Medicaid planning has always been a volatile practice areas – the rules change frequently and often with little or no notice. Recently the turbulence has been less in the realm of policy changes and more in the courts. Medicaid litigation is hot.
There are a couple reasons for this:
The Attorney General’s office (the “AG”) has taken the field, showing up regularly in probate court proceedings at which Medicaid eligibility issues are in play – most frequently in cases where petitions are filed to increase the Community Spouse Income Allowance. So far, in nearly every case, the probate judge has granted the requested relief and dismissed the arguments of the AG. But the effect of the AG’s involvement is being felt. Whereas local courts have for years routinely granted petitions involving Medicaid planning – as because these petitions are becoming more common, along with the pushback from the AG, these cases are no longer the “gimme’s” they once were. Attorneys need to be better prepared to justify the relief requested, and explain the law as well as the equities of the particular case.
Litigation involving estate recovery claims is also on the rise. The AG is litigating these cases in counties throughout Michigan, honing their arguments as to why the so-called “notice” defenses should not control the result, and looking for judges who are favorable to their “protect the taxpayers” logic. In addition, it's been more than two years since DHS started using applications with notice language in them. This means that the Medicaid beneficiaries dying today have at least received some notice in their redetermination applications, even if they did not receive notice of the program when they first applied. [Don’t panic, these cases only arise where proper planning was not done to “avoid probate” – that is, ladybird deeds still work – at least for now.]
Some good news: Practitioners are advocating well and are obtaining - and sharing - helpful (and sometimes unhelpful) decisions. Joe Weiler is presenting on this topic at the upcoming ICLE Medicaid and Healthcare Update. His materials are good (I just had a sneak preview) – summarizing the key cases that have been decided, the theories used by the AG, and the best arguments to counter with.