Medicaid Estate Recovery in Kentucky

Medicaid Estate Recovery in Kentucky: key facts

Recovery scope

Payments for a period of institutionalization: nursing facility, ICF-IID, and home- and community-based waiver services (including SCL, acquired brain injury, and Michelle P. waivers), plus related prescription drugs, hospital, and physician services, Medicare cost sharing and premiums, and any capitation payment Medicaid made to a managed care organization for the recipient. Recovery cannot exceed what Medicaid paid.

Who is subject

A recipient age 55 or older who received covered services, or a recipient permanently institutionalized (in a nursing facility or ICF-IID for six months or more) at any age.

Exemptions

No recovery while there is a surviving spouse, or a surviving child who is under 21 or who is blind or disabled (as defined in 42 U.S.C. 1382c). Resources protected during the eligibility determination by a long-term care partnership insurance policy are also outside recovery. None of the exemptions apply if it is adjudicated that the recipient qualified for Medicaid fraudulently.

Undue hardship / cost

Recovery is waived where it would work an undue hardship — for example a sole income-producing family farm or business conveyed to the surviving recipient family member. Residential real property that produces income through a lease or rental does not count as a sole income-producing asset. The Department may also waive recovery as not cost effective, and it does not treat recovery as cost effective when the estate's date-of-death value subject to recovery is $10,000 or less or is less than the administrative cost of recovering.

Governing law: 907 KAR 1:585

Steps to take when someone dies

1. Determine whether the deceased received Medicaid nursing facility, ICF-IID, or waiver services at age 55 or older, or while permanently institutionalized.
2. The provider reports the death to the local Department for Community Based Services office within ten days; the Department then serves the estate representative a written notice of intent to recover.
3. Address the noticed amount as a debt of the estate, after confirming whether a surviving-spouse or surviving-child exemption applies.
4. Apply for an undue hardship exemption within thirty days of the notice if it applies:
   • Submit a written request to the Department for Medicaid Services
   • Verify that the asset is a sole income-producing family farm or business conveyed to a recipient family member
   • The Department issues a decision within thirty days; a denial can be appealed

Frequently asked questions