LIENS UNDER MEDICAID

Clients suffer from a great deal of confusion about when liens may be imposed on the property and assets of a person applying for Medicaid. Understand, that the issue does not surface all that often because in good planning, all of the assets should be transferred from the Medicaid recipient to others or a trust. Sometimes that option, though, is not available. So lets review the rules.

If Medicaid provides benefits incorrectly and a court of law confirms that improper payment, the assets of the applicant may be immediately liened. That's generally because the applicant has engaged in improper conduct such as the submission of a false application.

If payments have been correctly made (which is the usual case), a lien may be placed against the real property of the individual when the individual is in a nursing home and the agency determines that the individual cannot reasonably be expected to be discharged or returned home. The burden is on the agency to prove that the individual is not reasonably expected to return home.

BUT, no lien may be placed on the real property if it is a home and one of the following people resides in the home: a spouse, a child under age 21, a blind child, a totally and permanently disabled child. Also no lien may be placed if a sibling who has an equity interest in the home has resided in the home for at the one year period prior to institutionalization. Note: A lien may be placed on the home even if an adult child has lived in the home for at least the two year period prior to institutionalization and has provided care to the applicant for Medicaid which allowed the applicant to delay going into a nursing home.

If a lien was placed on the home and the individual returns home, the lien must be vacated.