After six hours of debate over two days, an attempt to force a vote on a bill intended to provide implementation guidance for liens on property for Medicaid reimbursement failed April 1.
Columbus Sen. Paul Schumacher, sponsor of LB1103, said the bill was a follow-up to LB72, which was passed last session and expanded to the federal maximum the definition of an estate for the purpose of Medicaid recovery.
Schumacher said that bill sought to give the state Department of Health and Human Services (DHHS) greater ability to recover Medicaid payments from individuals who attempt to hide assets in order to qualify for nursing home coverage from the Medicaid program.
“What [LB72] did not do is outline a procedure for the collection of Medicaid reimbursement from the expanded estate,” Schumacher said. “LB1103 is the procedural bill.”
A study conducted in 2004 estimated that Nebraska could recover $12 million annually from those who defraud the state’s Medicaid system and that number likely is higher now, he said.
LB1103 would authorize DHHS to file a property lien to secure reimbursement for Medicaid benefits in the event an applicant knowingly withheld his or her real estate holdings when applying for medical assistance. An applicant for Medicaid would be required to disclose all interests in real estate, trusts, corporations or other entities.
The department also could file a property lien in the event an applicant for assistance transfers property to another person while retaining rights to the property and accepts payment for an amount less than full consideration. The lien would be limited to the lesser of two amounts: the amount needed to satisfy Medicaid reimbursement obligations or the actual value of the real estate.
Action against an applicant or his or her estate could be brought by the department during a five-year period following the applicant’s death.
A Judiciary Committee amendment that would create specific procedures for DHHS to file a notice of lien for recovery of Medicaid reimbursement and make a number of other technical changes to the bill failed on a 20-19 vote. Twenty-five votes were needed.
Schumacher said he would reintroduce the amendment on select file, as it contained a compromise that satisfied the Nebraska State Bar Association, the Nebraska Bankers Association and DHHS.
Heartwell Sen. John Kuehn said the provisions would place a burden on the estate planning process and the department. For example, he said, asking DHHS to determine whether a real estate transaction meets market standards is outside of the department’s expertise.
Kuehn offered a motion to bracket the bill until April 20, saying more study on the issue is needed.
Sen. Jim Scheer of Norfolk said he is concerned that the bill would expend more state resources attempting to find fraud than would be found and returned to the state. The current system appears to be working, he said, and most people in Nebraska nursing homes who are on Medicaid are not defrauding the system.
“They’re hardworking people who weren’t ever able to accumulate very much and they simply ran out of money before they ran out of breath,” Scheer said.
Sen. Mike Groene of North Platte spoke in support of the bill, saying Medicaid is being abused by some individuals who can afford to pay for their own nursing home care. The bill would not harm anyone unless they attempted to defraud the system, he said.
“We have to protect the money that we have in the Medicaid program for those who need it,” he said. “If you want my tax dollars, prove you need it.”
The bracket motion failed on a vote of 23-16 during evening debate March 31—two votes short of the number required for adoption.
Sen. John McCollister of Omaha said in support of LB1103 that 25 states have taken actions similar to those contained in the bill, which he said has been vetted thoroughly by those familiar with estate law.
“We have a fiduciary responsibility to the citizens of Nebraska to recover this money if possible,” he said.
Sen. Laura Ebke of Crete said she was “gobsmacked” that lawmakers would not support monitoring the eligibility of potential Medicaid patients whose nursing home care will cost taxpayers approximately $5,000 a month.
“Filibustering a good government bill is a bad idea and I don’t understand why people are doing this,” she said.
In his continued opposition to the bill, Kuehn said it would create an additional layer of government as well as liabilities and costs for those selling and leasing land. As a result, he said, the provisions unfairly would target the way that farm families transfer wealth through intergenerational land transfers.
After six hours of debate and several attempts to bracket the bill, Schumacher offered a motion to invoke cloture, or cease debate and take an immediate vote on LB1103.
The motion failed 29-19. Thirty-three votes were needed.
A failed cloture motion prevents further debate on the bill for the day. It is unlikely to be further debated this session.