P13032, Wisconsin Estate Recovery Program Handbook

Wisconsin Department of Health Services

Division of Medicaid Services

P-13032 (08/2021)

Wisconsin

Estate Recovery

Program Handbook

You are getting this handbook because you are a Medicaid or

BadgerCare Plus member who may get services that are

subject to estate recovery. This includes members who are:

• Enrolled in long-term care services and living in an

institution.

• Enrolled in a full-benefit Medicaid plan and age 55 or

older.

Questions?

Call Member Services at 800-362-3002, 711, or 800-947-3529

(TTY) for translation or help understanding this handbook.

Spanish – Si necesita ayuda para traducir o entender este

texto, por favor llame al teléfono 800-362-3002,

711 o 800-947-3529 (TTY)

Russian – Если вам невсё понятно вэтом документе,

позвоните по телефону 800-362-3002, 711 или

800-947-3529 (TTY)

Hmong – Yog xav tau kev pab txhais cov ntaub ntawv no kom

Koj totaub, hu rau 800-362-3002, 711 los sis

800-947-3529 (TTY)

Table of Contents

Estate Recovery Program ................................................. 1

Introduction ..................................................................... 1

What is the Estate Recovery Program? ........................... 1

Which members and programs are affected by the

Estate Recovery Program? .............................................. 2

Which members are not subject to the Estate

Recovery Program? ......................................................... 5

How does DHS recover the cost of benefits? .................. 5

When does DHS not recover benefits? ........................... 7

Probate Estates ............................................................. 10

How does DHS recover the cost of benefits through

estates? .......................................................................... 10

When can DHS file a claim in an estate, and what

constitutes the claim amount? ...................................... 11

How and when will a claim in an estate be paid? ......... 12

Are the heirs allowed to keep anything from the

member’s estate? .......................................................... 13

Are there situations when DHS’s estate claim will not

be paid or payment will be delayed? ............................ 13

How does DHS file a claim in a probate proceeding in

a court? .......................................................................... 15

Recovery of Non-Probate Assets after the Member’s

Death ............................................................................ 16

Marital Property ............................................................ 17

Recovery by Affidavit of the Administrator ................... 18

When can and can’t DHS recover the cost of benefits

by use of an affidavit of the administrator? .................. 18

How does DHS recover benefits by use of an affidavit

of the administrator? .................................................... 18

Waiver of Claims Due to Hardship ................................. 20

Are there any exemptions if recovery would cause a

hardship to an heir or beneficiary? ............................... 20

Liens for Medicaid Hospital and Nursing Home

Residents (TEFRA Liens) ................................................. 22

What is a lien and what effect does it have? ................ 22

When can DHS file a lien on a home? ........................... 22

When will payment of a lien be made? ......................... 23

What constitutes the amount paid by a lien? ............... 24

Glossary of Terms .......................................................... 25

For Further Information ................................................. 31

Estate Recovery Program

Introduction

This handbook provides information about the Wisconsin Estate

Recovery Program. It includes who and what programs are

affected, how the recovery from an estate is made to collect

repayment for certain services, and situations where repayment

may not be recovered from an estate.

Members enrolled in Wisconsin Medicaid, BadgerCare Plus, the

Wisconsin Chronic Disease Program (WCDP), the Community

Options Program (COP), or non-Medicaid Family Care may be

affected by the Estate Recovery Program.

Some of the terms used here have been defined in the glossary at

the back of this handbook. If you need help to understand any of

this information, call Member Services at 800-362-3002.

What is the Estate Recovery Program?

The Wisconsin Estate Recovery Program seeks repayment for the

cost of certain long-term care services paid for on behalf of

members by Medicaid, BadgerCare Plus, COP, or non-Medicaid

Family Care or any services provided by WCDP. Recovery is made

from the estates of members, from the estates of their surviving

spouses, from certain non-probate property, and from liens filed

on their homes. Recovery is made after the assets of the member

have been accounted for and higher priority expenses have been

paid as described in state law (Wis. Stat. § 859.25).

The money recovered is returned to the programs and used to

pay for care for other members. Long-term care services for which

the program seeks repayment include, but are not limited to,

nursing home services and home care services. These services are

listed in detail below.

Note: Members who are age 55 or older, living in the community,

and not getting services related to long-term care or any services

through WCDP, are not subject to estate recovery.

