Frequently Asked Questions

Estate Recovery

The Estate Recovery program enables the state to recover taxpayer funds spent by Medicaid on behalf of the recipient for medical services. The program is required by federal law. Below are some of the questions that are often asked about Estate Recovery.

Established under federal law, this program requires the Alabama Medicaid Agency to recover the costs paid by the Agency from the estates of deceased Medicaid recipients.
a) A person of any age permanently residing in a nursing facility, intermediate care facility for the intellectually disabled, or other medical institutions; and b) A person 55 years of age or older who received medical assistance for any services covered under the Alabama Medicaid State Plan (this includes any individual receiving Home and Community based services).
Estate Recovery happens only after the death of a person receiving Medicaid benefits under the affected categories.
The provider, attorney, personal representative, or case manager should contact the Alabama Medicaid Agency’s Estate Recovery section to provide notification of a recipient’s death within 30 days of the death. This notification can be by phone, fax, email, or mail.
All real and personal property and any other assets included within the individual’s estate as defined by Alabama Probate Law. This definition includes, but is not limited to, homes, land, vehicles, cash and bank accounts.
Yes. a) If there is a spouse residing in the home; b) If there is a child under age 21 or blind or disabled residing in the home; or c) If there is a sibling of the Medicaid recipient who has an equity interest in the home and is currently residing in the home and has been residing continuously in the home for at least one year immediately before the date of the individual’s admission to the institution.
Yes; please contact an Elder Law attorney if you have any other questions or concerns.
An amount equal to the necessary and reasonable expenses for maintaining the vacant home will be deducted from the lien amount. This would only apply to cases regarding Medicaid recipients that were required to sign a lien during the eligibility process.
No. You do not have to sign over the deed to the state; however, you could be required to sign a lien if you are in a nursing facility, intermediate care facility for the intellectually disabled, or other medical institutions. The lien will act as the state’s claim should the property be sold prior to the Medicaid recipient’s death. A lien is not required for recipients receiving home and community based waiver services.
Depending on the wording of the deed, property may be a recoverable asset after the Medicaid recipient’s death (if no exemptions apply). If you have more specific questions about the particular wording, you will need to contact an attorney.
The only recovery would be if your spouse received Medicaid services or if the property’s ownership was transferred to you (the Medicaid recipient). Recovery would happen after the Medicaid recipient’s death or when the exemptions no longer apply.
The definition of an estate is "all real and personal property and other assets as defined by Alabama probate law." Assets can include real property (homes and land), bank accounts (checking, savings and Certificates of Deposit), vehicles (cars, trucks and boats), cash and personal property.
Unless a federal exemption or undue hardship exists, the Estate Recovery program can recover up to the total amount spent by Medicaid on the recipient's behalf.
The Agency will waive or delay recovery upon a showing that an undue hardship exists. For purposes of this Rule, “Undue Hardship” is defined as the existence of a situation, established by convincing evidence, that the estate subject to recovery is an asset such as a family farm or family business which produces “limited income” (defined as equal to or less than the income limit established in Rule 560-X-25-.14) and is the sole income-producing asset of one or more heirs to the estate.
If the heir feels he/she could be considered for an undue hardship, a request must be made within 30 days of receiving the Agency's notice against the estate, or upon the sale, transfer or conveyance of the real property subject to a lien.
Estate Recovery will be delayed until after the death of the surviving spouse, if any, and if; a) There is a child under 21 years of age; or b) There is a blind or totally and permanently disabled child in the home. In the case of liens placed on the home, recovery will be delayed until after the death of the surviving spouse, if any, and if: a) A sibling is lawfully living in the home and was lawfully residing continuously in the home for at least one year immediately prior to the claimant being admitted to the medical institution; or If there is a son or daughter of the Medicaid recipient who is and has been residing in the home for at least two years immediately before the date of the individual’s admission to the institution, and has been residing there on a continuous basis since that time. The son or daughter would have to establish to the Alabama Medicaid Agency’s satisfaction that they were providing care which permitted the individual to reside at home rather than in a medical institution.