In March 2005 the state of Texas implemented the Medicaid Estate Recovery Program (MERP) in compliance with U.S. federal Medicaid laws. Managing the program is the Texas Department of Aging and Disability Services (DADS).
Under MERP, the state of Texas may file a claim against the estate of a deceased Medicaid recipient, age 55 and older - who applied for certain long term care services on or after March 2005. They can file claims that include cost of services, hospital care and prescription drugs supported by Medicaid under the following programs:
Nursing facility such as nursing homes
Intermediate care facility for persons with intellectual disability which includes Texas supported living centers;
Medicaid waiver programs such as:
Community Living Assistance and Support Services (CLASS)
To help pay for Medicaid services, the state of Texas is required have a Medicaid Estate Recovery Program (MERP). If one received Medicaid long-term services and support - the state government of Texas has the right to ask for money back from your estate after the recipient dies. In some special cases, the state may not ask for anything back at all and will never ask for more money back than it paid for Medicaid services.
Exceptions to filing a MERP claim
A Medicaid Estate Recovery Program (MERP) claim will only be filed when it is cost effective for the state government. Claims that are considered not cost effective are where :
the dollar value of the estate and property is $10,000 or less
the recoverable amount of Medicaid costs is $3,000 or less
the cost of disposing (selling) of the property would be equal to, or greater than the property's actual value.
there is a surviving spouse
there is a surviving child or children under 21 years of age
there is a surviving child or children of any age who is blind, has a visual impairment or who has low vision and is totally disabled under Social Security requirements
there is an unmarried adult child residing continuously in the Medicaid recipient's homestead for at least one year before the time of the Medicaid recipient's death.
It is highly recommended you seek the councel of a Medicaid attorney if a MERP claim has been filed.
When someone applies for Texas Medicaid and long term services and support - the state provides a notice that explains MERP. When that person dies the state sends a different notice to the heirs or their lawyerérepresentative to let them know that the state of Texas intends to file a claim. The notice will ask for information so they can decide whether to file a MERP claim.
An undue hardship waiver may be filed when:
The estate property
has been the site of a family business, farm or ranch for at least 12 months prior to the death of the Medicaid recipient;
is the primary income producing asset of the heirs;
produces at least 50 percent of their livelihood; and
recovery by the state would affect the property and result in heirs losing their primary source of income.
The estate's beneficiaries would be eligible for public or medical assistance if a recovery claim is collected.
Allowing one or more heirs to receive the estate enables them to discontinue eligibility for public or medical assistance.
The Medicaid recipient received medical assistance as the result of being a crime victim.
Other compelling reasons exist.
A hardship waiver specific to the homestead may be filed when:
One or more heirs have gross family income below 300 percent of the federal poverty level.