Wisconsin is required by state and federal laws to recover the

costs of certain benefits paid for on behalf of health care

members. These laws are designed to recover assets from those

who got benefits.

Which members and programs are affected by the

Estate Recovery Program?

 Medicaid and BadgerCare Plus members:

• Of any age who live in nursing homes may have the cost

recovered for all benefits that were paid by Medicaid or

BadgerCare Plus while they lived in a nursing home. In

addition to recovery from estates and from non-probate

property, recovery is also made by filing liens against

homes of Medicaid or BadgerCare Plus members. For

more information on liens, see the Liens for Medicaid

Hospital and Nursing Home Residents (TEFRA Liens)

section on page 22.

• Of any age who got inpatient hospital benefits and who

are considered institutionalized members may have the

cost recovered for all benefits paid by Medicaid or

BadgerCare Plus programs that were received during such

stays. Institutionalized members are members who have

been, or are expected to be, inpatients in a hospital for 30

or more days and who are required to pay their monthly

income toward their cost of care. In addition to recovery

from estates and from non-probate property, recovery is

also made by filing liens against homes of Medicaid or

BadgerCare Plus members. For more information on liens,

see the Liens for Medicaid Hospital and Nursing Home

Residents (TEFRA Liens) section on page 22.

• Age 55 or older may have the cost recovered for certain

benefits received while they lived in the community,

including:

o Skilled nursing services

o Home health aide services

o Home health therapy and speech pathology services

o Private duty nursing services

o Personal care services

• Age 55 or older who reside in the community may have

the cost recovered for all benefits they got while

participating in the following long-term care programs:

o COP Waiver

o Community Integration Programs IA, IB, and II

o Brain Injury Waiver

o Community Supported Living Arrangements

o Community Recovery Services

o Family Care

o Family Care Partnership

o Include, Respect, I Self-Direct (IRIS)

o Program of All-Inclusive Care for the Elderly (PACE)

For members getting long-term care program services

through a managed care organization (MCO), the monthly

capitation payment made to the MCO will be recovered.

The capitation payment is the amount the state pays to

the MCO each month, and this amount is what the state

recovers from the member.

 WCDP members of any age may have the cost of all benefits

paid by WCDP recovered.

 COP participants who are age 55 and older may have the cost

of benefits paid by COP recovered.

 Non-Medicaid Family Care members may have the actual cost

of services as reported to the Department of Health Services

(DHS) recovered for any enrollee who is:

• Age 55 or older and living in the community.

• Any age who lives in:

o An inpatient hospital and is required to contribute to

the cost of care.

o A nursing home.

Any person who gets all or a combination of the services listed

above may have the cost of those services recovered from his or

her estate or the estate of his or her surviving spouse, from non-

probate property, or through a lien.

Which members are not subject to the Estate Recovery

Program?

• A Medicaid or BadgerCare Plus member who is 55 or older,

living in the community, and not getting services related to

long-term care will not be affected by estate recovery.

• A member participating in a Medicare Savings Program.

Medicare premium payments and any Medicare cost sharing

or coinsurance costs paid by the Qualified Medicare

Beneficiary program are not recoverable.

How does the Estate Recovery Program recover the

cost of benefits?

The Estate Recovery Program uses claims in probated estates,

affidavits in small sum estates and non-probate assets, and liens

to recover the cost of Medicaid, BadgerCare Plus, WCDP, COP,

and non-Medicaid Family Care benefits.

The Estate Recovery Program seeks repayment by filing claims in

probate estates to recover the cost for community-based services,

services gotten while participating in a long-term care program,

services gotten while a member lived in a nursing home, services

gotten while a member was considered an institutionalized

member in an inpatient hospital, and WCDP services. If the

member’s estate includes real property, the Estate Recovery

Program may, in certain circumstances, file a lien on the property

rather than get immediate repayment. For more information on

these types of liens, see the Probate Estates section regarding

“Are there situations when the Estate Recovery Program’s estate

claim will not be paid or payment will be delayed?” on page 13.

An affidavit of the administrator is used to file claims in estates

valued under $50,000 and to recover non-probate assets. As part

of this process, liens may be filed on real property to secure the

Estate Recovery Program’s claim.

