In a ruling that could create ripple effects on state Medicaid programs around the country, Nebraska’s highest court decreed that the state may pursue payment from beneficiaries for room-and-board costs for skilled nursing stays.

“The beneficiaries of a recipient’s estate are not entitled to an inheritance at the public’s expense,” wrote Judge William Cassel in a decision made public May 12. “Because nursing facility services include room-and-board costs and other expenses, [the state health department] is
statutorily authorized to recover the sums it paid for such medical assistance from [the] estate.”

The estate of a nursing home resident who died in 2014 filed suit, claiming the Nebraska Department of Health and Human Services did not have a right to collect more than $22,000 from it to cover nursing home services, including room and board.

Attorneys for the estate called the pursuit of the funds “unconscionable and contrary to law.” They argued that Medicaid funds couldn’t be collected to cover “non-medical expenses” such as room and board. In addition, the state health department would profit from collecting Medicaid funds, they said.

The state Supreme Court justices, however, found “no distinction” between medical and room-and-board costs. They also noted that while the resident had five adult children at the time of his death, he had no dependents who could file a waiver to keep the funds. 

The court unanimously rejected the plaintiffs’ claims that Nebraska’s Medicaid program was a “moneymaking scheme,” saying the assertion bordered on the “frivolous.” The funds claimed by the state in these instances are used to pay the federal government, its partner in the Medicaid program, the court noted.