A New York appeals court rules that a nursing home that had a claim against the guardianship account of a resident is entitled to reimbursement from the account before the state, which had a claim for Medicaid reimbursement against the resident’s estate. In re: Shannon (N.Y. Sup. Ct., App. Div., 1st Dept., No. 12218, 12219, 92560/08, June 17, 2014).
Eastchester Rehabilitation & Health Care Center applied for a guardian for resident Edna Shannon and also applied for Medicaid on her behalf. The court appointed a guardian, and the state granted Ms. Shannon Medicaid benefits. The nursing home filed a claim with the guardian for services provided Ms. Shannon that were not covered by Medicaid. The court approved the sale of Ms. Shannon’s home, and the money went into the guardianship account.
After Ms. Shannon died, the state filed a claim against her estate for reimbursement of Medicaid expenses. The nursing home argued its claim accrued before the state’s claim because the state did not have a lien against Ms. Shannon’s home. The state argued that it was a preferred creditor, and the trial court agreed. The nursing home appealed.
The New York Supreme Court, Appellate Division, reverses, holding that the nursing home is entitled to reimbursement from the guardianship account before any funds pass to the estate. According to the court, the state had a priority claim only against the estate, while the nursing home’s “claim accrued during the decedent's lifetime, against the guardianship account, with no competing creditors.” One justice dissents, arguing the state should have had priority.
For the full text of this decision, go to: https://www.nycourts.gov/reporter/3dseries/2014/2014_04452.htm
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