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Friday, May 21, 2021

SJC Puts a 3 Year Limit on MassHealth Estate Claims

A recent Supreme Judicial Court decision confirmed that MassHealth has a statute of limitations of three years from a beneficiary’s death to file its claim for reimbursement on the beneficiary’s estate or MassHealth’s Claim is completely barred.

The Court recently made this ruling In the Matter of Estate of Kendall, 486 Mass. 522 (2020).  In this matter, Jacqueline Ann Kendall died intestate on August 7, 2014.  At the time of her passing, Ms. Kendall had received $104,738.23 in MassHealth benefits.  MassHealth would be permitted to recover these payments from Ms. Kendall’s estate.  While the probate process must commence within three years of the decedent’s death in Massachusetts, an heir to Ms. Kendall filed a Petition for Late and Limited Testacy in the Probate & Family Court on May 24, 2018, more than three years after Ms. Kendall’s death.  As is required by Massachusetts law, a copy of the Petition was sent to the Division of Medical Assistance, which is the state Medicaid agency that administers the MassHealth program.  MassHealth notified counsel for the Petitioner that it planned to file a notice of claim in the estate, but the estate rejected the claim as untimely.

In response, MassHealth filed an objection and asserted its rights to present and recover claims under the Massachusetts Uniform Probate Code, M.G.L. c. 190B, even after the three-year bar on creditor claims established under § 3-108 (4), and the one-year creditor filing deadline established under § 3-803 (a).  MassHealth also filed a Petition for Formal Probate requesting the appointment of a public administrator as the personal representative so that the MassHealth’s claim would be paid.

In a unanimous decision, Justice Scott L. Kafker held that Probate Code § 3-108 (4) prohibits the filing of any claims other than expenses of administration in estates after three years from the decedent’s date of death.  The Code also prohibits the personal representative from paying any such late presented claims.  The Court found that the legislation id not exempt MassHealth from the three-year “ultimate time limit” on the filing and payment of all creditors’ claims against estates. 

The Court stated that “The three-year ultimate time limit is a critical provision ensuring the orderly settlement and liquidation of estates in a relatively expeditious manner. We conclude that if the Legislature intended to create an exception for MassHealth to this ultimate time limit, it would have done so expressly in that particular provision.”  Kendall at 528.  The Court gave significance to the fact that creditors, including MassHealth, have the power to open estates to preserve claims, “provided that the petition for an appointment of a personal representative was filed prior to the expiration of the ‘ultimate time limit’ of § 3-108.” Kendall, at 531.

When confronted with the possibility that heirs would wait for three years to pass to probate an estate to avoid reimbursing MassHealth, the Court stated that the Legislature had already considered this and found the likelihood to be low.

For the SJC, if MassHealth was exempt from the three-year time limit, estates would never close and personal representatives would never be freed from their duties and personal liabilities.  Additionally, it may prevent estate assets from ever fully being released.  While this is a conclusive decision, it seems likely that MassHealth will challenge this ruling in the future.

If you have questions regarding estate planning, probate, or MassHealth estate claims, please contact the Law Offices of Samuel S. Reidy for a free consultation.

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