What is the Medicaid Estate Recovery Program and How Does it Work?

Before using Medicaid for long-term care, it’s essential to understand the impact and implications on a person’s estate entering long-term care. It is important to note each state has variations in laws related to estate recovery. Some states, such as Missouri, are considered “probate only” states, wherein the law is slightly different. Each state has its rules and regulations regarding the Medicaid Estate Recovery Program (MERP), so it’s essential to fully understand the details before long-term care.

What Is the Medicaid Estate Recovery Program (MERP)?

The Medicaid Estate Recovery Program, or MERP as it’s abbreviated, is Medicaid’s program wherein Medicaid can seek reimbursement for long-term care costs paid out to a Medicaid member’s beneficiary. Costs may include things such as nursing home care, community and home-based services, hospital care, prescription medications, and much more.

It’s also important to understand Medicaid cannot request more than the long-term care costs paid out. If the long-term care costs actually expended on a recipient totaled $200,000, for example, then Medicaid cannot seek more than $200,000 in their request to recoup the costs. The law is specific and is closely monitored and regulated to ensure only the actual cost of long-term care is recoverable through MERP. Of course, it is also possible for them to request other fees for services related to long-term care. Each case is examined closely and will be determined based on its actual costs.

A typical estate may include cash, savings and checking accounts, stocks and bonds, and other funds in a qualified income trust. All remaining funds and any irrevocable funeral trusts or items of value (including vehicles, RVs, boats, and homes) are often exempt from the asset limits while the recipient is still alive; however, upon their death, these assets are no longer exempt. Typically, although not always, life insurance policies are exempt from estate recovery if the beneficiary is named other than the estate.

medicaid estate recovery program

How Did the Medicaid Recovery Program Begin?

In 1993 the Omnibus Budget Reconciliation Act (OBRA) was put into effect for all states. The act requires every state to have a Medicaid estate recovery program to recoup funds paid out for long-term care for any person over 55 or older. For individuals under the age of 55, there is an exception. The exception indicates a care facility must permanently institutionalize the recipient. 

Before OBRA, each state made a discretionary determination on estate recovery for long-term care costs. The state where the recipient resides determines the rules on any attempt to recover long-term care costs. One such example is some states may try to recover costs other than long-term care.

While it may seem unfair to the heirs to give a portion of the estate to the MERP for the care of their loved one, the government put the process in place to help alleviate heirs having to repay Medicare for services rendered. Any funds collected through the Medicaid estate recovery program go back into the Medicaid program to cover the cost of care for other recipients. If the beneficiary is a spouse without any means to care for themselves, Medicaid cannot move forward with estate recovery until the beneficiary dies.

There are also specific guidelines regarding disabled children, blind children, children under the age of 21, siblings who have an equitable share in the estate, and an adult child who cared for the parent before the parent entered into long-term care their care and support.

disabled child

How Does Medicaid Estate Recovery Work?

All states must follow the laws related to Medicaid and the MERP in recouping funds paid for long-term care. Upon the death of a Medicaid recipient, Medicaid will send a letter to the estate’s executor or a beneficiary of the estate. The letter asks for reimbursement of the long-term care costs previously paid out to the deceased for their care at the long-term care facility. They may also request other fees related to the care of the person at the long-term care facility. The letter is to inform the family Medicaid intends to file their claim of repayment. It is against the law for the Medicaid agency to claim more than the amount paid out for long-term care.

Not every estate will go through probate. However, those who do will be subject to Medicaid estate recovery to reimburse Medicaid for the monies paid out for the decedent’s long-term care. It’s important to understand each state has different rules and regulations regarding MERP. Additionally, spouses and “tenants in common” are treated differently depending upon the state in which the decedent resided. Missouri, for example, is a “Probate Only” state. For those living in “probate only” states, specifics can help protect their assets for their heirs. Other states will have other laws wherein the laws are written and executed differently.

What Is the Recoupment Process?

Every state will try to recover monies for long-term care. Some states will also attempt to recoup funds for other healthcare expenses. States using Medicaid-managed care in place of paying directly for the medical needs may use the recoupment process to recover all or a portion of the money spent on long-term care services.

The state will first send a letter to the decedent’s beneficiary or executor of the estate detailing the recoupment process. At this point, there are a few options to ensure the estate remains intact. It is also legal for a state to recover costs via a living trust and avoid probate. There are many variables to consider, and each case and each state is slightly different.

estate recovery

Can Medicaid Put A Lien on Your Home?

