In a long-awaited decision, the Oregon Supreme Court has struck down Medicaid repayment rules issued by the Department of Human Services in 2008. The court ruled that DHS did not have the legal authority to issue rules which would allow it to recover Medicaid payments from assets a Medicaid recipient transferred to his or her spouse up to five years prior to applying for Medicaid. The decision upholds a 2014 ruling from a lower court which also invalidated the rules in question. See our prior blog on this case.
By way of very brief summary, Medicaid is a cooperative endeavor in which the federal government provides financial assistance to individual states in order to provide health care for qualifying individuals. Medicaid is a means-tested program meaning that its benefits are limited to those individuals whose assets and monthly incomes fall below certain prescribed dollar amounts. What Medicaid pays out in benefits, it also attempts to eventually recover from the estates of deceased Medicaid recipients. The law allows DHS to engage in this process of “estate recovery” but up until now the process was limited to assets which the Medicaid recipient owned on the date of his/her death.
DHS, in issuing the challenged rules, sought to expand its estate recovery to assets owned by a Medicaid recipient’s spouse at the time of his or her death. The new rules would have allowed DHS to recover payments from an asset which was transferred from the Medicaid recipient to his or her spouse so long as the transfer occurred within five years before the Medicaid recipient applied for benefits. The court, however, ruled that DHS lacked the statutory authority to support such an expansion of the Medicaid recovery rules. The full text of the court’s decision can be read here.
The ruling was applauded by Medicaid practitioners and advocates for the elderly and disabled. DHS, for its part, may still seek to expand its estate recovery efforts, but it will require action by the state legislature in order to make that happen.
© 1/6/2017 Charles A. Ford of Hunt & Associates, P.C. All rights reserved.