MONTGOMERY — A new state law will make it easier for Alabama's Medicaid program to recover money it spent on some enrollees, including for nursing home and medical care, after their deaths.
Federal rules have allowed states to recover the money, but Alabama Medicaid doesn't always find out when a recipient or their spouse dies and their assets, like their homes, are sold, state officials said.
The new law will require specific notice to Medicaid at the commencement of a probate proceeding.
“I think it’s important that we do all we're allowed to do in the Medicaid program to make it as efficient as possible,” bill sponsor Sen. Arthur Orr, R-Decatur, said this week.
According to the agency, Medicaid’s estate recovery program recouped about $522,000 in fiscal 2018. The agency will be able to recover $3 million to $5 million with these new measures, according to a fiscal note attached to the bill.
The bill requires that Medicaid receive notice when a probate estate is opened in Alabama, according to Commissioner Stephanie Azar's office. Prior to this bill, Medicaid did not receive all required notices.
States can’t recover money from the estate of a deceased Medicaid enrollee who has a surviving spouse, child under age 21 or a child of any age with a disability.
“When Mr. Jones goes to the rest home and has little income, Mrs. Jones is still in the house,” Orr said. “We’re not going to kick anyone out.”
But later, when Mr. and Mrs. Jones are deceased, Orr said, their house may get sold.
“But Medicaid wasn’t getting notified and has no way to recoup its expenditures on Mr. Jones’ healthcare," Orr said. “… If someone had a significant asset like a house, why should the government be responsible for paying all their medical care expenses?”
Medicaid is the state’s largest non-education expense and one that grows almost every year.
“On the cost of Medicaid, as far as the General Fund budget, one of the things we want to do is lessen the abuse of the system,” bill co-sponsor Sen. Gerald Allen, R-Tuscaloosa, said Thursday. “There were individuals and citizens who work the system, creating an abuse situation.”
Senate Bill 76 was approved in the Senate 30-0 and in the House 98-3.
“Anytime we can save Medicaid money, that helps the budgets and the greater need so that those who truly need the help can receive it," Orr said.
“We do not have endless resources.”