Estate Planning

NC Medicaid Beneficiary Liable for Overpayment

By Greg Herman-Giddens

In this North Carolina Court of Appeals case a Medicaid beneficiary was held liable for overpayment of Medicaid benefits when a newly discovered asset caused her to assets to exceed the resource limit: 

Ella Mae Cloninger entered a nursing home on May 28, 2000 and her children applied for Medicaid on her behalf. When the Medicaid application was filed, the children (allegedly) did not know their mother owned two endowment life insurance policies; the existence of the policies was not disclosed. Later, as a result of class action litigation, they became aware of the policies and, in June, 2005, disclosed them to Medicaid. The policies were cashed in ($330,685) and placed in an account in Ella Mae's name. After receiving notice of the policies, the Medicaid agency terminated Ella Mae's benefits because she was over-resourced. The Department then determined that an over-payment was made in the amount of $142,366.44. This decision regarding over-payment was appealed. The hearing officer found that the insurance policies were available resources and affirmed the over-payment, finding '[Petitioner] liable for the repayment of all Medicaid benefits paid on [their] behalf.' On appeal, the court found that an unknown asset is not necessarily unavailable. There was no legal impediment prohibiting Ella Mae from accessing the life insurance funds; because she was over-resourced when benefits were paid, the trial court correctly determined she was liable for the overpaid amount.

Cloninger v. North Carolina Department of Health and Human Services, 2010 N.C. App. LEXIS 564 (April 6, 2010)

Source: the 4/13/10 National Academy of Elder Law eBulletin.

Full post as published by North Carolina Estate Planning Blog on April 28, 2010 (boomark / email).