Medicaid Fair Hearing Dismissed Where Estate was Not Opened

In a recent case before the Georgia Office of State Administrative Hearings, the State filed a Motion to Dismiss the applicant’s Fair Hearing. The applicant died while the application was being processed and no estate was opened. The State argued that the designation of an authorized representative premised on a power of attorney terminated with the applicant’s death. Thereafter, only the estate representative could continue the appeal. The Administrative Law Judge granted the State’s motion and dismissed the appeal. Whether this was a correct result is an open question because one someone is appointed as authorized representative, the regulation states

“The power to act as an authorized representative is valid until the applicant or beneficiary modifies the authorization or notifies the agency that the representative is no longer authorized to act on his or her behalf, or the authorized representative informs the agency that he or she no longer is acting in such capacity, or there is a change in the legal authority upon which the individual or organization’s authority was based. Such notice must be in accordance with paragraph (f) of this section and should include the applicant or authorized representative’s signature as appropriate.” There is nothing in the the regulation indicating that death somehow terminates the authorized representative’s authority.

A bill will be introduced in the Georgia legislature to reverse this result, but for now the safest course of action is to open an estate if there is an adverse decision and a fair hearing is required after the applicant dies. The federal regulations look to state law in determining whether an appointment is sufficient so a change in Georgia law would reverse the result in this case.

While I respect the ALJ who decided the case, and I actually wrote on this subject almost three years ago somewhat agreeing with the technical result, the decision is still unfair. Here’s why: Most estates required to continue a Medicaid application will be insolvent. Insolvent estates are time consuming and are usually a mess. Unless there is something in the estate requiring probate (e.g., a home subject to estate recovery), the Medicaid applicant’s family has no incentive to open an estate. That means the health care provider trying to get paid must open an estate as a creditor. Assuming the application is resolved and coverage is approved, Medicaid pays the health care provider directly so nothing flows through the estate. There would, however, still be attorney fees (probably paid by the health care provider), court costs (probably paid by the county or the health care provider), and court resources would be wasted. While this is a practical reason for not requiring an estate, other reasons such as basic due process and the right to an appeal also indicate that everyone should have the to an appeal.

If you believe this situation should be fixed, you can get your Georgia Representative or Senator’s contact information on the Georgia General Assembly website.