1. If Medicaid was paid improperly, the Department of Social Services is entitled to recover all improperly paid benefits.

         If Medicaid discovers that an individual was ineligible because the information provided was false, there will be 3 steps taken. First, any further medical assistance will be discontinued. Second, the case can be referred to the local District Attorney office for criminal prosecution. Third, a lawsuit for the civil recovery may be commenced, to recover the money overpaid.

         The first step in this process is usually a letter, received by Medicaid recipient, informing him that he is being investigated for Medicaid fraud, and asking him to come in for an interview.


2.     Medicaid is entitled to recover from the estate of anyone who was 55 or older when the assistance was granted. However, this recovery is limited by several important considerations:

  1. The recovery is limited to benefits paid within 10 years of individual’s death.

  2. Medicaid is excluded from making a claim against the estate of an individual who is survived by a spouse, a minor child, or a disabled child. However, the lien is held in abeyance only. Once the surviving spouse dies, a lien can be placed against the second to die spouse’s estate to recover Medicaid benefits paid to the first spouse.

  3. Medicaid may only make the recovery from the probate assets of an individual (those assets that pass under a will or by administration if there is no Will, and not part of a revocable trust, life estate or joint tenancy agreement).

Medicaid is a preferred creditor. As a result, Medicaid’s lien must be satisfied before other creditor’s claims and before any bequests to beneficiaries are distributed.

Most Medicaid liens can be negotiated.

3. Medicaid is entitled to recover from the proceeds of an action arising from an accident or malpractice, as the result of which the injured party received Medicaid benefits.           

Disclaimer: This article only offers general information.  Each situation is unique. It is always helpful to talk to a specialized attorney, to figure out your various options and ramifications of actions.  As every case has subtle differences, please do not use this article for legal advice. Only a signed engagement letter will create an attorney-client relationship.