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Medicaid Estate Recovery

Changes to Indiana Law That Affect
Medicaid Estate Recovery


Beginning July 1, 2018, IC 29-1-7-7(d), regarding Notice of Administration in a probate estate, is amended to state that a Notice of Administration regarding any decedent who was at least 55 years of age at the time of death must be sent to Indiana Medicaid Estate Recovery as a reasonably ascertainable creditor.  The address for service of notice is:

Medicaid Estate Recovery Program
Indiana Family and Social Services Administration
402 W. Washington St., W451, MS 27
Indianapolis, IN  46204

Medicaid Estate Recovery

Medicaid Estate Recovery is the process by which the State of Indiana seeks to recover amounts paid by Medicaid on behalf of a qualified individual. When a Medicaid recipient dies, the State of Indiana is required by federal and state law to seek recovery from their estate funds equal to the amount used to pay for their medical expenses, including capitation payments made to a managed care entity on behalf of a member of the Healthy Indiana Plan. Any funds recovered through the estate recovery process are then used to help provide for future Medicaid recipients. The Indiana Family & Social Services Administration Estate Recovery Program is the entity that administers the estate recovery process for the State of Indiana. The Estate Recovery Program will seek to recover the total amount Medicaid has paid on behalf of recipients after they turned 55-years-of-age, and in certain other limited circumstances.

Frequently Asked Questions

What is an estate?

For Medicaid Estate Recovery purposes, an estate consists of the assets and property owned by the Medicaid recipient at the time of his or her death. This includes all real and personal property included within the Medicaid recipient’s probate estate. The term estate also includes “non-probate assets,” which is any real and personal property that is conveyed through a “non-probate transfer.”

What is a capitation payment?

Capitation payments are made each month on behalf of a Medicaid member when they are enrolled with a Managed Care Entity for programs such as HIP, Hoosier Healthwise, Hoosier Care Connect, or PathWays.

What assets can be recovered?

The following are some of the types of assets that the Estate Recovery Program can seek to recover:

  • Real property, including property conveyed to the recipient’s survivor through joint tenancy with right of survivorship.
  • Money remaining in the recipient’s bank account regardless if the account has a payable on death provision or has a joint owner.
  • Money remaining in a recipient’s nursing home account.
  • Funds remaining in a Qualified Income Trust, also known as a Miller Trust, as of the date of death.
  • Funds remaining in a funeral trust after the funeral has been paid for in full.
  • Annuities purchased after May 1, 2005, including annuities that do not designate the State of Indiana as the beneficiary.
  • Assets in a revocable trust if the assets were transferred into the trust after May 1, 2002.

Are there assets that cannot be recovered?

Yes. There are a number of assets that cannot be recovered. These may include

  • The proceeds of a life insurance policy that names a beneficiary.
  • Real property held by a Medicaid recipient that is subject to a life estate.
  • Non-probate assets that were transferred out of the probate estate before May 1, 2002.
  • The sum due from an annuity contract purchased before May 1, 2005.
  • Personal effects, ornaments, or keepsakes of the Medicaid recipient.
  • Assets protected by an Indiana Partnership Long Term Care Insurance Policy (see below for link to the Indiana Long Term Care Insurance Program).
  • All of a recipient’s assets so long as the Medicaid recipient is survived by a spouse, a child under 21 years of age, or a child is who disabled or blind.

Is a recipient’s house and real estate subject to Medicaid Estate Recovery?

Yes. A Medicaid recipient’s house and real estate may be subject to estate recovery. This includes a house owned by a Medicaid recipient which at the time of death was conveyed to another individual through joint tenancy with right of survivorship, if the joint tenancy was created after June 30, 2002.

Are there exceptions to Medicaid Estate Recovery?

The State will not seek recovery if it will result in a substantial and undue hardship for the surviving beneficiaries of the decedent’s estate. A surviving beneficiary who applies for an undue hardship waiver will have their application considered if they are an immediate family member. In exceptional circumstances, applications from non-immediate family members will be considered. Applications for an undue hardship waiver may be requested by phone at 877-267-0013 or via email at EstateRecovery@fssa.in.gov and must be submitted within 90 days of the date of the claim. Applications can also be downloaded from the FSSA website (see below for link).

