Effective April 1, 2021, the Tennessee legislature changed the rules regarding Tenncare (Medicaid) estate recovery. "Estate recovery" refers to Tenncare's right to be reimbursed from a Tenncare recipient's estate for amounts paid for the decedent's care. The asset that is most vulnerable is usually the house. This is because the house was not a countable asset while the recipient was alive, so many Tenncare recipients die owning a house but not much else, almost everything else that they owned in life having been spent on their care as a condition of Tenncare eligibility.
Before April 1, 2021, there was effectively no meaningful deadline for Tenncare to pursue estate recovery after a Tenncare recipient died. It was very common for a Tenncare recipient's surviving family members to continue to reside in the house indefinitely, but all the while knowing that they could never sell or refinance the house without having to satisfy Tenncare's claim for reimbursement, which was often quite substantial.
Now Tenncare has deadlines for making a claim against a decedent's estate. The deadlines are similar to those which apply to any other creditor. The deadlines are:
- If a probate is file and TennCare receives a notice to creditors within twelve (12) months of the decedent's date of death, then Tenncare's claim against the decedent's estate are forever barred unless Tenncare files a claim with the probate court clerk or brings or revives suit within the later of:
- Twelve (12) months from the decedent's date of death; or
- Four (4) months from the date when Tenncare received the notice to creditors.
- Often no probate is filed. If TennCare does not receive a notice to creditors in a probate case within twelve (12) months of the decedent's date of death, then Tenncare's claims against the decedent's estate are forever barred unless Tenncare files a claim with the probate court clerk or files a petition to open or re-open a decedent's estate (probate case) within 48 months of the decedent's date of death.
This means that a great many homes still titled in a decedent's name due to fear of a Tenncare claim can now be safely probated, retitled, sold and refinanced without fear of triggering a Tenncare estate recovery claim.