How Does Medi-Cal Reimbursement Work After Death?

After a Medi-Cal recipient dies, California can seek reimbursement from the estate for certain long-term care costs the program paid, but only under narrow conditions. Recovery applies only to people who were 55 or older when they received benefits, or who were permanently institutionalized at any age. The state can reach only assets that pass through probate, and several family situations block a claim entirely. Heirs who would face financial hardship can apply for a waiver, and in some cases can keep the home under a voluntary payment arrangement.

Who the State Can Pursue

The Department of Health Care Services (DHCS) has authority to file a recovery claim against two groups. The first is any beneficiary who was 55 or older when they received covered services. The second is a beneficiary of any age who was “permanently institutionalized” — meaning a patient in a nursing facility, not expected to return home, and given the opportunity for a hearing on that status.¹

If someone was under 55 and never permanently institutionalized, the state cannot pursue recovery no matter how much Medi-Cal spent on their care. For those who fall within one of the two groups, only benefits paid on or after the 55th birthday, or during the institutionalization period, count toward the claim.²

What Costs Are Recoverable

For beneficiaries who died on or after January 1, 2017, recovery is limited to what federal law requires the state to collect: nursing facility services, home and community-based services (HCBS), and related hospital and prescription drug services provided while the person was in a nursing facility or receiving HCBS.³ Managed care premiums the state paid during those periods are also recoverable.¹

Ordinary doctor visits, outpatient prescriptions, and other routine care received outside of a nursing facility or HCBS setting are not recoverable for anyone who died on or after that date. Deaths before January 1, 2017 are governed by broader pre-existing rules that reached most Medi-Cal services, not just long-term care.³

Which Assets the State Can Reach

For deaths on or after January 1, 2017, DHCS can only collect from assets in the decedent’s probate estate: property that must pass through a court-supervised probate proceeding to change hands.⁴ A home titled solely in the decedent’s name with no transfer-on-death designation is the classic example. Bank accounts without a named beneficiary, individually titled vehicles, and other personal property that requires probate are also fair game.

Assets that bypass probate are generally out of reach. Property held in a valid revocable living trust, accounts with named beneficiaries (like life insurance paid directly to a person rather than the estate), and real property held in joint tenancy with right of survivorship all fall outside the state’s current recovery authority.³

The narrower probate-only rule is a change from earlier law. Pre-2017 deaths are still governed by a broader definition of “estate” that included living trust assets, joint tenancy interests, life estates, and certain annuities.⁵

When the State Cannot Collect at All

Even when the beneficiary and the assets would otherwise qualify, DHCS is barred by statute from filing a claim in three family situations. No hardship showing is needed; the exemption is automatic upon proof.

A surviving spouse or registered domestic partner: recovery is prohibited entirely.²
A surviving child who was under 21 at the time of the beneficiary’s death.¹
A surviving child of any age who is blind or disabled under the federal Social Security Act, with the disability existing as of the date of the DHCS claim.⁶

To claim one of these exemptions, the estate representative submits the DHCS exemption form with supporting documentation: a marriage certificate for a surviving spouse, a birth certificate or adoption papers for a child under 21, or a Social Security disability award letter or equivalent for a disabled child.⁶

Hardship Waivers for Heirs

Heirs who don’t qualify for an automatic exemption can apply for a hardship waiver if paying the claim would cause substantial financial difficulty. The application is DHCS form 6195, and it must be filed within 60 days of the date on the estate recovery claim letter.⁷ DHCS looks at whether the heir depends on estate assets for basic needs like housing or income. When granted, the waiver removes that heir’s proportionate share of the claim.

For deaths on or after January 1, 2017, additional hardship criteria apply, including a possible waiver where the estate consists of a homestead of modest value.² Missing the 60-day window can forfeit the right to request a waiver, so heirs should respond as soon as a claim letter arrives.