Can other expenses be paid before the State of Indiana’s Estate Recovery Program claim?

Yes and no. When the State has a claim against a Medicaid recipient’s estate, the claim has a preferred status. This means that the State’s claim is to be paid in full before other debts are paid or distributions are made to the Medicaid recipient’s heirs.  There are, however, some expenses that can be paid before the State’s claim is paid.  These expenses include expenses of administration, funeral and cemetery expenses up $3,500 pursuant to I.C. 12-14-17, and may include certain expenses of the Medicaid recipient’s last illness. However, funds remaining in a Qualified Income Trust (QIT or Miller trust) cannot be used to pay such expenses.

Are there time limitations as to when the State can seek recovery?

Beginning July 1, 2024, the State of Indiana will have one hundred and twenty (120) days to file a claim after the date of death of the decedent. This time limit does not apply to assets not reported to the county office of the FSSA’s Division of Family Resources. This can include assets that were transferred by way of a Transfer on Death deed or other transfer completed during the Medicaid recipient's life while on Medicaid, or after the Medicaid recipient's death and not included in the Medicaid recipient's probate estate.

Can Medicaid Estate Recovery accept prepayments?

No. There is no mechanism for Medicaid Estate Recovery to accept payments towards a potential claim when the Medicaid member is still alive. If a prepayment is received, it will be returned to the member.

How can I find out how much the State of Indiana is seeking to recover?

The Estate Recovery Program can provide the amount of the State’s claim upon request. The program will determine the claim amount by calculating the total amount of recoverable medical expenses paid on behalf of a Medicaid recipient after they turned 55-years-of-age. Medicaid providers generally have one hundred and eighty (180) days from the date of death to file a claim for payment from Medicaid. Therefore, the amount of the claim may continue to increase after death and a current claim amount should be requested prior to making any payment. Claim inquiries can be made at 877-267-0013 or EstateRecovery@fssa.in.gov.

How is a payment made?

Payments are mailed to: Medicaid Estate Recovery Program
Indiana Family and Social Services Administration
402 W. Washington Street, W451 MS 27
Indianapolis, IN 46204

Payments can be in the form of personal check, money order, or cashier’s check and made payable to the: “Treasurer, State of Indiana.”

To ensure that the checks are successfully processed, DO NOT USE light colored ink when issuing the check. Black or dark blue ink are required.

CHECKS WRITTEN IN LIGHT COLORED INK WILL BE RETURNED TO THE SENDER.

Is there a way to contact the Estate Recovery Program to report the death of a Medicaid recipient, the opening of an estate, or if I have any other questions about the Medicaid Estate Recovery process?

General inquiries can be sent via U.S. Mail to the address above used for payment, by telephone at 877-267-0013, and by email at EstateRecovery@fssa.in.gov. Notices of administration for opening a probate estate shall also be sent via. U.S. Mail to the payment address above.

Suggested Links:

Federal estate recovery statute: http://www.gpo.gov/fdsys/pkg/USCODE-2010-title42/pdf/USCODE-2010-title42-chap7-subchapXIX-sec1396p.pdf

Indiana Code (Estate Recovery): http://iga.in.gov/legislative/laws/2020/ic/titles/012/#12-15-9

Indiana Administrative Code: http://www.in.gov/legislative/iac/T04050/A00020.PDF

Indiana Health Coverage Program Policy Manual: https://secure.in.gov/fssa/ompp/forms-documents-and-tools2/medicaid-eligibility-policy-manual/

Indiana Medicaid: http://www.in.gov/medicaid/

Indiana Long Term Care Insurance Partnership Program: http://www.in.gov/iltcp/

Application for Medicaid Estate Recovery undue hardship: http://www.in.gov/fssa/ompp/3446.htm