Court sets guidelines for placing liens for Medicaid

Friday, April 2, 2004 | 11:43 a.m.

CARSON CITY -- The Nevada Supreme Court on Thursday established guidelines for the state to follow in imposing property liens to recover money spent by Medicaid.

The court, in a 4-2 decision, said the state Welfare Division may impose a lien on the property after the death of a Medicaid recipient but before the death of the surviving spouse under certain limits.

The lien on the interest of the property held by the Medicaid recipient would be in effect during the surviving spouse's lifetime, the court said in the majority decision written by Justice Nancy Becker.

The court said the Welfare Division must release the lien when the surviving spouse wants to sell or refinance the home to avoid poverty.

Charles Duarte, administrator of the state's Medicaid program, called the decision "a big win." He said it would allow the state to continue its recovery efforts. While he did not have immediate figures, he said "quite a few" liens are filed.

Deputy Attorney General Charles Hilsabeck, who represented the state in the case, called the decision "a pretty good victory." He estimated there are about 150 of these liens filed statewide.

He said today that the state has already complied with the District Court and Supreme Court rulings that the liens must be more specific in showing that they are placed only against the interest in the property owned by the person receiving Medicaid benefits.

Thursday's decision involved two Las Vegas cases.

One concerned Agnes Ullmer, whose husband died; the other involved Michael Parco Sr., whose wife died. The court found that the Welfare Division filed improper liens against the two homes in Las Vegas in question and that the division should be prevented from pursuing the liens in their current form.

The court said any lien must provide clear notice it is limited to the interest of the Medicaid patient and that it also include a mandatory release item. The liens in these two cases did not have those provisions.

Justice Bill Maupin wrote a dissenting opinion saying the Welfare Division "has no express or implied statutory right to record liens against real property held by the enumerated surviving members of a Medicaid recipient's family." Justice Mark Gunderson agreed in the dissent.

The Welfare Division placed a lien for the amount of $144,475 spent in Medicaid for caring for Harold Ullmer before he died. His widow, Agnes, filed a class action lawsuit against the Welfare Division to enjoin the state from placing liens on homes when the spouse survived.

The Supreme Court overturned the decision of District Judge Ronald Parraguirre, which granted class-action status to the Ullmer suit.

Becker said the government has a legitimate interest in recovering the amount paid in Medicaid benefits by imposing the lien on his property, but that limits in the law "protect surviving spouses or qualified dependents from poverty during their lifetimes or dependency."