Depending on the specific state’s policy, Medicaid may place a lien on any property the decedent owns. During the person’s lifetime, the state may determine it’s in the state’s best interest to place a lien on the person’s property to recoup their long-term care investment during the decedent’s lifetime. When the property is sold, before the decedent’s death or shortly after, the state will collect its portion of the lien from the sale proceeds just as any other lienholder would.

In a “Probate Only” state, this isn’t how it works. The laws are particular on what can and cannot have a lien placed upon it. The only way a lien would work here would be if the estate had to go through probate.

When are Assets and Estates Subject to MERP?

Every state will utilize MERP to recoup costs of long-term care Medicaid has paid out. There are many variables related to the program. Typically, the process begins with a letter to the executor or beneficiary of an estate detailing the MERP process and then attempting to recoup the costs paid out to long-term care. Any decedent age 55 or older and who resided in long-term care utilizing funding from Medicaid is subject to this process.

What Estates Are Exempt and How Can I Avoid Estate Recovery?

Sometimes, it is not possible to protect an estate. Other times, by utilizing advanced planning and with the aid of an elder law attorney or estate planning pro, it may be possible to shield some or all of the assets in the estate. If, in the future, the person requires Medicaid and Long-term care, a portion of the cost of the long-term care services may be able to be protected from an estate recovery process.

Additionally, a surviving spouse, a child under the age of 21, siblings who share in the estate, adult children who were caregivers to the parent for a specified amount of time, and other varying factors may also help protect the estate from the MERP. It is essential to fully understand each situation as these variables may change (the surviving spouse’s death, for example) the recovery process.

recouping long term care funds

How Often Is MERP Enforced?

Every state has a MERP and has to attempt the reimbursement process for all long-term care costs. Medicaid can enforce the MERP regardless of which state a long-term care recipient resides. However, it’s worthy of note to understand some extenuating circumstances wherein the state is not allowed to seek out reimbursement of the estate. These may change as the situation changes, so it’s imperative to keep that in mind when considering how to “save the estate. As children age and if the living spouse passes on, the circumstances would have changed and changed the entire situation. These specific circumstances can leave the MERP in a holding pattern may include any or several of the following specifics: 

  • A Spouse is still living and residing in the home.
  • The decedent has a child who is not yet 21 years of age.
  • The decedent has a child who is disabled per Social Security regulations (this includes blind children).
  • A brother or a sister has equity or ownership in the home and moved in at least one year before the decedent was in long-term care.
  • An adult child resides in the home, provides care for the parent, and resided there at least two years before the parent goes to a long-term care facility.

There are also exemptions for Alaska Natives and for Native Americans that are specific to their status. If the estate sale would cause undue hardship to the nature of a business or if the sale would leave the family member destitute, may utilize further exemptions to prevent the sale of the property to recoup the MERP.

protecting assets from estate recovery

How Can I Protect My Assets from MERP?

Those who wish to protect their estate and assets for their heirs should consult with an elder law attorney experienced in Medicaid law and probate laws in the specific state the recipient resides. States such as Missouri have “probate only” laws that may also make it a bit easier to protect one’s assets by working with an attorney to keep their assets out of probate. There are many contributing factors in protecting one’s assets from estate recovery. At Paths Elder Law, we have been working with seniors and their families to protect them from unforeseen issues due to aging. We have had the privilege to work with hundreds of Missouri residents in helping them to protect their future and their loved ones. If you or someone you know needs assistance navigating Medicaid eligibility, benefits, or estate recovery, contact us to schedule an appointment. We are here to help you secure your future.

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Community Relations

Jeane M. Fracassa

Community Relations

Jeane M. Fracassa

Jeane Fracassa – a dedicated and accomplished professional who retired with an impressive 38-year service record from the Kansas City Missouri Police Department. Throughout her illustrious career, Jeane served as a Civian Supervisor in the Communications Unit, where she played a pivotal role in ensuring efficient and effective communication within the department.

Even in retirement, Jeane’s commitment to community service remains unwavering. Currently, she serves in various capacities within Community Relations at Paths Law Firm. Actively engaged in the Lee’s Summit and Overland Park communities, she proudly represents the law firm.

In all aspects of her life, Jeane Fracassa exemplifies the values of community, compassion, and family. Her commitment to making a difference and her love for exploration make her a remarkable individual, whose presence brightens the lives of those she encounters. Whether at work, with family, or during her travels, Jeane’s genuine care for others and her zest for life make her a truly remarkable and inspiring person.

