In re Gorney Estate
| Decision Date | 04 February 2016 |
| Docket Number | 323304,Docket Nos. 323090,323185,326642. |
| Citation | 886 N.W.2d 894,314 Mich.App. 281 |
| Parties | In re GORNEY Estate. In re French Estate. In re Ketchum Estate. In re Rasmer Estate. |
| Court | Court of Appeal of Michigan — District of US |
Bill Schuette, Attorney General, Aaron D. Lindstrom, Solicitor General, Matthew Schneider, Chief Legal Counsel, Brian K. McLaughlin, Geraldine A. Brown, Assistant Attorneys General, for the Department of Health and Human Services.
Cubitt & Cubitt, Bad Axe (by E. Duane Cubitt ) for the Estate of Irene Gorney.
Kreis, Enderle, Hudgins & Borsos, PC, Battle Creek (by James D. Lance ), for Daniel French, personal representative of the Estate of William French.
Charlotte F. Shoup, PLC, Saint Johns (by Charlotte F. Shoup ), for the Estate of Wilma Ketchum.
Dill Law PLLC, Saginaw (by Colin M. Dill) for Richard Rasmer, personal representative of the Estate of Olive Rasmer.
Before: JANSEN, P.J., and CAVANAGH and GLEICHER, JJ.
In these consolidated appeals, the Department of Health and Human Services (DHHS) seeks recovery of Medicaid benefits paid on behalf of the decedents. Specifically, the DHHS submitted claims in the probate courts to collect the value of the decedents' homes upon their deaths. The estates responded that the DHHS had provided inadequate notice of its estate recovery plans and violated their rights to due process. The probate courts denied the DHHS's collection attempts in all four underlying actions.
On appeal, the DHHS contends that it complied with statutory notice requirements by informing the decedents of estate recovery provisions in annual “redetermination” applications beginning in 2012, and that the judicial process sufficed to meet due-process requirements. This Court recently resolved certain issues raised here in the DHHS's favor in In re Keyes Estate, 310 Mich.App. 266, 871 N.W.2d 388 (2015).1 Accordingly, we must reverse in part the probate courts' orders to the extent they conflict with this precedent and remand for further proceedings.
The estates, however, raised additional challenges to the DHHS's collection efforts that are issues of first impression for this Court. We hold that the DHHS would violate MCL 400.112g(5) and the decedents' rights to due process by taking property to cover a Medicaid “debt” incurred before the program creating the debt was approved and implemented. We therefore affirm the probate courts' decisions in relation to recovery claims for sums expended between July 1, 2010, and the July 1, 2011 implementation of the MMERP.
Mackey v. Dep't. of Human Servs., 289 Mich.App. 688, 693, 808 N.W.2d 484 (2010) (citation omitted). In 1993, Congress required states to implement Medicaid estate recovery programs. See Omnibus Budget Reconciliation Act of 1993, § 13612; 42 U.S.C. 1396p(b). In 2007, the Michigan Legislature passed 2007 PA 74, which added MCL 400.112g through MCL 400.112k to the Social Welfare Act, MCL 400.1 et seq. This legislation empowered the DHHS2 to “establish and operate the Michigan Medicaid estate recovery program [MMERP] to comply with” 42 U.S.C. 1396p. MCL 400.112g(1). MCL 400.112g(5) required approval by the federal government before the MMERP would be “implement[ed].” Michigan finally received approval from the federal Centers for Medicare & Medicaid Services (CMS) for its program (referred to as a State Plan Amendment) on May 23, 2011, and DHHS circulated instructions to implement the plan on July 1, 2011. Keyes, 310 Mich.App. at 268, 871 N.W.2d 388 ; Letter from the CMS, May 23, 2011, available at <
In the current cases, the decedents began receiving Medicaid benefits after the September 30, 2007 passage of 2007 PA 74. It is undisputed that the initial Medicaid applications (form DHS–4574) filed by the decedents, or by their personal representatives, contained no information about estate recovery. However, it is also undisputed that in order to remain entitled to Medicaid benefits, each applicant was required to resubmit a form DHS–4574 annually for a “redetermination” of eligibility. Each new DHS–4574 contained a section entitled “Acknowledgments,” which the applicant certified that he or she “received and reviewed.”
At some point during 2012, all four decedents' personal representatives submitted a DHS–4574 as part of the redetermination process. Beginning in 2012, the acknowledgment section of the form included the following provision:
I understand that upon my death the Michigan Department of Community Health [now the DHHS] has the legal right to seek recovery from my estate for services paid by Medicaid. MDCH will not make a claim against the estate while there is a legal surviving spouse or a legal surviving child who is under the age of 21, blind, or disabled living in the home. An estate consists of real and personal property. Estate Recovery only applies to certain Medicaid recipients who received Medicaid services after the implementation date of the program. MDCH may agree not to pursue recovery if an undue hardship exists. For further information regarding Estate Recovery, call 1–877–791–0435.
As with previous applications and redeterminations, each decedent's personal representative signed the statement affirming that he or she had received and reviewed the acknowledgments, which included the provision on estate recovery.
Following each decedent's death, the DHHS served claims on the estate seeking to recover the amount the department had paid in Medicaid benefits since July 1, 2010. In each case, the estate denied the claim and the DHHS filed suit in probate court. The estates argued that because the decedents had not received proper notice about estate recovery when initially enrolling in the Medicaid program, the DHHS had failed to comply with statutory notice requirements and violated their due-process rights. The estates further contended that the DHHS violated their rights by seeking recovery of benefits dating back to July 1, 2010, one year before the MMERP was approved by the federal government, and approximately two years before any notice was provided to the recipients. This precluded recovery, the estates contended. In all four cases, the probate court rejected the DHHS's claims for recovery against the estates. In Docket No. 323090, the court entered a judgment in the estate's favor after a bench trial. In Docket Nos. 323185, 323304, and 326642, the courts summarily dismissed the DHHS's claims.5 The DHHS now appeals.
We review de novo a trial court's decision on a motion for summary disposition, issues of statutory interpretation, and whether a party has been afforded due process. Elba Twp. v. Gratiot Co. Drain Comm'r., 493 Mich. 265, 277–278, 831 N.W.2d 204 (2013) ; Keyes, 310 Mich.App. at 269–270, 871 N.W.2d 388. As noted, many issues in these appeals were raised and decided by this Court in Keyes. Therefore, we are not writing on a clean slate.
The estates challenged the adequacy and effectiveness of the notice provided in the final paragraph of the multipage redetermination application. The notice provisions of the MMERP are found at MCL 400.112g(3)(e) and (7), and instruct:
In Keyes, 310 Mich.App. at 272–273, 871 N.W.2d 388, this Court examined these provisions and held:
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Dep't of Health & Human Servs. v. Rasmer (In re Estate of Rasmer)
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Ketchum Estate v. Dep't of Health & Human Servs., Docket No. 324741.
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