Medicaid can collect nursing home room-and-board costs from clients, Nebraska Supreme Court rules

LINCOLN — The Medicaid program can seek reimbursement from clients for nursing home room-and-board costs, the Nebraska Supreme Court ruled Friday.

The high court rejected an argument from the representative of a deceased Medicaid recipient that it was “unconscionable and contrary to law” for the Department of Health and Human Services to collect most of his remaining estate to pay nonmedical expenses incurred while he was living in a nursing home.

The unanimous court also was unimpressed by an assertion that HHS tries to profit off the estates of Medicaid recipients. Rather, the judges showed that the state uses such funds to pay costs that are due to the federal government, which works in partnership with the state to offer the Medicaid program.

“The notion that the Medicaid program constitutes a moneymaking scheme for the state borders on the frivolous,” Judge William Cassel wrote in Friday’s opinion.

The case involved a lawsuit by the estate of Herman M. Vollmann, 78, who died in 2014 at a Nebraska City nursing home. HHS officials sought reimbursement of nearly $23,000 from the estate for nursing home services, which included room-and-board costs.

Vollmann’s estate challenged the payment, but Otoe County Judge John Steinheider granted summary judgment in favor of HHS.

On appeal, an attorney for the estate argued there is nothing in the law that says a recipient’s assets can be collected to pay back “nonmedical expenses” such as room-and-board costs. The attorney argued the law draws a distinction between medical assistance and medical institution, and the state can’t seek repayment for medical institution expenses.

“We see no distinction,” the court stated. “The statute is clear that the debt ‘shall include the total amount of medical assistance provided.’ ”

The court noted that HHS may choose to waive its claim to medical assistance costs, but such waivers are intended to prevent survivors of the deceased from becoming impoverished. Because Vollmann had no dependents at the time of his death, his five surviving adult children were not entitled to a waiver, the court ruled.

“The beneficiaries of a recipient’s estate are not entitled to an inheritance at the public’s expense. That is the situation here,” Cassel wrote in his opinion.

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