Benefit Fraud

Estate Recovery

The Office of Recoveries and Fraud Investigations also seeks reimbursement for actual costs of medical services and health premiums provided by the State of South Dakota from the estates of deceased individuals who received benefits.

Frequently Asked Questions

What is Estate Recovery?
Under South Dakota Law SDCL 28-6-23 any payment of medical assistance by or through the Department of Social Services to an individual who is an inpatient in a nursing home, an intermediate care facility for the mentally retarded, or other medical institution, is a debt due to the Department, and any payment on behalf of any person 55 years of age or older for nursing facility services, home and community based services, intermediate care facility services for the mentally retarded, hospital and prescription drug services, is a debt due the Department. The Department of Social Services collects these debts from the estates of the above individuals.

How does recovery take place?
Under South Dakota Law SDCL 29A-3-817 the Department of Social Services is entitled to receive personal property of a decedent by presenting an affidavit pursuant to SDCL 29A-3-1201 and a statement that the Department has incurred an indebtedness by paying for the medical assistance for nursing home or other medical institutional care on behalf of the decedent.

If the person paying, delivering, transferring, or issuing personal property or the evidence thereof is aware of any such indebtedness, no payment may be made, except for payment of funeral expenses, unless payment is first made to the Department of Social Services or the Department has issued a satisfaction of indebtedness.

In the case of probate or the assignment of a personal representative the Department will submit a claim to the Clerk of Court for the amount of the debt as a creditor.

What is considered an estate?
Under South Dakota Law SDCL 10-40-1 the real and personal property or interest therein of the testator, intestate, grantor, bargain or, vendor, or donor passing to individual legatees, devisees, heirs, next of kin, grantees, donees, venees, or successors and includes all personal property within or without the state and under ARSD 67:48:02:01(2) includes any funds remaining in an individual’s prepaid burial trust after the individual’s burial expenses are paid.

How soon will the Department recover the estate?
The Department is authorized to submit its affidavit 30 days after the death of the recipient, however it will allow more time if it is needed. Family may request more time to pay funeral expenses.

What if there is another name on the bank account?
Under South Dakota Law SDCL 43-46-1 upon the death of either , or any, of the joint owners of real or personal property in joint tenancy, with right of survivorship, the surviving joint owner or owners shall be liable for the debts and obligations of the deceased joint owner, or owners. The surviving owner would only be liable up to the balance of the account.

How is the recipient informed about this program?
The recipient and their legal representative is informed at the time of application for long-term care services. When the application is signed the recipient signs the notice of the Estate Recovery Program as well as other acknowledgments.

Is there any age restriction to the estates that can be covered?
No. The Department may recover from any estate if the individual was a recipient after July 1, 1994. Some restriction do apply to the program:

  1. When using the affidavit process for small estates the Department may only claim on estates less than $25,000.00 and only claim for the payments for nursing home or other medical institutional care on behalf of the decedent.
  2. When submitting a claim on the estate of an individual who was 55 years of age or older the Department is restricted to claim only for nursing facility services, home and community based services, intermediate care facility services for the mentally retarded, hospital and prescription drug services.

Is life insurance policy subject to Estate Recovery?
In some cases a life insurance policy would be subject to recovery. The key to this answer is if the insurance benefits are part of the estate, they are subject to recovery.

Are there exceptions to the Estate Recovery Program?
Yes. The Department may not seek recovery from the individual’s estate if the individual’s spouse is still living or if the individual has a surviving child who is under age 21 or is blind or disabled.

Are there cases where exceptions do not apply?
Yes. If the Department finds that the individual owns or transferred property or other assets which would have made the individual ineligible for medical assistance, the Department will seek to recover the full amount of benefits paid and the prohibitions for estate recovery do not apply.

What about the estate of a surviving spouse?  
Recovery was expanded to include recovery from the estate of a surviving spouse. Claims may be filed against the estate of a surviving spouse to recover the Medicaid benefits listed above that were received by the Medicaid recipient.

Can a surviving spouse limit the liability of the surviving spouse's estate?  
Yes. If a surviving spouse wishes to limit the amount of the surviving spouse’s estate that will be available for reimbursement of medical assistance expenditures, the surviving spouse must file a petition for limitation. The petition must be made on an Department of Social Services form and filed with the department within six months of the death of the Medicaid Recipient. The spouse must include all relevant verifications with the form.

If a petition is filed, DSS will determine the value of the surviving spouse’s estate at the time of death of the medical assistance recipient. The value will limit the amount available to DSS for recovery of its medical assistance expenditures on behalf of the medical assistance recipient.

How can I get more information about the Estate Recovery Program?
For more information contact:

  • Address: Department of Social Services,
    Office of Recoveries and Investigations
    700 Governors Drive
    Pierre, SD 57501-2291
  • Phone: (605) 773-3653
  • Email: Recoveries@state.sd.us