Liens may also be filed on homes of Medicaid members who live

in inpatient hospitals and are required to contribute to their cost

of care or who live in nursing homes. Liens are filed only when

members are not expected to return to their homes to live. For

more information on these types of liens, see the Liens for

Medicaid Hospital and Nursing Home Residents (TEFRA Liens)

section on page 22. Liens are never filed on the homes of COP

and/or WCDP participants during their lifetime.

When does the Estate Recovery Program not recover

benefits?

The Estate Recovery Program will not seek recovery of any

benefits from a member’s property while the member’s spouse, a

minor child under age 21, or a disabled or blind child of any age

survives the member. However, if the member’s estate property

or non-probate property includes real property, the Estate

Recovery Program will file a lien. Repayment from the lien will be

delayed until after the death of the surviving spouse, any minor

(under age 21) children, and any children who are blind or have a

disability. Although the Estate Recovery Program may file a lien on

the real property of a surviving spouse, or any minor child,

disabled, or blind child of a member, if the spouse or child sells

that property for fair market value during their lifetime, the Estate

Recovery Program will release its lien, and no repayment will be

made.

There are similar protections in the lien portion of the program

that apply to nursing home and hospital inpatient residents. DHS

may only file a lien on the home of a member who lives in a

nursing home or in an inpatient hospital. In addition, DHS may not

file a lien on the home of a nursing home or hospital resident if

there is a spouse or minor, disabled, or blind child of any age

residing in the home. DHS will not file a lien on the home of a

member living in the community. For more information on liens,

see the Liens for Medicaid Hospital and Nursing Home Residents

(TEFRA Liens) section on page 22.

The Estate Recovery Program may not recover:

• Personal property (furniture, jewelry, appliances, etc.) until

sold.

• Cash donated or given to the family after the member’s death,

such as memorial money.

Certain income, property, and resources of Native Americans and

Alaska Natives are exempt from estate recovery. These are:

• Income and resources held in trust status.

• Trust or non-trust property located within or near a current or

prior federally recognized reservation, pueblo, or colony; or

other geographic areas designated by the Bureau of Indian

Affairs (BIA) Secretary.

o Other geographic areas are service areas for tribes

where the BIA provides financial assistance and social

services programs to tribal members.

o Exemptions apply only to a tribal member’s primary

residence or homestead.

• Income and resources derived from reservation land. This

includes income from rents, leases, usage rights, and natural

resources (the origins must be able to be clearly traced to

tribal land).

• Government reparation payments.

• Anything not included above that has unique religious,

spiritual, traditional, and/or cultural significance that support

survival or a traditional lifestyle according to tribal law or

custom.

Exempt non-trust property is protected when it is passed down

from a Native American to a relative. It is not necessary for the

relative to be a tribal member in order for this non-trust property

to be exempt.

Certain assets are also exempt from estate recovery for members

who have long-term care insurance policies that qualify under the

Wisconsin Long-Term Care Insurance Partnership (LTCIP) program.

LTCIP is a joint effort between the federal Medicaid Program,

long-term care insurers, DHS, and the Wisconsin Office of the

Commissioner of Insurance. The program’s main purpose is to

provide an incentive for people to plan for meeting their future

long-term care needs, whether in a community-based setting,

such as their own home, or in a nursing home.

The amount paid out by a qualified LTCIP policy on or after

January 1, 2009, is not counted toward the Medicaid asset limit

for eligibility, nor is it recoverable under the Estate Recovery

Program.

More information on LTCIP can be found on DHS’s website at

www.dhs.wisconsin.gov/em/ltcip.htm.

Probate Estates

How does DHS recover the cost of benefits through

estates?

A member’s estate includes all assets owned by the member at

the time of death, including, but not limited to, any solely owned

savings or checking accounts, stocks, savings bonds, and real

property. Any assets that become part of the estate after the

death of the member are also subject to the Estate Recovery

Program, including, but not limited to, refunds, inheritances, and

proceeds from certain life insurance policies, annuities, or death

benefits that are payable to the estate. See the Recovery of Non-

Probate Assets after the Member’s Death section on page 16 for

more information about non-probate property, such as life

insurance payable to living beneficiaries and savings or checking

accounts that are jointly-owned or payable on death to a

beneficiary.

