Medicaid Estate Recovery in New Jersey

Medicaid Estate Recovery in New Jersey: key facts

Recovery scope

All Medicaid services paid on behalf of the recipient, including institutional care, non-institutional services, and managed-care (HMO) capitation payments — not limited to nursing-home costs. Medicare cost-sharing paid under the Medicare Savings Programs is excluded (effective January 1, 2010).

Who is subject

Beneficiaries and former beneficiaries who were 55 years of age or older at the time they received the services. Recovery covers all payments for services received on or after age 55.

Recovery deferred

While there is a surviving spouse, a surviving child under age 21, or a surviving child who is blind or permanently and totally disabled under Social Security standards (42 U.S.C. 1382c). When the exception ends — the spouse dies, the child turns 21, or the disability ends — DMAHS may recover from any remaining estate assets.

DMAHS filing deadline

For estates created on or after October 4, 1999, DMAHS must file its claim or lien within three years after it receives actual written notice of the beneficiary's death from the personal representative or any other interested party. The clock does not start until that written notice reaches the Division.

Cost-effectiveness

For beneficiaries who died on or after December 22, 1995, DMAHS may elect, in its sole discretion, not to pursue a claim it determines would not be cost-effective to collect.

Hardship waiver

The estate representative has 20 days from receiving written notice of the DMAHS claim to request a waiver or compromise for undue hardship; DMAHS decides within 45 days. Undue hardship is shown only if the estate is or would become the survivors' sole income-producing asset and recovery is likely to leave one or more survivors eligible for public assistance or Medicaid. There is a rebuttable presumption that no undue hardship exists where the hardship resulted from estate planning that divested assets in order to avoid estate recovery.

Appealing a waiver denial

A written request for a hearing must reach the Division within 20 days of receiving its waiver decision. The Division forwards the request to the Office of Administrative Law, which schedules the hearing and notifies the parties.

Liens

DMAHS files a lien against the estate for all payments for services received on or after age 55. Where a family member lived in the beneficiary's home before death and it remains that family member's primary residence, DMAHS may record a lien but will not enforce it until the property is sold or the resident dies or moves out.

Governing law: N.J.S.A. 30:4D-7.2, 30:4D-7.2a; N.J.A.C. 10:49-14.1

Steps to take when someone dies

1. Determine whether the deceased received Medicaid services on or after age 55.
2. Notify DMAHS in writing as soon as possible after the death — DMAHS asks that those handling the estate write to the Office of Legal and Regulatory Affairs, Attn: Estates, PO Box 712, Mail Code #6, Trenton, NJ 08625 — and ask whether it has a claim before spending estate funds. That written notice also starts the three-year period within which DMAHS must file its claim or lien.
3. Pay reasonable funeral expenses, estate-administration costs, and any debt owed to the Office of the Public Guardian for Elderly Adults first; the DMAHS claim is satisfied before distributions to other creditors or heirs.
4. To seek relief, file a request for a waiver or compromise on undue-hardship grounds within 20 days of receiving DMAHS's written notice of its claim.

Frequently asked questions