Introductory Comments

1. Quad City Estate Planning CouncilMarch 21, 2019Iowa Medicaid Estate RecoveryBen Chatman, Estate Recovery Program Iowa Department of Human ServicesIowa Medicaid Enterprise, Revenue Collections Unit Health Management Systems 317 6th Avenue, Suite 600Des Moines IA 50309www.iowa-estates.combchatman@sumogroup.combchatma@dhs.state.ia.usPhone: 515/246-9841Fax: 515/246-0155 Toll-free 877-463-7887

2. Introductory Comments • Estate Recovery mandated in early 1990’s for all states • Administering the law to recover correctly paid Medicaid, not just collecting money -- Four examples of typical estate recovery cases • Review files regularly to maintain constant active number of files • Only about 35% of total cases (10,000/yr) have any recovery • Over 60% of recoverable cases are less than $2,000 • Waivers (deferrals) in about 11% of all cases. • Average time each file is open is five months. • Average Iowa recoveries for last 3 years is $26 million per year • Authorized by 42 USC 1396(p)(b) and Iowa Code 249A.53(2)

3. Processes • Outreach and Referrals • Obtaining debt information • Contacts with personal representatives • Probate (mandatory online notice, claims, and EDMS) • Iowa Code 633.231; 633.304A, 633.410, and 635.13 • Non-probate (letters and small estate affidavits) • Probate administration (nominated PR by DHS) • TEFRA liens – not available in Iowa • Responses and Follow-up • Consistent monthly deposits

4. What Amount to Collect • As authorized under 42 USC 1396p(b), all Medicaid assistance provided, as limited by Medicaid Improvement for Patients and Providers Act (MIPPA) for Medicare Cost Sharing aka Medicare Savings Program • Fee for service • Affordable Care Act (ACA), Managed Care Organizations (MCO’s), and capitation fees • Buy-in (Medicare premiums) • Interest

5. From Which Estates? • “Estate” includes whether probated or not • Age requirement – 55 and over • Long term care requirement (under 55) • Liability for personal representatives who distribute funds without paying medical assistance debt

6. Waivers and Exemptions • Spouse, disabled children, minor children • Hardship waivers • Homestead exemption not applicable per se (See Iowa Code 561.19), but hardship waiver may apply

7. Probate Assets • Bank accounts • Real estate • Excess burial funds and life insurance • Household goods and personal effects • Litigation • Vehicles • Stocks, bonds, and mineral interests

8. Expanded Probate Assets • Jointly held property Estate of Kirk, 591 NW2d 630 (Iowa 1999) Estate of Serovy, 711 NW2d 290 (Iowa 2006) • Life estates Estate of Laughead, 696 NW2d 312 (Iowa 2005) • Interests in trusts In re Barkema Trust, 690 N.W.2d 50 (Iowa 2004) Estate of Gist, 763 N.W. 2d 561 (Iowa 2009) Estate of Melby, 841 N.W. 2d 867 (Iowa 2014) • Beneficiary designations (annuities, etc.)

9. Higher Priority Expenses • Court costs and costs of administration • Funeral expenses • Medical bills of last illness • Taxes and other debts to federal and state • Examples of other expenses with lower priority • Bankruptcy issues • Medicaid Trusts – DHS is a beneficiary, only costs of administration are paid before Medicaid

10. Medicaid TrustsIowa Code Chapter 633C • Medical assistance income trusts (MAIT’s) aka Miller trusts, income assignment trusts or qualified income trusts • Special needs trusts • Pooled trusts • Balance in trust at death to pay Medicaid

11. Final Comments • All states are required to have a Medicaid Estate Recovery Program, but the laws, the resources devoted to the program, and political climates vary greatly. • Estate recovery is merely a matter of fairness. Assets that could have been used to pay for medical bills before death are used instead after death to replenish Medicaid, similar to a line of credit that comes due in full at death. • Estate recovery is for correctly paid Medicaid. However, referrals can be made to other agencies if there are issues with how the Medicaid benefits were obtained. • Thank you for having me speak to your group.