The legal process known as probate settles an individual’s estate

by distributing the estate to creditors, heirs, and beneficiaries.

Creditors file claims in estates to ensure payment of a debt owed

to them. By law, DHS is paid before most other creditors. DHS and

other creditors are paid before any assets are distributed to heirs

or beneficiaries, whether or not there is a will.

There are two ways in which DHS recovers benefits through

estates. When probate is proceeding through a court, DHS will file

a claim for payment with the court and with the individual

handling the estate. When there is no court proceeding, DHS

generally recovers benefits by filing a claim for payment with the

individual handling the estate who uses an alternative statutory

process called transfer by affidavit. For more information, see the

Recovery by Affidavit section on page 18.

When can DHS file a claim in an estate, and what

constitutes the claim amount?

DHS can file a claim in the estate of a member or the member’s

surviving spouse if the member received care paid for by

Medicaid or BadgerCare Plus in any or all of the following

situations:

• While the member resided in a nursing home. The claim

amount is for the cost of all services received while residing in

a nursing home that was paid for by Medicaid or BadgerCare

Plus.

• While the member was an inpatient in a hospital for a period

of 30 days or longer and was required to pay a patient liability

amount. The claim amount is for the cost of all Medicaid or

BadgerCare Plus covered services received while an inpatient.

• While the member was age 55 or older and resided in the

community. The claim amount is for the cost of Medicaid and

BadgerCare Plus covered home health services, private duty

nursing services, and personal care services received.

• For members age 55 and older participating in a long-term

care program. The claim amount also includes all Medicaid

and BadgerCare Plus services received while participating in

the program.

• For Medicaid and BadgerCare Plus members age 55 and older

receiving long-term care program services through a managed

care organization (MCO). The monthly capitation payment

made to the MCO will be recovered.

DHS can also file a claim in the estate of the member or the

member’s surviving spouse, to recover WCDP, COP, and non-

Medicaid Family Care benefits.

How and when will a claim in an estate be paid?

DHS’s claim will usually be paid by the personal representative of

the estate according to standard probate procedures. DHS’s claim

is paid after certain other expenses. Costs paid before DHS’s claim

are:

• Costs of administering the estate, including attorney fees.

• Reasonable funeral costs.

• Costs of the last illness, if any, that were not paid by Medicaid,

BadgerCare Plus, or WCDP.

If there are insufficient assets in the estate to pay DHS’s claim in

full, DHS is paid what is available after allowable expenses, and

the recovery is ended for the assets that have been disclosed. This

applies to both claims in court probate proceedings and to DHS’s

recoveries using affidavits.

Are the heirs allowed to keep anything from the

member’s estate?

Yes. In the recovery of a claim against an estate, the court allows

the heirs and beneficiaries to retain up to a total of $5,000 in

value of the following personal property:

• The decedent’s wearing apparel and jewelry held for personal

use.

• Household furniture, furnishings, and appliances.

• Other tangible personal property not used in trade,

agriculture, or other business, not to exceed $3,000 in value.

Note: This does not allow heirs to retain liquid assets (cash or

assets readily convertible to cash), only personal property.

Are there situations when DHS’s estate claim will not

be paid or payment will be delayed?

Yes, DHS’s claim will not be paid if any of the following exist:

• A surviving spouse.

• A child under age 21.

• A disabled or blind child of any age.

However, if there is a surviving spouse, a child under age 21, or a

disabled or blind child of any age and there is an ownership

interest in real property in the member’s estate, payment will be

delayed because a lien will be filed on the real property on behalf

of DHS. A lien filed during probate will not require repayment as

long as the surviving spouse, a child under age 21, or a disabled or

blind child of any age lives.

Note: DHS will file a lien on the real property of a surviving

spouse, a child under age 21, or a disabled or blind child of any

age of a member. But if the surviving spouse, child under age 21,

or disabled, or blind child sells that property for fair market value

during their lifetime, DHS will release its lien, and no recovery will

be made.

Payment of DHS’s claim may also be delayed in other instances.

DHS will file a lien for recording a full or partial satisfaction of its

estate claim if there is a home in the estate and any of the

following resides in the home:

• A son or daughter of the member who continuously lived in

the home beginning at least 24 months before the member

began receiving nursing home services or services provided

while considered institutionalized in an inpatient hospital or

home and community-based waiver services and who

provided care to the member that delayed the member’s

receipt of such services.

