The Minnesota Supreme Court held that the Minnesota Department of Human Services (DHS) was entitled to recover capitation payments made to a managed care organization on the decedent’s behalf for long-term care services provided through the state’s Medicaid program from the decedent’s solvent estate. In re Estate of Ecklund, No. A23-0210 (Minn. May 7, 2025).
Joanne Ecklund received long-term care services from the Minnesota Medical Assistance Program (MMAP), Minnesota’s Medicaid program, for several years before her death in 2021. The DHS made prospective monthly capitated payments totaling $66,052.62 to Medica, Joanne’s managed care organization, for predicted long-term care costs. Those costs were based on an actuarial analysis of the entire Medicaid population rather than Joanne’s specific needs. Medica contracted with care providers to provide Joanne’s long-term care services at negotiated rates and paid $8,806.84 to those providers on her behalf. When she died, Joanne had a solvent estate, including a home that sold for $250,000.
On behalf of the DHS, the county filed a claim against Joanne’s estate to recover $66,052.62, the full amount of capitation payments made on her behalf for long-term care services, under section 256B.15(2)(a)(1) of the Minnesota Statutes, which provides that the DHS's claim may include only “the amount of medical assistance rendered to recipients 55 years of age or older that consisted of nursing facility services, home and community-based services, and related hospital and prescription drug services.”
Jerry Ecklund, personal representative for Joanne’s estate, objected, claiming that the DHS’s recovery was limited to $8,806.84, the amount Medica had paid to Joanne’s service providers. The district court granted summary judgment in favor of Joanne’s estate, ruling that under section 256B.15(2)(a)(1), the DHS's estate-recovery claim was limited to the $8,806.84 that Medica had paid long-term care providers on Joanne’s behalf. The court of appeals affirmed.
On appeal, the Minnesota Supreme Court determined in a de novo review that the DHS’s interpretation of section 256B.15(2)(a)(1) was a reasonable interpretation of its plain language and was consistent with clear federal and state guidance. The court noted that section 256B(8) of the Minnesota Statutes defines medical assistance as “payment of part or all of the cost of the care and services identified in section 256B.0625, for eligible individuals whose income and resources are insufficient to meet all of this cost.” Section 256B.15(2)(a)(1) limited the DHS’s recovery to the amount of payments it had made for the cost of Joanne’s long-term care services, namely, nursing facility services, home and community-based services, and related hospital and prescription drug services. Because the DHS had made capitation payments to provide her with that care, its allowable recovery was the amount of those capitation payments.
The court further determined that allowing the DHS to recover what it had paid for Joanne's care from her estate was consistent with the stated purpose of the estate-recovery statute, that is, that those who participate in the medical assistance program must use their own assets to pay their share of the cost of their care. In ascertaining the amount that the DHS—the entity statutorily entitled to assert a claim for recovery from an estate—may claim, it is logical to start with the amount that the DHS had paid: the capitation payments made to Medica on Joanne’s behalf.
The court was not convinced that the estate’s interpretation of the statutory language, that is, that the DHS could claim only the amount that Medica had paid to providers for care and services, was reasonable. Even if the meaning of the statute was ambiguous, other tools useful for statutory interpretation, such as federal and state guidance, supported its conclusion that the estate’s reading was incorrect. Federal guidance provided by the Centers for Medicare & Medicaid Services (CMS) in the State Medicaid Manual provided that, if a state has elected to recover for some but not all services covered under the state’s plan, as was the case in Minnesota, then the state must recover from the recipient's estate the portion of the capitation payment attributable to the recoverable services based on the most appropriate actuarial analysis determined by the state. The DHS’s own estate recovery manual instructed Minnesota counties to recover capitation payments as directed by CMS. Thus, the DHS was required to recover its capitation payments. The supreme court reversed the appellate court’s decision and directed the district court to award $66,052.62 to the DHS.
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