Nursing Home Resident Disqualified for Transfer of Assets Eligible for Undue Hardship Exception

A New York appeals court recently held that a nursing home is  eligible for the undue hardship exception to a Medicaid penalty period, even though the home had not filed to, or threatened to evict her, because she was insolvent and unable to recover the assets, and because no other nursing home would accept her. Matter of Tarrytown Hall Care Center v. McGuire (N.Y. Sup. Ct., App. Div., 2nd Dept., No. 2849/12, April 16, 2014).

Margaret Traino lived at Tarrytown Hall Care Center from June 2008 until her death in April 2011. She was insolvent and subject to a Medicaid penalty period due to a transfer of assets for less than fair market value. The nursing home applied to the state to receive Medicaid reimbursement for the penalty period under the undue hardship exception.

The state denied the nursing home's application, ruling that the facility failed to show that Ms. Traino was unable to receive appropriate medical care without Medicaid because it did not attempt to evict Ms. Traino. The nursing home appealed.

The New York Supreme Court, Appellate Division, set aside the state's decision, holding that there is no requirement that a nursing home commence an eviction proceeding in order to prove undue hardship. According to the court, the nursing home showed that Ms. Traino "was unable to obtain appropriate medical care without the provision of Medicaid by offering proof that the decedent was insolvent and unable to recover transferred assets, and that no nursing facility which could provide her with the necessary level of care would accept her."

For the full text of this decision, go here.

Get legal Advice When Applying for Medicaid- State Can Recover From a Medicaid Recipient's Estate Even Though Estate Would Have Qualified for Hardship Waiver

A recent case underscores the importance of seeking and obtaining legal advice when dealing with Medicaid resource recovery.  A Michigan appeals court has ruled that a Medicaid recipient's estate cannot avoid estate recovery by claiming undue hardship because the state didn't pursue a hardship waiver when it had the chance. In re Estate of Clark (Mich. Ct. App., No. 320720, May 28, 2015).

Larry Wykle enrolled his mother, Violet Clark, in Medicaid. The application included an acknowledgment that the state may try to recover for services from Ms. Clark's estate and that the state may agree not to pursue recovery if an undue hardship exists. After Ms. Clark died, Mr. Wykle became the administrator of her estate. The state notified Mr. Wykle that it intended to recover Medicaid expenditures. The notice included information about applying for a hardship exemption. The estate's only asset was a house that was valued at less than the average price of a home in the area, which under the state Medicaid plan would have made it eligible for a hardship exemption.

Mr. Wykle did not pursue the hardship waiver and he denied the state's claim. The state sued the estate. Mr. Wykle argued that the estate could not collect against the estate because the value of the home qualified for a hardship waiver, and that the state did not provide Mr. Wykle with information how to apply for a hardship waiver, informing him only that such a waiver was available.  The trial court granted the estate summary judgment because the estate consisted only of a modest household and the state did not provide Mr. Wykle with information on how to apply for a hardship waiver when he enrolled Ms. Clark in Medicaid.The state appealed.

The Michigan Court of Appeals reversed, holding that Mr. Wykle received proper notice of the hardship exemption and that the hardship exemption does not prevent the state from pursuing estate recovery against an estate that might have qualified, but did not apply. The court rules that Mr. Wykle "cannot now attempt to avail himself of the waiver’s benefits without having followed the procedural rules necessary to claim the benefit." In addition, the court rules that the written notice about the waiver in the application was sufficient.

For the full text of this decision, click here.