DC Medicaid Estate Recovery — What the District Can and Cannot Recover

How Estate Recovery Works in the District of Columbia

When a Medicaid beneficiary in DC dies after receiving long-term care services — EPD Waiver home care, skilled nursing facility stays, or related hospital and prescription drug services — the District is federally mandated to seek repayment from the deceased person's estate. This applies to benefits received at age 55 or older.

The Department of Health Care Finance (DHCF) administers the recovery program through its Third Party Liability Division. After a beneficiary's death, DHCF sends a Notice of Proposed Recovery to the estate's representative.

But here's the detail that changes everything for families planning ahead: DC's recovery authority is limited to assets that pass through probate.

The Probate-Only Rule

Under DC Municipal Regulations, the "estate" for recovery purposes means real and personal property owned by the decedent at death that passes through the probate process. Assets that transfer automatically to another person — by operation of law or by the terms of a legal instrument — are completely exempt.

This means DHCF cannot recover from:

• Homes held in joint tenancy with right of survivorship. The surviving joint tenant inherits by operation of law, outside probate.
• Bank accounts with payable-on-death (POD) designations. These transfer directly to the named beneficiary.
• Transfer on Death (TOD) deeds. DC Code §§ 19-604.01 through 19-604.19 allows property to pass directly to a named beneficiary without probate.
• Assets in properly structured irrevocable trusts. Trust property isn't owned by the decedent at death.
• Life insurance proceeds. These pay to the named beneficiary, not the estate.
• Retirement accounts with named beneficiaries. IRAs, 401(k)s, and similar accounts bypass probate.

What Recovery Actually Covers

DHCF recovers payments for nursing facility services, EPD Waiver services, and related hospital and prescription drug costs. It specifically excludes Medicare cost-sharing payments — Part A and Part B premiums, deductibles, and co-insurance — incurred on or after January 1, 2010.

During the probate process, DHCF places a lien on the deceased's home. However, the District cannot enforce any lien or pursue recovery while any of these people continue to live in the home:

• A surviving spouse
• A child under age 21
• A blind or permanently disabled child of any age

The 30-Day Window to Respond

After receiving the Notice of Proposed Recovery, the family representative has exactly 30 calendar days to submit a written application for an exemption or an Undue Hardship Waiver. DHCF must issue a final decision within 30 days of receiving a complete application.

Hardship waivers may be granted when:

• The home is the sole income-producing asset of a family business
• Recovery would leave an heir without shelter and they lack the means to secure alternative housing
• Recovery would cause an heir to become eligible for public assistance

Missing this 30-day window doesn't forfeit the right to contest recovery entirely, but it significantly weakens your position and can result in recovery proceeding without your input.

Protecting the Home Before a Crisis

The simplest protection strategy in DC is recording a Transfer on Death deed while your parent is still alive and competent. A TOD deed costs only the Recorder of Deeds filing fee, doesn't trigger the five-year Medicaid lookback penalty (because no transfer occurs during the owner's lifetime), and removes the home from the probate estate entirely.

The DC Hospital-to-Home Transition Toolkit includes step-by-step TOD deed instructions, the Medicaid spend-down calculator, and the full estate recovery timeline — so you can protect assets while navigating the hospital discharge process.

See more District of Columbia guides →