• A brother or sister of the member who continuously lived in

the home beginning at least 12 months prior to the member

receiving nursing home services or services provided while

considered institutionalized in an inpatient hospital or home

and community-based waiver services.

DHS may recover on these liens when the caretaker child, brother,

or sister dies or sells/transfers the home.

The filing of a lien through an estate may be done for nursing

home members, institutionalized inpatient hospital members, and

community-based members. The reason is that this type of lien is

a result of an estate claim.

How does DHS file a claim in a probate proceeding in a

court?

When an estate is being probated through a court proceeding, the

personal representative or attorney handling the estate is

required to notify DHS of the estate proceeding and of the time

period in which a claim may be filed. DHS then calculates the

amount of its claim and submits the claim to the court with a copy

sent to the personal representative or the attorney.

The personal representative is responsible for the administration

of the estate. The personal representative must make an

inventory of the assets in the estate and determine what claims

the estate must pay. Claims must be paid according to standard

probate laws and procedures.

What is the transfer by affidavit process?

The transfer by affidavit process can be used to close a person’s

estate when the deceased has $50,000 or less in assets subject to

administration in Wisconsin. It is an alternative to using a court

process for small estates. If this process is used, an heir, guardian,

or trustee of a revocable trust created by the deceased may

collect the deceased’s assets by submitting a transfer by affidavit

to the person, institution, or entity possessing those assets.

By accepting the deceased’s assets, the heir, guardian, or trustee

assumes a duty to pay the deceased’s obligations under the

priority of claims established by state law and to distribute any

remainder to the appropriate heirs and beneficiaries. If an heir,

guardian, or trustee submits a transfer by affidavit to a person,

institution or entity, he or she must send a copy to DHS if the

deceased received any Medicaid, BadgerCare Plus, WCDP, COP, or

non-Medicaid Family Care benefits. If real property is being

transferred through the use of a transfer by affidavit, DHS may file

a lien on the property. The lien would be satisfied at the time the

property is sold.

Recovery of Non-Probate Assets after the

Member’s Death

The types of recoverable assets DHS can pursue for repayment on

behalf of a member include all property in which the member had

an interest in immediately before death. This includes property

that passes outside a person’s probated estate, including assets

transferred through joint tenancy, survivorship, life estate,

revocable trust, or other arrangement.

DHS will recover from jointly-owned and payable-on-death

checking and savings accounts at financial institutions, no matter

when the accounts were established.

DHS will recover from life estates, joint tenancy property (other

than checking and savings accounts), life insurance policies

payable to a living, named beneficiary, and revocable trusts that

were established on or after August 1, 2014. This applies to

recovery of these types of property after the death of the

member.

DHS will not recover for the following created prior to August 1,

2014:

• Life estates

• Joint tenancy property (other than checking and savings

accounts)

• Life insurance payable to a living, named beneficiary

• Revocable trusts

All other types of non-probate property will be subject to

repayment for members who pass away on or after August 1,

2014.

An affidavit of the administrator will be used to recover non-

probate property. Liens may also be filed on non-probate real

property to secure DHS’s claim.

Marital Property

DHS will file a claim in the estate of a member’s surviving spouse.

Repayment will be made from 50 percent of the marital property

in the surviving spouse’s estate.

Recovery by Affidavit of the Administrator

When can and can’t DHS recover the cost of benefits by

use of an affidavit of the administrator?

DHS can submit an affidavit of the administrator to any person,

institution, or entity possessing the property of a deceased

member to recover the cost of benefits. The affidavit states DHS’s

legal claim to the remaining property of the deceased and

explains the rights of heirs, beneficiaries, and co-owners. DHS

uses its affidavit to recover from estates under $50,000 and to

recover non-probate assets.

DHS does not use an affidavit to recover when there is a surviving

spouse, a minor child (under age 21), or a disabled or blind child

of any age and the member’s property (either estate property or

non-probate property) does not include real property.

DHS also does not use an affidavit to recover against wearing

apparel, jewelry, household furniture, furnishings, and appliances

with a total value less than $5,000.

How does DHS recover benefits by use of an affidavit of

the administrator?

