December 12, 2012
When Congress enacted the Social Security Act of 1965, it created two public benefit programs, Medicaid, known as Medi-Cal in California, and Medicare. Medi-Cal is the government-sponsored medical program for largely the poor and disabled. Medicare is the government-sponsored medical program for those 65 and over, or those with disabilities.
A key distinguishing feature of Medi-Cal is the mandatory reimbursement of funds, subject to certain conditions, expended for the benefit of the patient once the patient passes away. Welf & I C §14009.5. Medicare has no such reimbursement feature. In other words, the state of California is entitled to be repaid what it spent on the patient once the patient has died, subject to certain qualifications. If the patient had assets when they passed away, the state of California will seek recovery whether such is a short or lengthy endeavor. The following case illustrates how long the process can take.
Bunnie R. Gregoire was the owner of a home in Brisbane, CA. In 1997 she transferred this home into her restated revocable trust. She named her granddaughters, Selena H. Firth and Jennifer C. Martin, the beneficiaries. In 2001, Firth applied for Medi-Cal benefits on behalf of Gregoire given her advanced age of 90. On the application form, Firth acknowledged that "the State has the right to seek reimbursement from my estate for all Medi-Cal benefits I received after age 55."
In 2002, the San Mateo County Public Guardian was appointed conservator of the person and estate of Gregoire. In 2005, Gregoire died and the Public Guardian tendered notice to the State Department of Health Care Services (DHCS) that Gregoire had died (this is required by law). On the schedule of assets, the Public Guardian erroneously listed the value of Gregoire's estate as "0.00." An official from the DCHS then did a public records search which revealed that Gregoire owned a home in Brisbane. Over the next couple of years, the DCHS sent notices to the Public Guardian to explain the discrepancy, albeit to no avail. In 2007, the successor trustee sold the Brisbane home and distributed the funds in accordance with Gregoire's trust.
Eventually the DCHS filed suit in 2008 against the beneficiaries for Medi-Cal reimbursement given that it believed that Gregoire's estate was solvent when she died. The beneficiaries objected to the claim by the DCHS because they believed that the DCHS should have filed suit sooner. Ultimately in 2011, the beneficiaries lost on appeal because they used the wrong law to support their statute of limitations argument. I will spare you the boring legal arguments. Just know that the beneficiaries lost. End of story.
My takeaway from this case is that it is demonstrative of the phrase "the long arm of the law." Gregoire died in 2005 but the validity of her Medi-Cal reimbursement liability was not settled until 2011, six years later.