This is the December 17, 2007, issue of Elder Law FAX, a free newsletter published by the Elder Law Practice of Timothy L. Takacs   Court Bars Medicaid Estate Recovery Attempts as Untimely Filed In two cases decided by the Tennessee Court of Appeals last month, the State of Tennessee was barred from recovering almost $400,000 because the State failed to file claims in the probate court within one year of the date of death of the benefits recipients.   On July 1, 1991, Mary Virginia Jones Henkel became the beneficiary of Medicaid nursing home benefits paid through the Tennessee Bureau of TennCare. Ms. Henkel died on February 19, 2003.   In March, 2003, Ms. Henkel's conservator sent the Bureau a final accounting for the conservatorship, and the Bureau responded by sending the conservator a letter and printout of Medicaid benefits paid by the State.   On June 11, 2003, October 17, 2003, and November 6, 2003, the Bureau sent letters notifying Ms. Henkel's children that the Bureau may have an interest in the estate. On January 6, 2004, the Bureau received a request for release of its claim from Ms. Henkel's son, Larry. In response, the Bureau sent another letter to Larry Henkel, again informing him that the Bureau may have an interest in his mother's estate.   Ms. Henkel's children did not seek to open a probate estate. Consequently, on September 8, 2005, Bureau petitioned the probate court in Nashville to appoint an administrator of Ms. Henkel's estate, in the case of In re Estate of Mary V. Henkel. An administrator was appointed, and on January 30, 2006, the Bureau filed a claim against the estate for $287,646.30 for Medicaid benefits paid out on behalf of Ms. Henkel. The administrator of the estate filed an exception to the Bureau's claim.   The facts of the second case are similar and likewise were undisputed: In re Estate of Margie Mary Anderson, on January 1, 1994, at the age of sixty-five, Margie Mary Anderson became the beneficiary of Medicaid benefits. Ms. Anderson died on February 21, 2004. On June 3, 2005, the Bureau sought appointment of an administrator of her estate in order to file a claim for $99,345.81 paid to her medical providers on her behalf. The administrator likewise filed an exception to the claim as not being timely filed.   In both Henkel and Anderson, the probate judge dismissed the TennCare claim and the Bureau appealed. In decisions filed on November 16, 2007, the Tennessee Court of Appeals upheld the actions of the probate judges dismissing those claims because they were not timely filed. Under Tennessee law, creditors of decedent's estates, unless subject to a specific exception, must file claims against the probate estate within one year of the date of death of the decedent or be barred from any recovery.   The Bureau argued that the Tennessee legislature never meant for TennCare claims to be subject to the same one-year statute as other general creditors. Writing for the court, Justice Frank Crawford noted that the legislative history of the amended statute, passed by the General Assembly in 2000, contains the following statement by Steve Cobb, a representative of the Tennessee Bar Association: Last week you [the Senate Committee] asked me to take a look at this [the proposed amendment]. I circulated this to quite a number of practitioners in the field.... They would recommend that you set a statute of limitations of one year here and we think that would work very well. There were comments last week by someone from the state. If I understood the person correctly she was concerned about the fact that in the case of a state [sic] taxes, death taxes, however you want to call them the state might not even know about the death within a year. I'm informed by all the people I talked to that this bill doesn't affect that whatsoever. There's a separate statute of limitations of three years that governs taxes. So this is only the kinds of credits or claims against the estate of the decedent that are in existence at the time he or she dies so the state is on notice the moment the person dies, even beforehand that they're owed some money and so we think that a year to check on this situation and try to follow up is plenty. An average citizen has four months from the time that notice to creditors is [published] to file...that notice. "In short," wrote Justice Crawford, "if TennCare services is on notice that it may have a claim against an estate, either by virtue of the fact that TennCare has paid benefits on behalf of an individual prior to death, or has ceased payment at the beneficiary's death, then it is incumbent upon the Bureau to protect its interest by seeking to open an estate on its own motion. That being said, this Court does not conclude that the Bureau, although acting in its official capacity, has unlimited time to seek reimbursement."