In estates under $50,000 that are settled by use of a transfer by

affidavit, DHS will send its affidavit of the administrator to the

heir, guardian, or trustee presenting DHS’s claim. Normally, DHS

allows the heir, guardian, or trustee to receive the property of the

deceased. The heir, guardian, or trustee can then use the property

to pay any reasonable funeral costs, costs of administering the

estate, and related attorney fees. Any property remaining after

those expenses are paid must be paid to the DHS. Invoices,

receipts, and canceled checks of the expenses must be kept and

copies sent to DHS. Any medical bills (including those from

ambulance companies) should not be paid until after the charges

are reviewed and approved by the Estate Recovery Program.

Upon transferring all the remaining funds to DHS, the heir,

guardian, or trustee is released from any obligation to other

creditors or heirs of the deceased for the property transferred to

the heir, guardian, or trustee by the use of the affidavit.

For non-probate property, DHS will use similar procedures. DHS

will send its affidavit of the administrator to the co-owners and

beneficiaries of a member’s non-probate property.

Co-owners and beneficiaries have the right to request a fair

hearing on the value of the member’s interest in the property.

The value of the member’s interest for jointly owned property is

the percentage interest attributed to the member when eligibility

for assistance was determined or, if not determined at eligibility,

the fractional interest the member had in the property at his or

her death. For life estate interests, the value is the percentage of

ownership based on the member’s age at the date of death,

according to the life estate tables used for Medicaid eligibility.

The value of the property is the fair market value. Fair market

value is the price a willing buyer would pay to a willing seller for

purchase of the property. It is the co-owners’ or beneficiaries’

responsibility to establish that value through a credible method,

such as an appraisal by a licensed appraiser.

When real property is included in the non-probate property, DHS

can file a lien on the property.

The lien protections for a surviving spouse or minor, disabled, or

blind child in the affidavit process are the same as for liens filed in

probated estates.

Waiver of Claims Due to Hardship

Are there any exemptions if recovery would cause a

hardship to an heir or beneficiary?

DHS has set standards in Wis. Admin. Code § DHS 108.02(12) for

determining whether DHS’s recovery would result in an undue

hardship for an heir, beneficiary, or co-owner. An heir,

beneficiary, or co-owner may apply for a waiver of the DHS’s

claim on their portion of the estate for one of the following

reasons:

• The heir, beneficiary, or co-owner would become or remain

eligible for Supplemental Security Income (SSI), FoodShare,

BadgerCare Plus, or Medicaid if DHS pursued its claim.

• The deceased’s estate contains real estate used as part of the

heir, beneficiary, or co-owner’s business, which may be, but is

not, limited to a working farm, and recovery by DHS would

affect the property and would result in the heir, beneficiary,

or co-owner losing his or her means of a livelihood.

• The heir, beneficiary, or co-owner is receiving general relief or

veterans benefits based on need under Wis. Stat. § 45.40(1m).

The person handling the estate will be notified of these rights and

how an heir or beneficiary may apply for a hardship waiver when

the estate is being probated through a court or through an

affidavit process. That individual is responsible for notifying the

heirs and beneficiaries of these rights. An heir or beneficiary can

apply to DHS for a waiver of the recovery of his or her portion of

the estate.

In the case of non-probate property, the co-owners or

beneficiaries of the property will be notified of their rights and

how to apply for a hardship waiver. Only co-owners or

beneficiaries of the member’s non-probate property are eligible

to apply for a hardship waiver of their share in the non-probate

property. Other heirs or beneficiaries of the member’s probate

property cannot apply for a hardship waiver of non-probate

property because they have no inheritance or survivorship rights

in the property. They only have an interest in property that passes

through the member’s estate.

Liens for Medicaid Hospital and Nursing Home

Residents (TEFRA Liens)

What is a lien and what effect does it have?

A lien is evidence of a debt or obligation that is filed against a

particular piece of real property with the Register of Deeds in the

county where the property is located. It is similar to a mortgage in

that it represents a debt that must be satisfied when the property

is sold. It does not affect the ownership of the property. It does

not require the member to sell his or her home.

When can DHS file a lien on a home?

Under some circumstances, DHS may file a lien on the home of an

inpatient hospital resident who is required to contribute to the

cost of care or of a nursing home resident who is not reasonably

expected to return home. DHS cannot file a lien on the home of a

member in the community.

