In re Abad

540 P.3d 244

In the MATTER OF the ESTATE OF Fe Perez ABAD

In the Matter of the Estate of Sandra Lee Boatner

Supreme Court Nos. S-18380

S-18450 (Consolidated)

Supreme Court of Alaska.

December 22, 2023

Karen L. Lambert, Lambert Law LLC, Kodiak, for Estate of Abad.

Heather M. Brown, Franich Law Office, LLC, Fairbanks, for Estate of Boatner.

Laura Fox, Senior Assistant Attorney General, Anchorage, and Treg R. Taylor, Attorney General, Juneau, for State of Alaska.

Before: Maassen, Chief Justice, and Carney, Borghesan, and Henderson, Justices. [Pate, Justice, not participating.]

OPINION

BORGHESAN, Justice.

I. INTRODUCTION

Under Alaska's probate code the deadline for filing a claim against a decedent's estate depends on when the claim arose. For claims arising "before the death of the decedent, ... whether due or to become due, absolute or contingent," the creditor must file within four months after the representative of the estate first published notice to creditors.¹ For claims arising "at or after the death of the decedent," the creditor must file within four months after the claim arose.² The question in these consolidated appeals is which deadline applies to the State's claim against the decedent's estate for reimbursement for Medicaid services provided to the decedent while alive.

We hold that Medicaid estate recovery claims arise before death and therefore must be filed within four months after notice to creditors. Although the State may not pursue these claims until after the Medicaid beneficiary has died, these claims arise when Medicaid services are provided, not when the claims become enforceable.

II. FACTS AND PROCEEDINGS

A. Statutory Framework

"The Medicaid program is ‘a cooperative federal-state partnership under which participating states provide federally-funded medical services to needy individuals.’ "³ In determining who qualifies for Medicaid, federal law excludes the value of a person's home.⁴ As a result some people receive Medicaid services despite owning a valuable asset. Congress addressed this "anomaly" by authorizing states to seek reimbursement for the cost of certain Medicaid services from the estates of deceased beneficiaries.⁵ Estate recovery was initially optional for state Medicaid programs.⁶ But in the face of rapidly escalating Medicaid costs, Congress amended the law to require states to conduct estate recovery.⁷ Because the State of Alaska has chosen to participate in Medicaid, it is obliged to comply with this federal statutory requirement.⁸

Accordingly the Alaska Legislature enacted AS 47.07.055, authorizing the State's Division of Health Care Services to seek reimbursement from the estates of deceased Medicaid recipients. Under this statute, "after an individual's death, the individual's estate is subject to a claim for reimbursement for [Medicaid] payments made on behalf of the individual ... to the extent that those services were provided when the individual was 55 years of age or older."⁹ The claim "may be made only after the death of the individual's surviving spouse, if any," and only if the individual has no surviving child who is younger than 21, blind, or totally and permanently disabled.¹⁰ Regulations adopted under AS 47.07.055 provide that the State will pursue estate recovery claims only if "the potential recovery amount would result in twice the administrative and legal cost of pursuing the claim, with a minimum pursuable net amount of $10,000."¹¹ The State may also waive estate recovery where it would cause undue hardship.¹²

B. Abad Proceedings

Fe Perez Abad passed away on August 19, 2020 after receiving Medicaid home and community-based services. Her daughter opened an informal probate case approximately two months later and was appointed the personal representative of Abad's estate. Abad's estate issued its first notice to creditors on October 19, 2020. On December 30, 2020 — less than four months after the estate published its first notice to creditors, but more than four months after Abad's death — the State filed a claim against the estate for $200,621.62 in Medicaid reimbursement. The estate disallowed the State's claim.

The State then petitioned the superior court to allow its Medicaid reimbursement claim. The estate objected, arguing the claim was time-barred. The estate reasoned that because the claim could be asserted only against Abad's estate, and not against Abad herself while alive, the claim arose at the time of Abad's death for purposes of AS 13.16.460. Because the claim had not been filed within four months of her death, the estate argued, it was untimely. The State argued that its claim arose before Abad's death, triggering the "before death" notice-based filing deadline under AS 13.16.460. Accordingly, the State argued, it was timely because it was filed within four months of when notice to creditors was first published.

