Kentucky Medicaid Estate Recovery

Recovery is generally blocked or delayed for: Surviving spouse: recovery shall not be made from the estate if the estate representative verifies to the department's satisfaction that there is a surviving spouse (907 KAR 1:585 Section 3(1)(a)); the regulation states this as an outright bar on recovery while a spouse survives, not a deferral; Child under 21: recovery shall not be made from the estate if there is a surviving child, defined to include a living child under age 21 (907 KAR 1:585 Section 3(1)(b) and Section 1(11)); Blind or disabled child: recovery shall not be made from the estate if there is a surviving child who is blind or disabled as defined in 42 U.S.C. 1382c, regardless of the child's age (907 KAR 1:585 Section 3(1)(b) and Section 1(11)); Undue hardship: the department shall waive recovery to the extent it would work an undue hardship, which exists when the asset subject to recovery is the sole income-producing asset (for example a family farm or business) conveyed to a surviving recipient family member (spouse, child, or sibling); the estate representative must make a written request within 30 days of the notice of intent to recover, a denial may be appealed under KRS Chapter 13B, and no hardship is found if the recipient illegally divested assets to avoid recovery (907 KAR 1:585 Section 3(3)); Long-term care partnership insurance: no recovery from resources protected by a qualified long-term care partnership insurance policy (907 KAR 1:585 Section 3(2)); Not cost effective: no recovery when the estate's date-of-death value subject to recovery is $10,000 or less, or is less than the administrative cost of recovery (907 KAR 1:585 Section 3(4)); Heir education or health care needs: the department may grant a case-by-case exemption up to the anticipated cost of the continuing education or health care needs of an estate heir on written request and verification (907 KAR 1:585 Section 3(5)).

Kentucky seeks recovery from the estate of a deceased Medicaid recipient for the Medicaid the program paid during a period of institutionalization (907 KAR 1:585 Section 2). The recoverable amount is the Medicaid paid on behalf of a recipient age 55 or older who received nursing facility (NF), intermediate care facility for individuals with an intellectual disability (ICF-IID), home and community based (HCB) waiver, supports for community living (SCL), acquired brain injury (ABI) waiver, ABI long-term care waiver, or Michelle P. waiver services, plus related prescription drugs, hospital services, and physician services, Medicare cost sharing or Medicare premiums, and capitation payments the program made to a managed care organization on the recipient's behalf. Recovery cannot exceed the amount Medicaid actually paid for the period of institutionalization. Because the regulation limits recovery to the period of institutionalization, Kentucky does not recover the recipient's total lifetime Medicaid spend the way an all-services state does. Kentucky uses an EXPANDED estate definition (907 KAR 1:585 Section 1(3)): the recoverable estate is not only probate property but also all real and personal property or other assets in which the recipient held legal title or interest at death, to the extent of that interest, whether the asset passed to a survivor, heir, or assign through joint tenancy, tenancy in common survivorship, life estate, living trust, or other arrangement. The regulation does not state a Medicaid-specific claim-filing deadline; the program pursues its recovery as a claim against the estate and, for probate assets, is subject to the general Kentucky creditor-claim timing under KRS Chapter 396.

Yes. Kentucky offers an undue-hardship waiver. Contact Kentucky Medicaid Estate Recovery Program, Cabinet for Health and Family Services, Department for Medicaid Services, Division of Program Integrity, Third Party Liability Branch at 502-564-4958 to request the waiver and ask about deadlines.

Kentucky Medicaid Estate Recovery Program, Cabinet for Health and Family Services, Department for Medicaid Services, Division of Program Integrity, Third Party Liability Branch, phone 502-564-4958, https://www.chfs.ky.gov/agencies/dms/dpi/tpl/Pages/estaterecovery.aspx.