MHL ARTICLE 81 - New York State Unified Court System

there may be no recovery by the State for the correctly paid Medicaid except to the extent that
recovery was available against a right of action or from a recovery against a responsible third party,
citing 42 USC 1396a (a)(18); 42 USC 1396p(b) (1); NY Soc. Serv. Law 369 (2)(b)(i); NY Soc. Serv.
Law 369 (2) (c); NY Soc. Serv. Law 104-b; and 18 NYCRR 360-7.11(b)(5). Also, citing the line
of cases under Ahlborn, the State's right of recovery from responsible third parties is limited to
payment for medical expenses. That is, federal law "does not sanction an assignment of rights to
payment for anything other than medical expenses - not lost wages, not pain and suffering, not an
inheritance." (Arkansas Department of Health and Human Services v. Ahlborn, 547 US 268, 283-
285). Upon motion to reargue, the Appellate Division, citing Matter of Abraham XX, 11 NY3d
429) recalled and vacated its earlier decision and ordered that the DSS was entitled to recover
for the remaining portion of the corpus of the SNT, if any, the unreimbursed portion of all
medical assistance benefits provided to Ruben N. during his lifetime which were not covered
by the Medicaid lien previously satisfied.
Wong v. Daines et al, 2008 U.S. Dist LEXIS 75453 (SDNY 2008)
In calculating Medicaid benefits, only income already contained in a payback SNT, that has not
passed through the hands of the beneficiary, is sheltered. SSD income placed in an SNT, and any
income generated by it that remains in the trust, is not counted in determining the individual’s
eligibility for Medicaid. However, in calculating the amount of the Medicaid benefits and thus, in
turn the NAMI, that income is counted pursuant to 42 CFR 435.832, the relevant post -eligibility
regulation.
Matter of Samuel Erman, May 14, 2007, N.Y.L.J. 21 (col. 1)(Surr. Ct., Kings Cty.) (Surr.
Seddio)
There was no need to establish an SNT since the funds that would have been placed into the trust
were Holocaust War Reparation Compensation which were exempt assets that would not have
rendered the ward ineligible for Medicaid pursuant to18 NYCRR 360-4.6 (b)(2)(iv) and 02
OMMADM-3 (iv)(B)(2)(4).
Matter of Kaiser v. Commissioner of the NYS Department of Health, 13 Misc.3d 1211A; 824
N.Y.S.2d 755 (Sup Ct., Nassau County, 2006)
An Article 81 guardian had been appointed pursuant to an order which directed the guardian to
establish an SNT for the benefit of the IP’s disabled daughter into which the guardian would pour
the IP’s Social Security and pension income. The IP was in a nursing home and her care was funded
by Medicaid and Medicare. When the guardian tried to set up the trust as directed, the
Commissioner calculated the NAMI (Net Available Monthly Income) as including the IP’s income
described above so that there was no money left to with which to fund the trust. The Commissioner
took the position that in order to be exempt from inclusion in the NAMI, the income placed into the
trust had to be for the benefit of the IP only and could not be diverted for the daughter’s support.
After Fair Hearing, the Commissioner’s position remained the same. The guardian brought on an
Article 78 petition in Supreme Court, Nassau County to challenge the Commissioner’s decision and
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