In the case of In the Matter of the Estate of Frances R. Mason (SJC-13439, December 13, 2023), the Supreme Judicial Court (SJC) holds that the Massachusetts Uniform Probate Code (MUPC) three-year time limit on MassHealth estate recovery claims may not be applied retroactively. However, its lifetime lien on the former home of a MassHealth beneficiary ends at death.
The Facts of the Case
Frances R. Mason died at age 88 in 2008 after receiving less than a year of MassHealth-covered nursing home care. The personal representative of her estate did not file for probate until 2017 and was appointed in 2018. She sold Ms. Mason’s home in South Yarmouth in 2021, holding the proceeds in escrow pending the determination of MassHealth’s claim for reimbursement of its costs in paying for Ms. Mason’s care.
The personal representative challenged both MassHealth’s lien and its estate recovery claim. With respect to the latter, she argued that it was barred by the three-year statute of repose in the MUPC. The probate court ruled in her favor and MassHealth appealed. The SJC took the case directly, skipping the intervening step of a decision by the Massachusetts Court of Appeals.
Estate Recovery Claim
In considering the question of MassHealth’s estate recovery claim, the SJC starts by reviewing federal Medicaid law (MassHealth is the Commonwealth’s form of MassHealth), under 42 U.S.C. § 1396p, which requires that state Medicaid programs seek estate recovery of benefits paid on behalf of nursing home residents. Massachusetts implements its program through the provisions of M.G. L. c. 118E, § 31.
Claims against estates in general, however, are governed by the MUPC, which in M.G. L. c. 190B, § 3-108 limits the purposes for which an estate may be probated if more than three years have passed since the decedent’s death. This is referred to as the “statute of repose.” Those purposes do not include the payment of claims by MassHealth or any other creditors, effectively imposing a three-year time limit on such claims.
At issue here, however, is whether this time limit is prospective or retroactive since the MUPC only took effect in 2012, four years after Ms. Mason died, but five years before her estate was probated. The SJC rules that the MUPC was intended to be applied prospectively and that MassHealth’s claim against Ms. Mason’s estate could be imposed up to 50 years after her death under the law in effect in 2008.
MassHealth’s claim against Mason’s estate is a “right” that “accrued” on Mason’s death in 2008, when it became enforceable [cite omitted]. In sum, MassHealth’s right to file a claim against the decedent’s estate falls within the nonretroactive language of [the statute], and is unaffected by the MUPC’s ultimate time limit. Therefore, we conclude that MUPC’s three-year ultimate time limit provision does not extinguish MassHealth’s claim against Mason’s estate.
The Lien
Both federal and Massachusetts laws permit MassHealth to place a lien on the homes of covered nursing home residents under certain circumstances. These liens are often referred to either as “TEFRA” liens, referring to the authorizing statute, or “notice” liens because they do not confer an immediate right of collection by MassHealth, only a right to notice of any change in ownership of the property. If the nursing home returns home, MassHealth must dissolve the lien.
On the other hand, if the nursing home resident does not return home and chooses to sell their property, at that point MassHealth can recover from the proceeds its benefits paid up until the date of sale.
In this case, MassHealth argues that pursuant to M.G. L. c. 118E, § 34, since Ms. Mason did not return home, the lien was not dissolved and that it could collect on it after her death. The SJC disagrees. It holds that provision in question is in applicable since MassHealth’s estate recovery rights are governed by M.G. L. c. 118E, § 31, which provides that MassHealth liens must be dissolved at death. The provision cited by MassHealth only authorizes the enforcement of a lien for wrongly-paid MassHealth benefits.
The SJC further holds that the Massachusetts legislature intended that the lien provisions be applied narrowly with the purpose both of recouping benefits paid during the life of the nursing home resident and to receive notice if the resident takes steps to avoid estate recovery, for instance by transferring the property to family members. It did not intend the lien provisions to expand the estate recovery rights separately conferred on MassHealth.
Conclusion
While Ms. Mason’s estate lost its case due to the timing of her death, the decision does appear to be good news for most estates facing MassHealth claims. Without explicitly addressing the issue, the SJC’s focus on whether the MUPC should be applied retroactively implies that the three-year statute of repose applies to claims by MassHealth (as well as other creditors) for estates of decedents dying in 2012 or subsequently. In addition, the decision confirms that lifetime MassHealth liens must be extinguished after the death of the beneficiary whether or not MassHealth has a legitimate estate recovery claim.
This both provides an avenue for the estates of former MassHealth beneficiaries — waiting at least three years to implement the probate process — and an imperative for MassHealth to initiate the probate process itself before the three-year time limit has expired.