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MassHealth’s Estate Recovery May Cause Some Families To Incur Undue Financial Hardship.

The audit recommends MassHealth establish a cost-effectiveness threshold and improve promotion of its waiver process for members’ survivors in order to prevent financial hardship.

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The amount of money MassHealth seeks to recover through its estate recovery process may cause some families to incur undue financial hardship. Specifically, although MassHealth allows undue-hardship waivers, only a small number of members’ survivors actually petition for them and even fewer are approved. The resulting financial hardship could place a burden on families. Also, MassHealth pursues estate recovery amounts below $25,000, which may not be cost effective.

Estates that cannot pay MassHealth expenses because of limited resources, and that meet the eligibility requirements of Chapter 515.011(D) of Title 130 of the Code of Massachusetts Regulations (CMR), can apply for undue-hardship waivers. Our testing determined that only 152 undue-hardship waivers were applied for during the audit period and 31 (20%) of those were granted.

Waiver Status

Number of Cases

Claim Amount

Percentage of Cases






















Federal law allows states to waive estate recovery when it is not cost effective and the cost-effectiveness threshold is made public through the state’s official Medicaid plans. However, 46% of MassHealth’s estate recoveries during the audit period were for nominal amounts of $25,000 or less, and the total of these recoveries ($3,430,026) represented only 4% of the total cash receipts for the audit period.

Authoritative Guidance

Under the Omnibus Budget Reconciliation Act of 1993, every state must seek reimbursement from its Medicaid beneficiaries’ estates upon their deaths for (at a minimum) long-term-care expenses, which can include nursing and prescription costs paid for Medicaid members. However, this law does not set a specific cost-effectiveness threshold for states to follow. Sections 31 and 32 of Chapter 118E of the Massachusetts General Laws require reimbursement for all Medicaid expenses paid and allow MassHealth to charge estates interest on unpaid claim balances. Section 6B of Chapter 231 of the General Laws states that interest is charged at 12% per year. MassHealth has created an undue-hardship waiver under 130 CMR 515.011(D)(b), which lists the four conditions that must exist to seek relief from this process.

Some states,2 such as Georgia, do not pursue estate recovery amounts under $25,000; in other words, $25,000 is their cost-effectiveness threshold. Rule 111-3-1-.07 of the Rules and Regulations of the State of Georgia states, “Estates with a gross value of $25,000 or less are exempt from estate recovery.” Massachusetts has not established a cost-effectiveness threshold and pursues even nominal recoupments (some as low as $19). However, we believe that such a threshold would represent a best practice for a cost-effectiveness threshold that Massachusetts should follow.

Reasons for Issue

Massachusetts has not established a cost-effectiveness threshold for recovery from estates with minimal assets. In addition, MassHealth does not actively promote its undue-hardship waiver process for its members’ survivors; this resulted in few applications for waivers, which in turn led to even fewer approvals.


  1. MassHealth should establish a cost-effectiveness threshold to prevent undue financial hardship for members’ survivors.
  2. MassHealth should better promote its undue-hardship waiver process for members’ survivors.

Auditee’s Response

MassHealth agrees with OSA’s recommendations . . . and has implemented policy reforms effective May 14, 2021 that address the issues contained in those recommendations.

MassHealth has already promulgated regulations that took effect on May 14, 2021, implementing a cost effectiveness threshold entirely exempting estates with a total value of $25,000 or less from estate recovery. Accordingly, MassHealth no longer files claims in any probate estate with $25,000 or less of assets. . . .

MassHealth has already promulgated regulations effective May 14, 2021, significantly expanding its criteria for undue hardship waivers. MassHealth has also greatly streamlined the waiver process and created new hardship waiver request forms that provide clear, detailed instructions on how to qualify for the waivers. These forms and instructions are available online . . . and are also sent out by mail to all estate representatives when MassHealth files a claim in a probate estate.

The auditee also said, “It is estimated that these expanded hardship waivers will return approximately $17,200,000 to Massachusetts families each year.”

2.     The states are Alabama, Alaska, Arkansas, Colorado, Connecticut, Georgia, Idaho, Kansas, Louisiana, Michigan, Mississippi, Nevada, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Utah, Vermont, and Virginia.

Date published: June 28, 2021