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A state agency Wednesday approved aggressive new rules to recover Medicaid costs by going after the homes and other assets of nursing home residents after they die.

The program, called estate recovery, is expected to affect the families of thousands of Georgians who receive long-term care paid by the state.

Family members of nursing home residents have protested the rules, pointing out that their loved ones weren't told their homes would be targeted when they were admitted to the facilities.

"The rules are extremely harsh, and they will discourage people from getting care they really need," said consumer health advocate Linda Lowe. "They will work hardships on families who really don't have that much."

In many situations, Lowe said, a house worth $50,000 is the only asset of value left in the family. "You've got to think of the consequences for low-income families who actually need the house to maintain a stable home," she said.

Georgia is joining Texas as two of the last states to pursue recovering these Medicaid costs, but Georgia's rules are much tougher by comparison. The state Department of Community Health, whose board approved the recovery plan, said it expects legal challenges in the first two years of the program. It takes effect Aug. 1, but recovery efforts aren't expected to begin until later this year.

The "estate recovery" plan accompanies several state budget cuts in Medicaid, which provides health insurance for 1.4 million low-income Georgians and the PeachCare program for uninsured children. Community Health Commissioner Tim Burgess predicted more health budget reductions are likely for the next fiscal year as well.

"The economy is improving, but I don't think it's improving fast enough," Burgess said.

State officials have said a tight budget forced them to launch estate recovery, which is required by federal law. Under the plan, Georgia will seek repayment of Medicaid benefits received by people 55 and older.

State officials have said they expected to collect $5 million in the first year from the estates of Medicaid recipients. In a year, about 39,000 Georgians age 55 and older receive nursing home coverage through Medicaid.

Medicaid pays at least $36,000 for the care of an individual residing in a nursing home for a year.

The changes will also affect an additional 15,000 Georgians in that age group who receive other types of Medicaid long-term care — community or home-based services. Hospital and prescription drug costs for the recipient of long-term care will also be targeted.

In some cases, the state also will place liens on homes before recipients die.

William Pinkney, whose parents both receive Medicaid-funded community services, told the board that his father's dream is to pass on his Atlanta home to his heirs. Pinkney said he may pull his parents out of the community program. Pinkney's mother, 84, has Alzheimer's disease, and his father, 92, has congestive heart failure.

Community Health board member Frank Rossiter, a Savannah physician, questioned the agency staff sharply about projected savings and details about the proposals. "I'm disturbed by a number of different aspects of it," he said. "There are going to be a lot of lawyers making a lot of money challenging this in court."

Community Health's general counsel, Neal Childers, said Georgia's definition of a person's estate is broader than in some other states.

Texas' rules, awaiting federal approval, are much less aggressive than Georgia's, experts say. Texas, unlike Georgia, plans to exempt from estate recovery those Medicaid recipients who have been receiving long-term-care services at the time of the rule change.

Texas won't place liens on people's homes. And Georgia, to meet its savings target, will try to recover spending on long-term care services back to August 2001. There's no such retroactive recovery in Texas.

Georgia raised the maximum value of the estates exempted from estate recovery to $25,000 from its original proposal of $10,000. The amount in Texas is $50,000.

"The Texas rules would be less burdensome on the residents and their families," said Becky Kurtz, Georgia's ombudsman for long-term-care. And the Texas exemption for people currently receiving long-term care "gives a sense of fairness to the process," she added.

http://www.ajc.com/business/content/business/0704/15medicaid.html