0880.010.00 TEFRA Liens – DSS Manuals

IM-177 December 16, 2019

Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) allows MO HealthNet Division (MHD) to recover expenses paid on behalf of the participant by placing a lien on the participant’s real property. The lien would then require the participant to repay the amount of medical expenses paid by MHD in the event that the property is sold or by the estate when the participant is deceased.

A TEFRA lien is placed on a property when it is established by the nursing facility that the participant is receiving long-term care on a permanent basis. The lien is removed if the participant is discharged from the long-term facility and returns home.

A TEFRA lien cannot be placed on a property unless ALL conditions are met:

The participant DOES NOT have a spouse, child under 21 years of age, or a child (minor or adult child) who is blind or permanently disabled living in the home

The participant lives in, or is going to live in, a long-term care facility

The participant owns a home or other real property

There is no reasonable expectation that the participant will be discharged from the long term care facility and resume living in the home within 120 days of admission NOTE: Participants can request a hearing if they do not agree with this expectation. Follow all hearing procedures.

EXAMPLE: Cecilia applies for Vendor coverage when she moves into a nursing home in July 2019. In December 2019, the nursing home reports that there is no expectation that Cecilia will return to her home. A TEFRA lien is placed on her home by MHD. In March 2020, Cecilia’s children sell her home. MHD recovers money spent on Cecelia’s medical expenses during the closing of the sale of the home.

EXAMPLE: Simon and Evelyn are married. In August 2019, Simon moves into a nursing home and applies for Vendor coverage. In September 2019, the nursing home reports that there is no expectation that Simon will return to his home. MHD CANNOT place a TEFRA lien on their home as Evelyn is still living in the home.

NOTE: Do not give case specific advice regarding TEFRA liens. Encourage participants and/or representatives to contact MO HealthNet Division.

TEFRA liens are managed and overseen by MO HealthNet Division’s Cost Recovery Unit. They may be contacted directly:

Phone: 573-751-2005

Email: MHD.CostRecovery@dss.mo.gov

Mail: Cost Recovery Unit, PO Box 6500, Jefferson City, MO 65102-6500