FLORIDA PROBATE ADMINISTRATION – DEALING WITH MEDICAID (AHCA)

## Understanding Florida’s Medicaid Estate Recovery Act

The Agency for Healthcare Administration is generally entitled to recover Medicaid payments from a probate estate as a creditor, but there are some exceptions. For example, the agency cannot enforce a debt against an estate if the recipient is survived by a spouse, a child under 21, or a disabled child.

Additionally, the agency cannot recover from an estate if doing so would cause undue hardship for qualified heirs. Understanding these rules is crucial when planning for Medicaid and Florida probate.

## Legal Framework: Florida Statute § 409.9101

According to Fla. Stat. § 409.9101, the Agency for Healthcare Administration (AHCA) is generally entitled to recover Medicaid payments from a probate estate as a creditor. However, the statute also sets out some exceptions.

### Legislative Intent and Federal Authority

**409.9101 Recovery for payments made on behalf of Medicaid-eligible persons.—**

**(1) This section may be cited as the “Medicaid Estate Recovery Act.”**

**(2) It is the intent of the Legislature by this section to supplement Medicaid funds that are used to provide medical services to eligible persons. Medicaid estate recovery shall be accomplished by the agency filing a statement of claim against the estate of a deceased Medicaid recipient as provided in part VII of chapter 733. Recovery shall be made pursuant to federal authority in s. 13612 of the Omnibus Budget Reconciliation Act of 1993, which amends s. 1917(b)(1) of the Social Security Act, 42 U.S.C. s. 1396p(b)(1).**

### How Medicaid Debt Is Created

**(3) The acceptance of public medical assistance, as defined by Title XIX (Medicaid) of the Social Security Act, including mandatory and optional supplemental payments under the Social Security Act, shall create a debt to the agency in the total amount paid to or for the benefit of the recipient for medical assistance after the recipient reached 55 years of age. Payment of benefits to a person under the age of 55 years does not create a debt. Upon filing of a statement of claim in the probate proceeding, the agency shall be an interested person as defined in s. 731.201 to the same extent as other estate claimants.**

**(4) The agency may amend the claim as a matter of right up to 1 year after the last date medical services were rendered to the decedent.**

**(5) The agency’s provider processing system reports shall be admissible as prima facie evidence in substantiating the agency’s claim.**

## When Medicaid Estate Recovery Cannot Be Enforced

### Protected Survivors

**(6) The debt created under this section shall not be enforced if the recipient is survived by:**

– **(a) A spouse;**
– **(b) A child or children under 21 years of age; or**
– **(c) A child or children who are blind or permanently and totally disabled pursuant to the eligibility requirements of Title XIX of the Social Security Act.**

### Exempt Property Protection

**(7) No debt under this section shall be enforced against any property that is determined to be exempt from the claims of creditors under the constitution or laws of this state.**

This is particularly important for homeowners, as Medicaid’s ability to take your house in Florida is limited by homestead protections and other exemptions.

## Undue Hardship Exceptions

If recovery of the debt causes undue hardship for the qualified heirs, the agency shall not recover from an estate. The personal representative of an estate and any heir may request that the agency waive recovery of any or all of the debt when recovery would create a hardship.

### Hardship Criteria

**(8) The agency shall not recover from an estate if doing so would cause undue hardship for the qualified heirs, as defined in s. 731.201. The personal representative of an estate and any heir may request that the agency waive recovery of any or all of the debt when recovery would create a hardship. A hardship does not exist solely because recovery will prevent any heirs from receiving an anticipated inheritance. The following criteria shall be considered by the agency in reviewing a hardship request:**

**(a) The heir:**
– **1. Currently resides in the residence of the decedent;**
– **2. Resided there at the time of the death of the decedent;**
– **3. Has made the residence his or her primary residence for the 12 months immediately preceding the death of the decedent; and**
– **4. Owns no other residence;**

**(b) The heir would be deprived of food, clothing, shelter, or medical care necessary for the maintenance of life or health;**

**(c) The heir can document that he or she provided full-time care to the recipient which delayed the recipient’s entry into a nursing home. The heir must be either the decedent’s sibling or the son or daughter of the decedent and must have resided with the recipient for at least 1 year prior to the recipient’s death; or**

**(d) The cost involved in the sale of the property would be equal to or greater than the value of the property.**

## Third-Party Settlements and Asset Sales

### Settlement Proceeds

**(9) Instances arise in Medicaid estate-recovery cases where the assets include a settlement of a claim against a liable third party. The agency’s claim under s. 409.910 must be satisfied prior to including the settlement proceeds as estate assets. The remaining settlement proceeds shall be included in the estate and be available to satisfy the Medicaid estate-recovery claim. The Medicaid estate-recovery share shall be one-half of the settlement proceeds included in the estate. Nothing in this subsection is intended to limit the agency’s rights against other assets in the estate not related to the settlement. However, in no circumstances shall the agency’s recovery exceed the total amount of Medicaid medical assistance provided to the recipient.**

### Property Sales for Recovery

**(10) In instances where there are no liquid assets to satisfy the Medicaid estate-recovery claim, if there is nonexempt personal property or real property which is not protected homestead and the costs of sale will not exceed the proceeds, the property shall be sold to satisfy the Medicaid estate-recovery claim. Real property shall not be transferred to the agency in any instance.**

In cases where the assets include a settlement of a claim against a liable third party, the agency’s claim under this act must be satisfied prior to including the settlement proceeds as estate assets. The remaining settlement proceeds shall be included in the estate and be available to satisfy the Medicaid estate-recovery claim.

## Protecting Assets Through Proper Estate Administration

In instances where there are no liquid assets to satisfy the Medicaid estate-recovery claim, the nonexempt personal property or real property that is not protected homestead shall be sold to satisfy the claim. Understanding which assets are exempt from Medicaid in Florida is crucial for proper estate planning.

Exempt assets under the Probate code are not subject to Medicaid’s claims. That is why it is crucial that in administering an estate you do so with an experienced probate attorney who can help you navigate all the administrative tricks in Florida.

For those planning ahead, learning about legal strategies to protect assets from Medicaid can help preserve more of your estate for your heirs.

-Brice Zoecklein, Esq.

877-206-0022

**Disclaimer:** The information contained in this blog/website is for informational purposes only and provides general information about the law but not specific advice. This information should not be used as a substitute for advice from competent legal counsel as laws change and the facts in your specific case need to be analyzed.