Administrative Assistant

Laura E. Messer

Administrative Assistant

Laura E. Messer

Laura is the Law Firm’s marketing assistant, supporting all marketing tasks, including managing calendars, researching upcoming events, updating marketing software and spreadsheets, and partnering with organizations to maintain relationships that benefit Paths Law Firm’s clients.  Laura is also the law firm’s professional photographer as she provides the professional photographs for the headshots, organizations, events, and networking.

Laura has over 10 years of experience as a professional photographer.  She is also Adobe and Microsoft Certified.  She graduated from Columbia College, Columbia, Missouri with her Bachelor of Arts degree, Magna Cum Laude, in Behavioral Psychology (minors in Social Work and Criminal Justice), and her Photographic Craftsman degree from Professional Photographers of America. She is certified as a Qualified Mental Health Professional, Certified Gentle Teacher, Medicaid Billing Certified, Crisis Intervention Counselor, and a Missouri Notary.

Laura has been married more than 26 years and has a daughter and a son. She has four brothers, a niece, and a nephew. Her four spoiled pets that love her attention. A lot of Laura’s off time is spent taking photos and she is an internationally published photographer. Laura owns a studio on the historic Independence Square. 

Administrative Assistant

Holly D. Bramble

Administrative Assistant

Holly D. Bramble

Holly is our newest member of the administrative team. She is hardworking, has proven organizational skills and excellent communication skills. Holly has transitioned to the Estate Planning field from healthcare administration where she gained valuable knowledge that has contributed to her success here at Paths.

Holly enjoys spending time with loved ones, cheering for the Chiefs, and relaxing on the beach.

Administrative Assistant

Tressa L. Purdy

Administrative Assistant

Tressa L. Purdy

Tressa has the important role of being a client’s initial point of contact as the law firm’s receptionist for all locations.  She also welcomes, assists, and cares for clients at the Lee’s Summit office. Additionally, she provides support in an administrative capacity for the attorneys, staff, and clients.  When you meet Tressa, the first quality many note is her readiness to be of assistance.

 

Tressa is a graduate of Park Hill High School with extensive administrative experience and executive level management. Tressa brings a stability and comfort to the law firm experience having worked in a variety of industries and having lived in six different major metropolitan cities.

 

Tressa has a daughter, two sons, and one grandchild.  In her free time, she enjoys her family and friends, loves being outdoors, gardening, bike riding and bird watching. Indoor hobbies include scrapbooking, painting cookies, and cheering on Chiefs football. She is a Kansas City native but enjoys traveling but is always happy to be back in her hometown.  

Attorney

Kathleen E. Overton

Attorney

Kathleen E. Overton

Kathleen Overton is an attorney and owner at Paths Law Firm. She has more than 17 years of experience advocating for those with special needs and navigating the state and federal agencies formed to help the disabled and elderly. At Paths Law Firm, Kathleen’s practice focuses on helping the elderly qualify for nursing home Medicaid, creating estate plans to protect beneficiaries, as well as a lot of time planning and forming businesses. Kathleen also enjoys helping clients form non-profit organizations and obtain 501(c)(3) tax exempt status.

 

After attending law school at the University of Oklahoma, Kathleen began representing clients before the Social Security Administration. Eventually her practice switched to federal court appeals and Kathleen spent years representing clients before the Eastern and Western District of Missouri, the District of Kansas, and the Eighth Circuit Court of Appeals. Kathleen has since focused her practice on estate planning and elder law after watching clients struggle to find ways to financially care for loved ones with special needs or aging parents.

 

Kathleen lives in the Northland with her husband and four children. She spends her free time attending soccer matches and ballet performances with her children and starting endless home improvement projects with her husband. 

Medicaid paralegal

Tena K. Dooley

Medicaid Paralegal

Tena K. Dooley

Tena is a Medicaid Paralegal.  She is very meticulous and organized.  She works closely with the attorneys, clients, and State representatives. 

Tena has an associate in applied science and has over 20 years of office management experience. She has two daughters and one grandson.

Tena enjoys spending time with her family.  She enjoys everything outdoors and her hobbies include fishing and gardening.

PARALEGAL & ACCOUNTANT

Sydney R. Morris

PARALEGAL & ACCOUNTANT

Sydney R. Morris

Sydney is the law firm’s internal accountant and one of their experienced paralegals having been with Paths Law Firm since 2017. She is a primary point of contact for estate planning and business planning.

