Disclaimer: This article is for educational purposes only and does not constitute legal advice.
Detailed Answer
Kentucky operates a Medicaid estate recovery program under federal law 42 U.S.C. § 1396p(b) and state law at KRS 205.854. Recovery claims typically attach to probate assets, including inherited property. The main steps include:
- Notice of Claim: After a Medicaid recipient’s death, the Kentucky Cabinet for Health and Family Services (CHFS) issues a written notice of claim. This notice informs the personal representative or executor that the state intends to file a claim against the estate.
- Filing the Claim in Probate: Under Kentucky probate rules (KRS 395.155–395.165), the CHFS must file its claim within the deadline for creditor claims, typically within six months of the first publication of notice to creditors or 30 days of delivery of notice, whichever is later.
- Asset Valuation: The estate’s personal representative values all assets, including real property, as of the decedent’s date of death. The Medicaid Estate Recovery Unit reviews these valuations to determine the lien amount.
- Order of Payment: Kentucky law prioritizes funeral expenses and administration costs first, and Medicaid claims are then paid before distribution to heirs (KRS 395.310).
- Settlement or Sale of Property: To satisfy the lien, the personal representative may sell the property or heirs may elect to redeem the property by paying the lien amount plus interest. Heirs can negotiate a payoff with CHFS to clear the title.
- Release of Lien and Distribution: Upon full payment, CHFS issues a release of lien. The personal representative then distributes proceeds to heirs or beneficiaries according to the decedent’s will or Kentucky probate laws.
Helpful Hints
- Act quickly. Respond to notices and file required documents before deadlines.
- Verify the claim amount by cross-checking Medicaid benefit records.
- Consult a probate attorney to guide you through valuation and sale processes.
- Explore repayment options or hardship waivers under 42 C.F.R. § 433.36.
- Understand your redemption rights to keep inherited property by paying the lien.
- Keep detailed records of all notices, appraisals, and settlement agreements.