A fear that the government will seize their house after they die is causing some people to not sign up for expanded Medicaid...Read more
Medicaid Official's Misinformation Does Not Stop Estate Recovery
- March 8th, 2020
A Medicaid eligibility worker in the state of Wyoming incorrectly advised a Medicaid applicant that the applicant's home would be permanently exempt from estate recovery. Despite this misinformation, the Wyoming Supreme Court rules that the state may recover from the woman's estate following her death. Knori v. State (Wyo., No. 04-189, April 14, 2005
In early 1995, Richard Knori sought advice from Hazel Staley, a state "Medicaid Eligibility Technician," about helping his grandmother, Pansy Knori, qualify for Medicaid coverage of her nursing home care. Ms. Staley advised Mr. Knori that if his grandmother wished to preserve her family home, all she needed to do was to apply for Medicaid with the "intent to return home." If she did this, Ms. Staley said, her home would be exempt from recovery, both before and after her death. In fact, this advice was incorrect. In 1994, Wyoming had enacted legislation to conform to a federal law requiring states to recover from the estates of deceased Medicaid recipients (with certain restrictions), and Wyoming issued rules implementing the legislation in June 1995.
Relying on Ms. Staley's assurances, Mr. Knori assisted his grandmother with her Medicaid application and she received Medicaid benefits from April 1995 until her death in 2001. After Mrs. Knori's death, the Department of Health filed a claim against her estate '“ which included her home -- seeking reimbursement for Medicaid payments totaling $259,446. Mr. Knori fought the claim, arguing that the Medicaid agency had no right to be reimbursed after it had misled his grandmother into believing her home would be safe from recovery. A lower court sided with the Medicaid agency, and Mr. Knori appealed.
The Supreme Court of Wyoming upholds the lower court's ruling. In order to win, says the court, Mr. Knori had to prove that Ms. Staley acted intentionally or with "culpable negligence." Noting that Wyoming's rules regarding estate recovery changed about the same time that Ms. Staley was giving her advice, the court rules that the advice was neither intentional nor intended to deceive, but was simply based on outdated information. " . . . Knori was expected to know the law and could not act blindly on Staley's advice contrary to the law," the court writes. The court also holds that Mrs. Knori was not any worse off from Ms. Staley's mistaken advice than she otherwise would have been had she been forced to use her personal funds for her nursing care.
Moral of the story: Don't rely on the supposed expertise of Medicaid eligibility workers. Seek the advice of a qualified elder law attorney instead (and make sure that he or she carries professional liability insurance so that you have a remedy in case the attorney makes a mistake; all ElderLawAnswers members carry such coverage).
To download the full text of this decision in PDF format, go to: http://courts.state.wy.us/2005opn/2005WY48.pdf
Last Modified: 03/08/2020