Sydney graduated with honors from the University of Missouri Kansas City in 2022 with her Bachelor of Science Degree in Accounting. She is a Bloch Launchpad, Phi Theta Kappa, and National Honor Society alumni.

In her free time, Sydney enjoys spending time with her husband, reading, baking and going on long walks. 

SENIOR ADMINISTRATIVE ASSISTANT

Christy L. Phillips

SENIOR ADMINISTRATIVE ASSISTANT

Christy L. Phillips

Christy has three years of experience in elder law working for seniors and their families. She is currently the Senior Administrative Assistant and organizes the day to day functions of the office and makes sure everything runs smoothly. When asked why she loved what she does, Christy said at Paths Law Firm, she gets the opportunity to help clients in more ways than one. Her favorite parts of the job are getting to know the clients and helping them get their questions answered. 

Christy’s experience in the finance industry has been extremely beneficial to her role as the Senior Administrative Assistant. Christy has a special place in her heart for the elderly and attributes this to the relationship she had with her grandparents. 

Christy was raised in Ogden, Utah and moved to Independence, MO, when she was ten years old. She has been with her high school sweetheart for 25 years and they have two beautiful children together. Her daughter works in the medical industry, and her son currently attends High School and plays Baseball. When Christy is not working, she enjoys crafting and spending time with her family and friends.

Christy’s experience in the finance industry has been extremely beneficial to her role as Benefits Coordinator. There have been many influences that went into her decision to select the field of Elder Law. Christy has a special place in her heart for the elderly and attributes this to her relationship with her grandparents.

When asked why she loves what she does, Christy said that at Paths Elder law, she gets the opportunity to help clients in more ways than one. Her favorite part of her job is getting clients approved for Medicaid or VA benefits as it is a huge relief for them and their loved ones.

Christy was raised in Ogden, Utah, and moved to Independence, MO, when she was ten years old. She has two children that keep her busy and fill her life with joy! Christy’s daughter cheers for Avila University, and her son plays competitive baseball for the Bucks and races BMX locally for the Motorcycle Closeout Team.

When Christy is not working, she enjoys crafting and making homemade gifts for her loved ones and raising her kids to be healthy, happy, and positive humans.

 

Practice Areas

  • Medicaid Benefits
  • VA Benefits

 

Professionalc Memberships and Affiliations

  • Missouri Notary

FINANCIAL MANAGER

René A. Fracassa

Rene A. Fracassa, Paths Law

FINANCIAL MANAGER

René A. Fracassa

René is the Financial Manager at Paths Law Firm overseeing all aspects of revenue, expenses, and financial planning. She is also responsible for general office management, including assisting in many of the administrative matters that periodically arise. 

 

René earned her Bachelor of Science in Hotel and Restaurant Management from Central Missouri State University in Warrensburg, Missouri and soon thereafter worked her way through management at The American Restaurant where she worked almost 17 years before relocating to the country of China.

 

René is the Financial Manager at Paths Law Firm overseeing all aspects of revenue, expenses, and financial planning. She is also responsible for general office management, including assisting in many of the administrative matters that periodically arise. 

 

René earned her Bachelor of Science in Hotel and Restaurant Management from Central Missouri State University in Warrensburg, Missouri and soon thereafter worked her way through management at The American Restaurant where she worked almost 17 years before relocating to the country of China.

 

René is the Financial Manager at Paths Law Firm overseeing all aspects of revenue, expenses, and financial planning. She is also responsible for general office management, including assisting in many of the administrative matters that periodically arise. 

 

René earned her Bachelor of Science in Hotel and Restaurant Management from Central Missouri State University in Warrensburg, Missouri and soon thereafter worked her way through management at The American Restaurant where she worked almost 17 years before relocating to the country of China.

 

René is the Financial Manager at Paths Law Firm overseeing all aspects of revenue, expenses, and financial planning. She is also responsible for general office management, including assisting in many of the administrative matters that periodically arise. 

 

René earned her Bachelor of Science in Hotel and Restaurant Management from Central Missouri State University in Warrensburg, Missouri and soon thereafter worked her way through management at The American Restaurant where she worked almost 17 years before relocating to the country of China.

 

In her spare time, René is currently quite active managing multiple generations of her family, including parents and grandkids.  René has had great impact on the lives of many women teaching discipling and teaching and abundance of Bible Studies. Her former career in management and event planning trained her well to juggle all the activity.

