Texas Medicaid Estate Recovery Program (MERP)

The federal government requires that the State of Texas seek to recover funds from any individual who is receiving Medicaid Benefits.[1] In 2003, Texas enacted the Medicaid Estate Recovery Program (MERP) under the Department of Aging and Disability Services (DADS); Health Management Systems, Inc. (HMS) is contracted to collect MERP claims.

Medicaid can seek recovery from the estate of a deceased Medicaid recipient as long as that individual is 55 or older. The definition of an estate is “The real and personal property of a decedent, both as such property originally existed and as from time to time changed in form by sale, reinvestment, or otherwise, and as augmented by any accretions and additions and substitutions that are included in the definition of the probate estate found in [the Texas Estate Code]”.[2] Under this definition, it has been deemed that property passing outside of probate is not subject to a MERP claim. While this is the law as of 2020, it could always change. Also, keep in mind that if a person filed an application before March 1st, 2005, the estate recovery provisions do not apply.

MERP will initiate a claims procedure within thirty days of the death of a Medicaid recipient by filing a document titled “Notice of Intent to File a Claim.” If you intend to file an Undue Hardship Waiver Request or a request for deduction by documentation (see Chapter 18), you will need to do so within 60 days of the Notice of Intent to File a Claim. If you miss this deadline or otherwise fail to file these applications, you can still negotiate down the claim. The last attempt you have to reduce the amount owed to MERP is to file claims within the probate court. In Texas, a MERP claim is a Class 7 claim. Here are the first six classes of claims that are paid before a MERP claim is paid:

  1. Liabilities of a decedent that survive the decedent’s death, including taxes, regardless of whether the liabilities arising in contract or tort or otherwise;
  2. Funeral expenses;
  3. The expense of a tombstone;
  4. Expenses of administration;
  5. State and inheritance taxes; and
  6. Debts are due to such estates.[3]

However, if a home is to be sold through an estate, a title company will want the MERP claim satisfied before it will close on the home.

A MERP claim will not be filed if there is a(n):

  1. Surviving spouse;
  2. Surviving child under the age of 21;
  3. Surviving child of any age who is blind or disabled;[4] or
  4. Unmarried adult child residing continuously in the decedent’s homestead for at least one year prior to the time of the Medicaid recipient’s death.

[1] 42 U.S.C.A. § 1396p

[2] Tex. Admin Code § 373.105(6)

[3] Tex. Est. Code § 22.005.

[4] 42 U.S.C.A. §1382c