Recovery from Estate of Deceased Beneficiary

10.7 – Recovery from Estate of Deceased Beneficiary (Rev. 12438; Issued: 01-04-24; Effective: 02-06-24; Implementation: 02-06-24) A beneficiary’s death does not materially change Medicare’s interest in recovering its payments made on behalf of the beneficiary while alive. Upon death, the estate of the beneficiary comes into existence by operation of law. State and local laws govern the formation and execution of estates. An executor or administrator whose sole purpose is to conclude all business and financial matters that still remained at death manages it. Medicare’s interest in the outcome of a third-party liability claim is one of these matters. Therefore, Medicare’s claim is properly asserted against the estate, and the MSP Contractor should request a copy of the letter of administration. If a beneficiary is deceased before resolution of a Medicare secondary payer recovery claim associated with a liability insurance (including self-insurance), no-fault insurance, or workers’ compensation settlement, judgment, award, or other payment, new proof of representation on behalf of the beneficiary’s estate must be submitted. If there is no will or formal estate, the document or documents must be signed by an individual who is entitled under state law to pursue the applicable claim. Where state law requires court documentation to establish such status, that documentation should be provided. Where such a state requirement exists, and a will is available, the initial page of the will, the page(s) showing the executor, and the notarized signature page(s) should be provided. The method and process for properly filing claims against an estate is, again, an operation of state and local laws and not within the control of Medicare or its Contractors. Ordinarily, the estate should not have possession of any settlement proceeds that are due Medicare, since Medicare’s claim should have been satisfied before distribution to the estate (i.e., while the attorney was still in possession of the proceeds). However, if the proceeds have been distributed to the estate, the MSP Contractor must act quickly to resolve the outstanding claim, taking the following steps: a) When the MSP Contractor learns that the beneficiary has died, it identifies and contacts the executor or administrator, or whoever is acting in that capacity. It finds out if they are in possession of all Medicare correspondence that had been sent to the beneficiary while alive. If the information was not available, it sends the executor or administrator dated copies of all such notices; b) If a settlement is reached, a letter containing an initial determination should be sent to the executor or administrator, or whoever is acting in that capacity. The rights to request waiver and/or appeal that are expressed in this letter apply equally to the estate if there is a surviving spouse or dependent that is entitled under Title II or XVIII of the Act. Where neither of these parties exists, waiver under Section 1870(c) of the Act may not be granted. However, relief may still be available under Section 1862(b) of the Act or the Federal Claims Collection Act (FCCA), and the MSP Contractor will ensure that the executor or administrator understands Medicare’s priority right to satisfaction of its claim by re-emphasizing that fact in conversations. The MSP Contractor should also attempt to end each conversation with a specific action that the administrator should take within a specific time period. If this time limit passes and the action has not occurred, the MSP Contractor contacts the administrator again. The most important thing is the prevention of settlement of the estate prior to satisfaction of Medicare’s claim.