MARKETING MANAGER

Hilary R. Tichota

MARKETING MANAGER

Hilary R. Tichota

Hilary plays a vital role in managing the Marketing Department at Paths Law Firm.  She is excellent at bringing new ideas and sharing valuable resources with the law firm and our community. Hilary has been with the law firm since the beginning, working in nearly every role which is invaluable in her marketing endeavors as she brings a unique set of skills into the Marketing Department.

Hilary is nearly complete in her Bachelor’s of Arts Degree in Marketing at Park University.  She has earned the honor of being listed in National Honors Society, Phi Theta Kappa, and the Dean’s List. Hilary is always looking for new and innovative ways to share the law firm’s message.

While not working, Hilary spends her time with her family at their rural home. They tend to their chickens and honeybees and enjoy the solitude of country living.

SR. PARALEGAL & OPERATIONS MANAGER

Jennifer A. Bronson

SR. PARALEGAL & OPERATIONS MANAGER

Jennifer

Jennifer is the Sr. Paralegal and Operations Manager at Paths Law Firm.  She oversees the firm’s probate department as well developing, implementing, and managing all the firm’s administrative processes having been with the law firm almost from the beginning.  She enjoys client contact as well as behind-the-scenes operations.

 

Jennifer began her legal career in 1990 as a legal secretary.  She has worked in small and medium sized firms, as well as court operations.  She has her Paralegal Certificate from Boston University, Law Office Management Certificate from University of Central Missouri, and she is a Master Financial Coach. 

 

Jennifer has two daughters, twin sons, and twin grandsons.  She spends as much time as she can with them.  She enjoys reading, listening to podcasts, and tending her yard. 

ATTORNEY

Russell A. Fracassa (Rusty)

ATTORNEY

Russell A. Fracassa (Rusty)

When asked what he wants to do, his reply was “I just want to sit at the kitchen table and work directly with people.” Rusty enjoys working with clients providing experienced advocacy and supporting them through their unfamiliar and overwhelming situations. Due to all the challenges faced by seniors, it is essential to work with an experienced elder law attorney who has expertise in the law, issues, and concerns affecting seniors and their families.

Rusty brings more than 30 years legal experience and expertise working for seniors and their families as an elder law attorney in Kansas City and surrounding. Prior to law school, Rusty was an accountant and his first couple years practicing law was as a tax attorney. This provides invaluable experience in his current practice of law. Rusty’s focus is helping protect seniors’ assets from taxes and long-term care costs, benefit qualification, and navigating more complex family scenarios in their estate planning.

Rusty has personally experienced the loss every parent fears, caring for a spouse suffering with cancer and the treatment, and working with aging parents through all stages of their lives.  He intimately understands the challenges faced by individuals and their caretakers when capacity or health declines, how to prepare for it, and the legal matters while in the midst of it.  He may not be able to eliminate his client’s grief, but he strives to provide clients with peace of mind.

In 2010, Rusty’s faith and love led him and part of his family to China as Christian missionaries. He and his wife, went permanently, but ended up dedicating 3 years to that ministry. They returned to Missouri to help with grandchildren after a family tragedy and later began anew with Paths Elder Law. The goal is providing compassionate care through legal advocacy.

Rusty has multiple degrees and advanced study spanning his Bachelor’s of Arts in Business Administration – Accounting at Rockhurst College (now Rockhurst University), Masters of Arts in Accounting and in Intercultural Studies, as well as his Juris Doctorate from the University of Missouri at Kansas City School of Law.

When Rusty is not practicing law, he enjoys spending time with his family, grandchildren, and excessive eating at local restaurants.

Practice Areas

  • Wills and Trusts
  • Estate Planning
  • Asset Protection
  • Medicaid Benefits
  • VA Benefits
  • Probate
  • Guardianship and Conservatorships
  • Education

 

BSBA and Master’s in Accounting, Master’s in Inter-Cultural Studies, and Doctorate in Juris Prudence

  • Rockhurst University
  • Liberty University
  • University of Missouri – Kansas City


Admissions to Practice

  • Missouri


Professional Memberships and Affiliations

  • State Bar of Missouri
  • National Academy of Elder Law Attorneys (long-time Member)
  • Elder Counsel (Charter and Ongoing Member)
  • Missouri Association of Trial Attorneys (Past Member)
  • Kansas City Metropolitan Bar Association
  • Missouri State Bar Committees – Elder Law, Estate Planning, Probate