DHMH/E&L November 2006
MEDICAL ASSISTANCE (MEDICAID) PROPERTY LIENS & ESTATE RECOVERY
FACT SHEET
This fact sheet is designed to provide more information regarding property liens and estate
recovery, which is addressed on the Medicaid application under Rights and Responsibilities.
What is a lien?
A lien is the legal right to hold an interest in the property of another until some debt is paid. A
mortgage is an example of a lien. A property lien is filed in the Circuit Court for the area in
which the property is located. The lien may become payable at the time of sale either during the
lifetime of a person or after a person’s death through his/her estate.
What is a Medicaid property lien?
Federal and State law allow Medicaid to place liens on the homes of persons who have been:
1. Admitted to a nursing home, and
2. Granted eligibility for Medicaid, and
3. Determined by medical review as “not able to resume living in the home property.”
Medicaid files a lien in these instances due to the large payments made to nursing homes.
Having a property lien enables Medicaid to recover the money it spent on behalf of the recipient
when the property is sold. Medicaid can file a property lien regardless of a person’s age.
Medicaid cannot file a lien if: a spouse, a child under 21 or a blind or disabled child lives in the
home.
What is an estate?
An estate is all real and personal property and other assets (anything owned that can produce
wealth) of a deceased person. An estate can include the home and property of a deceased
person.
What is estate recovery and how does it work?
In 1976 the Maryland General Assembly granted Medicaid the right to file a claim against the
estate of a deceased Medicaid recipient for medical services it provided to the recipient. The
Medicaid recipient must have been at least 55 years old when receiving Medicaid benefits and
only money that was paid by Medicaid for medical services rendered to the recipient on or after
his/her 55
th
birthday can be recovered. However, Medicaid cannot file a claim if there is:
1. A surviving spouse, or
2. An unmarried child younger than 21, or
3. A blind or totally disabled child.
Usually Medicaid is considered a general creditor. This means that Medicaid is paid after
priority claims such as court fees, fees used to administer the estate, funeral expenses, attorney’s
fees and taxes. In some instances there may be other assets that can satisfy Medicaid’s claim that
would not require the selling of the deceased person’s home and property. If the assets are not
enough to pay the Medicaid claim, Medicaid will withdraw the claim, accept the remaining
assets as payment in full, or work with the administrator of the estate in choosing other options to
repay the Medicaid debt. Medicaid is not interested in taking the title to anyone’s home.
TURN OVER
DHMH/E&L November 2006
Example 1
John Doe, age 85, was in a nursing home in May. He died June 3. Medicaid paid $2,000 for his
care. His estate is worth $50,000. Medicaid will recover $2,000, once all priority claims are
paid.
Example 2
Joe Smith dies while in the Older Adults Waiver. Medicaid paid $25,000 for his care. His estate
is worth $20,000. Medicaid will recover whatever remains once all priority claims are paid.
Are there exceptions in estate recovery?
Estate recovery may also be waived in certain circumstances due to hardship. A hardship means
Medicaid’s claim will result in the removal of a dependent who:
1. Lived in the property at the time of the Medicaid recipient’s death.
2. Lived there continuously for a period of two years before the Medicaid recipient’s
death, and
3. Cannot find another place to live.
Sometimes, when all the conditions above are not met, Medicaid will allow the dependent to
continue to live in the property, but may place a non-interest bearing mortgage on the property.
Medicaid, based on the dependent’s ability to pay, determines monthly payments. This
agreement protects the dependent who lives in the property and Medicaid’s interest in the
property.
What expenses can Medicaid recover?
All medical services are subject to repayment. This includes, but is not limited to, nursing home
care, hospital services, home and community based waivers (for example, Older Adults Waiver,
Living at Home Waiver), personal care, physician and pharmacy services. It is important to
note that recovery will be made even if Medicaid paid a relative, friend or agency to
provide services to the Medicaid recipient as allowed under certain Medicaid waivers (such
as the Older Adults Waiver). However, in those instances where Medicaid made Medicare
premium, co-pay and deductible payments only, the Medicaid Program will not seek
reimbursement.
Additional questions concerning estate and/or property lien recovery should be directed to your
caseworker at the local department of social services or:
Department of Health and Mental Hygiene
Office of Operations, Eligibility & Pharmacy
Recoveries and Financial Services Division
ATTN: Estates, Liens & Trust Section
P.O. Box 13045
Baltimore, MD 21203
Phone (410) 767-6613
Applicable references may be found at Article 15-120 of the Annotated Code of Maryland,
COMAR 10.09.24.15, and the Tax Equity and Fiscal Responsibility Act of 1982