Liens are filed when the member has an ownership interest in the

home. The member has an interest when the home is solely

owned, owned with a spouse, owned jointly with someone other

than the spouse, owned with a life estate interest, or owned by

the member’s revocable trust. For a life estate interest, a lien will

only be filed if the life estate was established on or after August 1,

2014. Liens will be filed on all other types of ownership interests

no matter when those interests were established.

Before filing a lien, the Medicaid program must notify the

member (or his or her responsible party) in writing and inform the

member of the right to an administrative hearing concerning the

lien process.

DHS may file a lien on the home of a hospital or a nursing home

resident only if the member cannot reasonably be expected to

return home and none of the following people reside in the home:

• The member’s spouse, a minor child (under age 21), or a

disabled or blind child of any age.

• A brother or sister of the member who has an ownership

interest in the home and has continuously lived in the home

beginning at least a year prior to the hospital or nursing home

admission of the Medicaid member.

If a lien is filed on the home, it must be removed if a member

returns home. If the member returns home, the Income

Maintenance worker or the member should contact DHS, and the

lien will be removed.

When will payment of a lien be made?

A lien will be paid when the home is sold. The lien is paid from the

sale amount after the costs of the real estate transaction are paid,

such as the realtor’s fee, any closing costs, and any mortgages on

the home that predate the Estate Recovery Program lien.

A lien will not be paid at the sale of a home, before or after the

member’s death, if the member has a living spouse or a minor

(under age 21), disabled, or blind child. In addition, a lien will not

be enforced after the member’s death as long as either of the

following resides in the home:

• A son or daughter of the member who continuously lived in

the home beginning at least 24 months before the member

was admitted to the hospital or nursing home and who

provided care to the member that delayed the member’s

admission to the hospital or nursing home.

• A brother or sister of the member who continuously lived in

the home beginning at least 12 months before the member

was admitted to the hospital or nursing home.

What constitutes the amount paid by a lien?

At the time a property is sold, a lien enables DHS to recover

specific amounts paid for by Medicaid. DHS may recover funds

for:

• All Medicaid services received while living in a nursing home.

• All Medicaid services received while a member is

institutionalized in an inpatient hospital.

• Home health care services received by members age 55 or

older consisting of:

o Skilled nursing services

o Home health aide services

o Home health therapy and speech pathology services

o Private duty nursing services

o Personal care services

• All services received by members age 55 or older participating

in a long-term care program (including COP Waiver,

Community Integration Programs IA, IB, and II, Brain Injury

Waiver, Community Supported Living Arrangements,

Community Recovery Services, Family Care, Family Care

Partnership, IRIS, and PACE).

• For members getting long-term care program services through

a managed care organization (MCO). The monthly capitation

payment made to the MCO will be recovered.

A lien only recovers for the amount paid by Medicaid for benefits

up to the date of sale. If more benefits are provided after the lien

is paid or if all of the benefits already provided were not payable

from the sale, DHS may file a claim in the member’s estate to

recover additional amounts.

Glossary of Terms

Affidavit of the Administrator

DHS can submit an affidavit of the administrator to any person,

institution, or entity possessing the property of a deceased

member to recover the cost of benefits. The affidavit states DHS’s

legal claim to the remaining property of the deceased and

explains the rights of heirs, beneficiaries, and co-owners. DHS

uses its affidavit to recover from estates under $50,000 and

recover non-probate assets.

DHS does not use an affidavit to recover when there is a surviving

spouse, a minor child (under age 21), or a disabled or blind child

of any age and the member’s property (either estate property or

non-probate property) does not include real property.

DHS also does not use an affidavit to recover against wearing

apparel, jewelry, household furniture, furnishings, and appliances

with a total value less than $5,000.

Capitation Payments

Capitation payments are based on a payment per member rather

than a payment per service provided. Managed care organizations

(MCOs) receive a fixed monthly payment for a member enrolled in

a health plan. If a member is enrolled in a long-term care

program, such as a home and community-based waiver program

or PACE, the MCO receives a monthly capitation rate payment for

each enrolled member.

