My mother recently passed and I get a letter including a bill from Medicaid for 365,000. She was in The Manor for nine years. We sold her house about eight years ago to pay for a pre paid-funeral. My question is where is this money going to come from?
For me, Moms house had not sold by the time she passed. I received a recovery letter from Medicaid asking me what assets she had. Of course, she had none, other than the house. So a lien was placed on the house. But if Mom did not have the home, she had no assets. They were spent down so she could get medicaid. So on that recovery form you tell them there are no assets. States have laws saying that Medicaid has to try and recover. Every recipient of Medicaid gets a recovery letter.
That letter is a NOI aka a Notice of Intent that the State or it’s outside contractor is going through the required attempt to do a recovery or recoup of the costs paid by LTC Medicaid program and may be also any community based Medicaid programs costs as well (if your State opts for these too). For your mom it came to 365K / abt 40K a yr paid to her Nh for her custodial care room&board costs. That it came to you was done because you were on paperwork for LTC Medicaid or the NH as the contact person for your mom.
Each State does MERP differently as your State laws on real estate, property rights, probate and your States administrative code for Medicaid all - ALL- factor into what’s what on the path taken. But they all start with a NOI. Usually the NOI has a questionnaire with it or a questionnaire comes in the mail soon after. Imho it is super mucho importante that you respond to it and fill out in detail all the information requested. It will ask what was her bank account balance on DOD, her in the NH personal needs trust account balance on DOD, a listing of any assets she had a time of death. If that house was sold almost a decade ago, it’s not an asset to be included in the questionnaire….. if they send a follow up regarding the house then ya deal with it and it’s long ago history but the way you describe it will it isn’t an asset of hers and hasn’t been since forever, so was not an asset of hers at time of death.
Questionnaire will also ask about any after death costs paid by others…. like would be if family ended up have to pay for funeral and burial costs, paid for costs related for upkeep or security on any assets of the Estate, those details would go onto this section. Also will ask if probate is to be opened, on this one if it were me I’d write in “TBD” because it gives you an option to do that if need be.
What the questionnaire does is provide for the details to enable the State or its outside contractors to do a basic cost / benefit assessment as to if a recovery action is to be done. It is super time sensitive too so ya have to get on it and make a xerox of it and all the supporting documentation and then certified mail it back. If you don’t respond then the assumption is that there are assets and that a recovery process has to be started so the file gets assigned…..
If house was sold years & years ago, her name not attached to it in any way since then, and it was sold at arms length type of sale, and for honest to goodness 10K, it hasn’t been her asset forever. If the $ went to preneed policy for 6K, she’s allowed under most States LTC Medicaid to have 2K in non exempt assets, so that leaves at the most a mere $2,000 that got either was spent down properly OR overlooked by a Medicaid caseworker ages ago. Mom’s dead so she can’t say what happened and that caseworker notes are long gone as well.
If you end up fretting what was done 8/9 years ago, look up what is your State’s Statue of Limitation. If it’s at 7 years, you’re past that. If it’s 10, that’s right around the corner. But whatever the case, it is not your debt, it -again - is a debt of the Estate of the deceased. If the now deceased has no “Estate”, it is what it is.
I agree with Alva that there's too many unknowns and we aren't attorneys.
It matters a lot if the home sold for less than FMV, and when it was sold in relationship to her Medicaid application. My neighbor has been wrangling with Medicaid over a messy deceased parent's home sale. They also got a big bill and they had to work through an attorney. They resolved it without going broke.
What did the house sell for?
Who sold the house? Were they legally able to sell the house?
Where did the REST Of the proceeds from the sail of the house go to?
Was this done at a time when she was on already receiving Medicaid?
Was this house listed as her assets when she applied to Medicaid?
If the house was listed as an asset nine years ago and you sold it 8 years ago, then clearly the entire assets didn't go to a funeral.
If you sold your mother's home then those assets were hers to spend on her care.
She would have/should have gone OFF of Medicaid and used the assets of the home to pay her own way until that amount was spent down (along with funeral costs if you will).
Whomever was her POA at the time the home in her name was sold is bound now to face some questions. I can only hope the same person is executor of will or next of kin.
I would simply start out with the executor of your Mom's will writing back and saying "There are no assets in your mother's name".
Medicaid may return to say "You listed assets of a home valued at _______ ".
You will then say that the home was sold and will give all the particulars of the sale.
This wasn't wisely done from what you say.
You may need to do nothing; they may do nothing.
But you may continue to get questions and you may need to answer.
Be ready to consult an elder law attorney will all the particulars.
That will be WHEN home was sold, whether for fair market value, where proceeds of home went, and etc.
I think without our knowing all the particulars we can only guess at this. We cannot know what was done, nor by whom.
If there is a reason you need to know NOW then go ahead and go to the attorney.
Otherwise return the claim and say that your mother had no assets.
Let them take it from there.
But be ready for trouble if this was illegally done. That would be elder fraud, and just plain FRAUD.
https://www.agingcare.com/articles/medicaid-repayment-of-nursing-home-estate-recovery-150497.htm