1725.5 Recovery Actions by Estate Recovery Unit

The ERU will determine the appropriate action to be taken in regard to filing claims. This may occur through one of several avenues including, but not limited to, agreements with heirs, claims against financial accounts, and filing of probate action.

In some circumstances the heirs of the deceased may choose not to initiate probate proceedings. In these instances ERU will determine whether to proceed with probate based on the nature of the agency's claim, value of estate assets, presence of other creditors and any other relevant information.

ERU may file a claim against accounts of a deceased recipient held at financial institutions. Notice of claim will be in writing. The notice of claim will be forwarded to any financial institution identified by ERU as a holder of a recipient's account. After notification of the claim, the financial institution is barred from distributing the account to a beneficiary until the claim of the agency is satisfied.

ERU will also file a claim for monies held in a personal needs account for a recipient at a nursing home. Nursing homes are required to forward the personal needs accounts to the agency upon the death of a recipient of medical assistance. The funds in the personal needs accounts will be used in satisfying the claim. In addition, ERU will advise the appropriate court, if probate proceedings are initiated, of any amounts received by ERU. ERU will also assume responsibility for distribution of the funds in these accounts to funeral homes to cover the unmet expenses of funeral services.

In accordance with Kansas law, funeral homes, cemeteries, life insurance companies and other entities holding funds establishing a burial or funeral agreement for a medical assistance recipient, or the spouse of a former medical assistance recipient,are required to remit any funds remaining after payment of reasonable funeral expenses to ERU. This is applicable to all funeral or burial plans regardless of the funding source, including but not limited to, bank accounts, trusts, annuities, burial insurance, life insurance and certificates of deposit. This also applies to term life insurance policies specifically assigned to a provider of funeral services. It does not apply to non-assigned life insurance polices or accounts. However, such items may become part of the estate and therefore, subject to recovery. To support this provision, all medical assistance applicants or recipients are required to notify the agency upon the establishment of any prearranged burial agreement. This information is then recorded on KEES. In addition, individuals are also required to notify the funeral home holding any pre-arranged burial agreement if medical assistance is approved. The funeral home is then required to notify the entity holding the funds associated with the prepaid account.