Feds OK fix for Medicaid estate claims

Rick Rayburn owns a small farm, so perhaps it's not surprising he used an agricultural analogy to describe what the past 13 months have been like for him.

Scott and Ellen Killerud were startled to discover that if you’re 55 or older and on Medical Assistance — Minnesota’s version of Medicaid — the state places an estate claim with which to recover its costs after you and your spouse have died. (2016 file / News Tribune)

Rick Rayburn owns a small farm, so perhaps it’s not surprising he used an agricultural analogy to describe what the past 13 months have been like for him.

“It was a tough row to hoe,” said Rayburn, whose farm is nestled in woods and hills near Willow River. “I feel like I’ve been beaten up and run over.”

But Rayburn and a group of Minnesotans - mostly Pine County farmers - are celebrating this week after a federal agency affirmed what the Minnesota Legislature did earlier in the year to remove the shadow of estate claims from their properties.

At issue were the Medicaid payments - in Minnesota known as Medical Assistance - many more Minnesotans received when Medicaid was expanded in 2014 as part of the Affordable Care Act. Rayburn and others say they weren’t aware, and weren’t informed, when they signed up for Medical Assistance via MNsure that the money that went to their coverage would be docked against their estates if their descendants tried to sell the land after their death.

Under the law, it applied only to people ages 55-64.


It wasn’t a new provision, said state Sen. Tony Lourey, DFL-Kerrick, but it had affected very few people before Medicaid was expanded since a means test meant almost anyone with property was excluded from coverage.

By the time they discovered the estate claim provision in late 2015, some property owners had accumulated thousands of dollars in claims against their estates - including $30,000 for Rick Rayburn and his wife, Rose; $15,000 for Robert and Julie Gelle of Sandstone; and $11,000 for Scott and Ellen Killerud, who also live near Willow River.

With little or no experience in government or politics, the Rayburns, Gelles, Killeruds and others formed a loose network, calling anyone they could in state and federal offices and in the media to bring attention to what they saw as an injustice.

They found a listening ear in Lourey, who said the estate claims were an “unintended consequence” of Medicaid expansion. Lourey was involved in crafting legislation to remove the provision.

The fix passed in the last hour of the last day of the 2016 session as part of the $182 million state supplemental bill. It stated that estate claims would no longer be accrued from Medical Assistance for health care for estates that closed after July 1, 2016. It was retroactive to Jan. 1, 2014, letting property owners who got Medical Assistance through MNsure off the hook. (It didn’t affect estate claims for Medical Assistance applied to long-term care, such as care in nursing homes.)

But the provision still required the approval of the federal agency involved, the Centers for Medicare and Medicaid Services.

CMS balked, sending a request for more information to the Minnesota Department of Human Services on Nov. 14.

“That was a difficult little chapter,” Lourey said in a telephone interview on Thursday.


CMS approved the fix in a Dec. 20 letter to the DHS, although Rayburn said he didn’t learn about it until earlier this week.

CMS made one change, Lourey said: Instead of being retroactive to Jan. 1, 2014, the provision now applies to people with property who received Medical Assistance before that date as well. The federal agency didn’t think it was fair to exclude the earlier group of recipients, Lourey said.

But the practical effect is small: He’s aware of only three people “in very unique situations” who were affected by estate claims before Medicaid was expanded, Lourey said.

The change also will have almost no additional financial effect on the state, Lourey added. The Minnesota Management and Budget office estimated the original legislation would cost the state $2.25 million to implement in fiscal year 2017 and $2.37 million in each of the next two years.

The news was received with relief by the property owners who have been fighting the estate claim.

“It’s the best news we have heard in a long time,” Julie Gelle wrote in an email. “We can finally close this chapter of our lives.”

Lourey also was celebrating.

“It’s done,” he said. “I told Rick (Rayburn), ‘You actually can drink your champagne now.’ ”


What changed as a result of the 2016 Minnesota Legislature’s revision regarding Medical Assistance estate recovery and liens:

  • Previously, the Minnesota Department of Human Services and county agencies collected from the estates (or spouse’s estates) of deceased Medical Assistance recipients any services they received at 55 years old or older.

  • Beginning with estate claims that were pending as of July 1, 2016, DHS and county agencies will collect only the amount of Medical Assistance paid for long-term services and support. Long-term services and support includes nursing facilities, home and community-based services and hospital and pharmacy services received while in long-term service and support.

Source: Minnesota Department of Human Services  

Related Topics: HEALTH
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