying the taxes on the property (so no worry about tax sale) but going to wait out the 10 year state limitations for taxes due to his state. If you're doing probate, you will have to get whatever done within the window allowed for probate to be completed.
I do think that property value makes a difference in how to deal with this. If its a higher value property, it can be sold with everybody getting some payoff.
Really look to see what exemptions, etc could work & what possible claims may work. Also if the tax assessor value of the house is whack, you probably want to get an appraisal done to get a better figure to work from. Good luck.
Read this and it should give you guidance. You are obliged to notify state person has passed and state has to notify you within 90 days of RECEIPT OF WRITTEN NOTICE TO PROPER OFFICE whether they intend to attempt recovery.