Audit of the Office of Medicaid (MassHealth) - Review of Estate Recovery

This is a Massachusetts State Auditor performance audit of MassHealth’s estate recovery process for July 1, 2016 through December 31, 2018.

“OSA has conducted a performance audit of MassHealth claims for estate recovery for the period July 1, 2016 through December 31, 2018.”

Auditors wanted to know whether MassHealth protects low- and middle-income families from financial hardship when it tries to recover Medicaid costs from a deceased member’s estate.

“The purpose of this audit was to determine whether MassHealth ensures that estate recovery does not create undue financial hardships for low- and middle-income families.”

Estate recovery can take money or property value from a deceased MassHealth member’s estate, which can affect surviving family members.

“The resulting financial hardship could place a burden on families.”

If your family is affected by MassHealth estate recovery, the report says waiver rules and notices matter because they can determine whether survivors get relief from repayment claims.

“Estates that cannot pay MassHealth expenses because of limited resources, and that meet the eligibility requirements of Chapter 515.011(D) of Title 130 of the Code of Massachusetts Regulations (CMR), can apply for undue-hardship waivers.”

The auditor recommended that MassHealth stop pursuing claims that are not cost-effective and do a better job telling survivors about hardship waivers.

“MassHealth should establish a cost-effectiveness threshold to prevent undue financial hardship for members’ survivors.”

MassHealth said it had already changed its rules in May 2021 so estates worth $25,000 or less are exempt from estate recovery, and it expanded hardship waiver rules.

“MassHealth has already promulgated regulations that took effect on May 14, 2021, implementing a cost effectiveness threshold entirely exempting estates with a total value of $25,000 or less from estate recovery.”

During the audit period, MassHealth recovered nearly $96.6 million from 3,440 estates, with an average recovery of about $28,087, so this program affected many families and substantial money.

“During this period, MassHealth recovered $96,618,866 for Medicaid expenses paid by 3,440 estates.”

Estate recovery means MassHealth files claims in probate court after some members die to recover Medicaid costs it paid for them.

“MassHealth recovers funds by filing claims in probate court against deceased members’ estates for Medicaid expenses paid on their behalf.”