Keeping the Home Through a Voluntary Lien

When an heir is living in the decedent’s home and cannot pay the claim outright or get financing, DHCS may agree to a voluntary post-death lien instead of forcing a sale. The heir must show inability to pay and provide a denial letter from a financial institution confirming they could not get a loan for their share of the amount owed.⁸

Under the arrangement, the heir keeps the property and makes monthly payments. The lien accrues simple interest at 7 percent per year and becomes fully due when the heir dies, sells or transfers the property, refinances, or defaults. Heirs whose income is at or below the federal poverty level are not required to make monthly payments while their income stays at that level.⁸

What the Estate Representative Has to Do

Whoever is handling the estate must send written notice of death to DHCS within 90 days, along with a copy of the death certificate.⁹ Filing the death certificate with any other government office does not satisfy this; the notice has to go directly to the DHCS Estate Recovery Section. DHCS provides a Notice of Death form and also accepts online submissions.³ Include the beneficiary’s full legal name, Social Security number, date of birth, date of death, and Medi-Cal ID, plus the representative’s own contact information.

After receiving the notice, DHCS has four months to present its claim.¹⁰ The itemized statement lists the recoverable services and their costs. The amount owed is capped at the lesser of the total payments for recoverable services or the value of property the heirs receive from the estate. Along with the claim, DHCS sends information on the right to request a hardship waiver, the right to a state hearing, and the deadlines for each.⁹

The representative should check the statement against the actual care received — dates, service types, and totals. If everything looks right and no exemption or waiver applies, payment comes from the probate estate. Once paid in full, DHCS issues a release of claim, and the remaining assets can be distributed. No assets should be distributed to heirs before DHCS has responded to the notice.

Disputing a Claim or Waiver Denial

If DHCS denies a hardship waiver, the heir can request a state hearing within 90 days of the denial notice.¹¹ Requests go to the California Department of Social Services State Hearings Division by mail, fax, online, or phone at (800) 743-8525. Disputes over the accuracy of the claim itself — services billed for periods the person wasn’t receiving care, or totals that exceed the estate’s value — should be raised with the DHCS Estate Recovery Section before the estate distributes anything.

Planning Ahead: Partnership Policies and Benefit Records

California’s Partnership for Long-Term Care program lets people shield assets from recovery on a dollar-for-dollar basis. Every dollar a qualifying Partnership insurance policy pays in long-term care benefits protects one dollar of personal assets from both Medi-Cal spend-down rules and post-death recovery.¹² A policy that paid $150,000 in benefits, for example, would exempt $150,000 in assets from any later claim. The insurer issues a Service Summary documenting the cumulative protected amount.¹³ Partnership policies have to be bought before long-term care is needed, so this option requires planning in advance.

Medi-Cal members who are 55 or older, or who are permanent inpatients of a nursing or long-term care facility, can also request a record of how much the state has paid on their behalf. This helps families estimate a future claim. DHCS provides the information once per calendar year for a $5 fee, with requests accepted online, by phone, or by mail.¹

1
California Department of Health Care Services. Medi-Cal Estate Recovery Informational Brochure
2
California Legislative Information. California Welfare and Institutions Code 14009.5
3
DHCS – CA.gov. Estate Recovery Program
4
Department of Health Care Services (DHCS). SB833 Changes to Estate Recovery Effective January 1
5
Cornell Law Institute. California Code of Regulations Title 22, Section 50960.12 – Estate
6
Department of Health Care Services. Estate Recovery Exemptions
7
Department of Health Care Services. Substantial Hardship Criteria
8
Cornell Law Institute. California Code of Regulations Title 22, Section 50965 – Voluntary Post Death Lien
9
Cornell Law Institute. California Code of Regulations Title 22, Section 50962 – Notification
10
California Department of Health Care Services. Medi-Cal Estate Recovery Brochure
11
DHCS – CA.gov. Medi-Cal Fair Hearing
12
California Department of Health Care Services. Before You Buy – A Description of the California Partnership for Long-Term Care
13
Department of Health Care Services (DHCS) – California Partnership for Long-Term Care. Understanding the Partnership Policy