In a closely watched estate recovery case, the Nevada Supreme Court rules that liens may be imposed on the homes of the surviving spouses of Medicaid recipients, but that the liens must be lifted if the surviving spouse wishes to sell the home or engage in any other legitimate transaction. Nevada Dep't of Human Resources v. Ullmer (Nev., No. 40143, April 1, 2004).
Harold Ullmer received Medicaid benefits to pay for his nursing home care from 1997 until his death in 2001. Following Mr. Ullmer's death, his wife, Agnes, received a letter notifying her that the state was seeking to impose a lien on her home. Because of her declining ability to care for herself, Mrs. Ullmer had planned to sell the home and use the proceeds to help pay the cost of an assisted living facility. A lien would effectively trap her in a home she could no longer safely live in.
Las Vegas elder law attorney James O'Reilly took on Mrs. Ullmer's case and made her the lead plaintiff in a class action lawsuit charging that Nevada's practice of placing liens on the homes of the surviving spouses of Medicaid recipients violates federal law. Mrs. Ullmer argued that placing a lien on a home constitutes "recovery" of Medicaid costs before the death of the surviving spouse, a violation of federal law. O'Reilly was aided by Rochelle Bobroff, a Washington, D.C., attorney for AARP.
Prior to class notification, the state district court granted Mrs. Ullmer's motion for issuance of a permanent injunction seeking declaratory and injunctive relief to prevent the Department of Human Resources from obtaining liens against class members and to remove existing liens. The Department appealed.
The Supreme Court of Nevada rules that the state may place liens on the homes of surviving spouses of Medicaid recipients, finding nothing to indicate that imposing a post-death lien is an impermissible "recovery." But the court also holds that Nevada's liens are deficient in their current form and so affirms the district court's entry of a permanent injunction against the liens as presently constituted. The court rules that the state's lien must make clear two things: that it applies only to the Medicaid recipient's half of the property, and that it will be released "upon the surviving spouse's demand for any bona fide transaction, including, but not limited to, selling the property, refinancing the property, and obtaining a reverse mortgage."
Filing amicus briefs in the case were the National Citizens Coalition for Nursing Home Reform, the National Academy of Elder Law Attorneys, the National Senior Citizens Law Center, and the National Health Law Program.
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