Joint Property

There are two main types of joint property: (1) joint tenancy and

(2) tenancy in common. Under joint tenancy, if two people take

title of the property as joint tenants on a deed, each person has a

100-percent ownership of that piece of property. Regardless of

the number of joint tenants on a deed, each tenant has equal

ownership rights and interest. When one joint tenant passes

away, the surviving tenants automatically own the property. Joint

tenancy automatically gives each tenant a “right of survivorship”

where the surviving tenants receive 100 percent of the property.

When only one joint tenant remains living, he or she receives the

entire property, and the joint tenancy is dissolved.

Tenancy in common provides for multiple percentages of

ownership interest and inheritance rights for the heirs of each

tenant. These ownership percentages may be equal, such as

50/50, or unequal, such as 60/40. Unlike joint tenancy, tenancy in

common grants no “right of survivorship” to the other tenants.

Thus, no other tenant in common is entitled to receive a share of

the property when the tenant in common passes away; instead,

the percentage share of the property becomes part of the

deceased’s estate.

Life Estate

A life estate is created when a property holder transfers

ownership of the property to someone else (known as the

remainder and retains the right to reside in and benefit from the

real estate, such as getting rent. The life tenant’s percentage

interest is determined using the Medicaid life expectancy tables at

the time the life estate was created. The rest of the interest is

owned by the remainder (for example, a child or children). When

the life tenant passes away, the entire property interest passes to

the remainder. Recovery will be made from the life tenant’s

remaining interest at the time of death.

Long-Term Care Program

Long-term care programs include home and community-based

waiver programs, such as:

• COP – Waiver

• Community Integration Program(s) IA, IB, and II

• Brain Injury Waiver Program

• Community Supported Living Arrangements

• Community Recovery Services

• Family Care

• Family Care Partnership

• IRIS

• PACE

This is not a complete list of long-term care programs and may

change without notice.

Liens

A lien is evidence of a debt or obligation that is filed against a

particular piece of property with the Register of Deeds in the

county where the property is located. It is similar to a mortgage in

that it represents a debt that must be satisfied when the property

is sold. It does not affect the ownership of the property. It does

not require the member to sell his or her home.

The Estate Recovery Program uses two types of liens:

1. Pre-death liens are imposed on the homes of living Medicaid

members determined to be permanently institutionalized and

are not expected to return home to live. These types of liens

are called TEFRA liens since they must follow rules set out in

the federal Tax Equity and Fiscal Responsibility Act of 1982.

2. Post death liens, which are often part of the probate process.

Life Insurance Policy

A life insurance policy is a contract with an insurance company. In

exchange for premiums (payments), the insurance company

provides a lump-sum payment, known as a death benefit, to

beneficiaries in the event of the insured's death.

Marital Property

Marital property is property owned by a legally married couple. A

member’s ownership in marital property immediately before

passing away is limited to one-half. This is consistent with the

classification of property of spouses under state law

(Wis. Stat. § 766.31).

Medicaid

Medicaid is a joint federal-state program that provides health care

services to persons who have limited income and resources.

Wisconsin Medicaid is managed by DHS.

Non-Probate Property

Non-probate property is property that passes outside an

individual’s estate. This means that non-probate property does

not go through probate before it is transferred to those who

inherit it. Non-probate property includes, but is not limited to, life

estates, property held in joint tenancy, life insurance proceeds,

most property held in a trust, and property that is payable on

death or transfer on death to a beneficiary.

Probate

The legal process known as probate settles an individual’s estate

by distributing the estate to creditors, heirs, and beneficiaries.

Creditors file claims in estates to ensure payment of a debt owed

to them. The state is paid before most other creditors. Both the

state and other creditors are paid before any assets are

distributed to heirs or beneficiaries whether or not there is a will.

Revocable Trusts

A trust is a legal document in which a property interest is held by

one person for the benefit of another. Sometimes referred to as a

living trust, a revocable trust is created by an individual who

wants the ability to change the terms of his or her trust.

For Further Information

• Go to www.dhs.wisconsin.gov/medicaid/erp.htm.

• Contact your local agency; to find your local agency visit

www.dhs.wisconsin.gov/forwardhealth/

imagency/index.htm.

• Call Member Services at 1-800-362-3002 (voice) or 711 (TTY).

• Write to:

Department of Health Services

Estate Recovery Program

P.O. Box 309

Madison, WI 53701-0309

This publication is also available at