THE REVOLUTION IN CALIFORNIA’S MEDI-CAL RECOVERY PROGRAM

By Peter S. Stern, Esq.*

I. INTRODUCTION AND OVERVIEW

Governor Brown’s signature on SB 833 on June 29, 2016, turned nearly 25 years of California law on its head and opened the door to a new era in recovery under the state’s Medi-Cal program. The new law applies to individuals, including MediCal recipients or their spouses, who die on or after January 1, 2017, as well as Medi-Cal recipients who died before 2017 and who are survived by spouses who died on or after January 1, 2017.¹ The law eliminates recovery for most non-nursing home services and restricts the possible recovery pool to the decedent’s probate estate, narrowly defined as what is subject to a formal probate procedure. If the Medi-Cal beneficiary is survived by a spouse or registered domestic partner, as well as other categories of individuals, the state cannot recover. In many regards, the new law takes recovery back to 1981, when Medi-Cal recovery was first started. Practitioners should note with caution that the new recovery law does not apply to payback due under legislation and regulations affecting special needs trusts.²

II. THE EARLY HISTORY OF MEDICAID RECOVERY