Alaska Clarifies Time Limit on Medicaid Recovery Claims

Elder Law Answers case summary.The Supreme Court of Alaska holds that the state must bring a Medicaid reimbursement claim within four months after the estate representative publishes the notice to creditors because Medicaid reimbursement claims arise when the state provides services. In Re Estate of Abad In the Matter of the Estate of Boatner (Alaska Nos. S-18380, S-18450, December 22, 2023).

Federal law requires states to recover Medicaid expenses from recipients’ estates after they die. If there is a surviving spouse or children, the state may only make the claim after the spouse dies and after the children reach 21.

Per Alaska’s probate filing deadlines, the time creditors must file a claim against an estate depends on when the claim arose. For claims arising before the death, they have four months after the notice to creditors. But for claims arising at or after the death, they have four months after the claim arose, regardless of the date of the notice.

After a Medicaid beneficiary, Fe Perez Abad, passed away on August 19, 2020, his estate representative disseminated the creditors’ notice on October 19, 2020. On December 30, 2020, the state asserted a claim against the estate. The state claim occurred less than four months after the notice but more than four months after the death.

The estate argued that the claim was time-barred. According to the estate, the claim arose at the time of death. Under this reasoning, the state would have had to file the claim within four months after the death, and it had filed it too late.

Agreeing with the estate, the superior court held that the state failed to bring the claim in time because the claim originated when he died. The state appealed.

A similar set of circumstances happened after another Medicaid recipient, Sandra Lee Boatner, died. The state filed its claim less than four months after the estate published its first notice to creditors but more than four months after her death.

As in the previous instance, the estate argued that the state failed to file the claim in time. The state argued that it met the deadline because the claim arose on or after the death, giving the state four months after the notice to file.

A standing master recommended that the superior court adopt the state’s interpretation. The standing master reasoned that the claims arose during the decedent’s lifetime because they involved medical expenses she incurred during her life. The superior court agreed. Denying the estate’s motion for reconsideration, the superior court reasoned that the accrual date reflects the medical expenses during life. It further reasoned that the limitation on recovery until after death is merely a grace period to allow the recipient to live peacefully. Ms. Boatner’s estate appealed.

The Alaska Supreme Court consolidated the Abad and Boatner cases to resolve the question of when the state can seek reimbursement for Medicaid expenses. The highest court of Alaska evaluates the statutory text, legislative intent, and precedent from other jurisdictions.

The statutory text suggests that Medicaid recovery claims originate before death. The legislature provided that a claim may arise whether it is “due or to become due” and “absolute or contingent,” indicating that it could arise before becoming enforceable. The probate code includes contractual liabilities in its definition of a claim. State Medicaid recovery is analogous to a contract claim because the Medicaid recipient receives services in exchange for repayment after death.

The legislature intended for Medicaid recovery claims to arise before death. Although the legislature wanted speedy estate administration, treating state Medicaid claims as originating after death will not improve efficiency across all cases.

Treating Medicaid claims as arising before death would make it less expensive for the state to pursue recovery, as the state would have to incur costs in administering the estate rather than allowing the personal representative to provide notice. Giving the state notice ensures it is aware that the recipient died so that it can take advantage of the opportunity to recover.

The legislature prioritized Medicaid claims over other debt claims. Probate courts treat many other claims, such as those from doctors, lenders, or business partners, as arising before death. It follows that the legislature intended to give the state enough time to assert prioritized Medicaid claims.

Cases from other jurisdictions with probate filing deadlines similar to Alaska’s suggest that when a claim arises depends on the events, not when it becomes enforceable.

The Supreme Court of Alaska holds that Medicaid state recovery claims arise during the recipient’s lifetime; the state has four months after the notice to creditors to assert an action for recovery.

Read the full opinion.