The superior court agreed with the estate, holding that the State's Medicaid recovery claim did not arise during Abad's lifetime and should have been brought within four months of her death. Noting that no published Alaska decision addressed the interaction of AS 47.07.055 and AS 13.16.460, the superior court examined decisions from the Nebraska, Iowa, and Washington supreme courts. The superior court also rejected the State's policy argument that a deadline tethered to death, rather than notice to creditors, would hamper the State's ability to pursue estate recovery in accordance with federal law.

The State filed a motion for reconsideration, which the superior court denied.

The State then appealed.

C. Boatner Proceedings

Sandra Lee Boatner passed away on September 1, 2020. During her life she was the beneficiary of Medicaid services. Roughly two months after her death, David E. Cook opened an informal probate case; he was appointed the personal representative of her estate. The estate issued its first notice to creditors on December 22, 2020. On March 24, 2021 — less than four months after the estate published its first notice to creditors, but more than four months after Boatner's death — the State filed a claim against the estate for $300,647.29 in Medicaid reimbursement.

In May of that year the estate disallowed the claim, maintaining that it was not timely filed. The State petitioned the superior court to permit its claim against Boatner's estate, asserting that its claim was timely filed under AS 13.16.460(a)(1). The parties each moved for summary judgment. Their arguments paralleled those in the Estate of Abad litigation.

A standing master recommended that the superior court adopt the State's reading of Alaska's probate filing deadlines. The standing master acknowledged that Medicaid estate recovery claims become enforceable after death. But because these claims concerned medical expenses that Boatner incurred during her lifetime, the standing master concluded they arose before her death. The superior court adopted the standing master's recommendation.

Boatner's estate filed a motion for reconsideration, and the superior court denied it. The court explained that the State seeks to recover debt arising from medical expenses, and that "[a]ll medical expenses occur while the person is still deemed alive." The court further explained that the provision of AS 47.07.055(a) limiting recovery until after the recipient's death "does not shift the accrual date" or "change the fact that the person still received that care during her lifetime." Rather, the court described this provision as "an offer of grace for the benefitted person to live out her life without worry of being refused care for lack of payment."

Boatner's estate appealed. We consolidated the Boatner estate's appeal with the Abad estate's appeal for purposes of oral argument and decision.

III. DISCUSSION

These two cases present a single question of statutory interpretation: For purposes of the probate code's claim filing deadlines under AS 13.16.460, does a Medicaid estate recovery claim under AS 47.07.055(e) arise "before death" or "at or after death"? The answer determines the deadline for the State to present its claim for reimbursement to the estate.

Statutory interpretation is a question of law that we review de novo.¹³ "We apply our independent judgment to the interpretation of Alaska statutes and will interpret statutes ‘according to reason, practicality, and common sense, taking into account the plain meaning and purpose of the law as well as the intent of the drafters.’ "¹⁴ "Statutory interpretation begins with the plain meaning of the text, but it does not stop there."¹⁵ Instead, we subscribe to a "sliding scale approach to statutory interpretation,"¹⁶ under which "[t]he plainer the statutory language is, the more convincing the evidence of contrary legislative purpose or intent must be."¹⁷

We conclude that Medicaid estate recovery claims arise before death for purposes of the probate code's filing deadline. This conclusion is supported by statutory text, the underlying legislative purpose of the Medicaid estate recovery statute, and the weight of precedent from other jurisdictions.

A. Statutory Text Suggests That Medicaid Estate Recovery Claims Arise Before A Beneficiary's Death Even Though They Cannot Be Enforced Until After Death.

The estates emphasize the text of the estate recovery statute. They argue that because the State may bring a Medicaid estate recovery claim only "after an individual's death" and only against the deceased individual's estate,¹⁸ the State's claim for reimbursement arises "at or after" the individual's death.¹⁹ The State instead emphasizes the text of the probate code. It points out that the probate code refers to when claims "arise," rather than when they "accrue," and recognizes that claims arising before death include those that are "due or to become due, absolute or contingent."²⁰ Accordingly the State argues that a Medicaid estate recovery claim arises when the services are provided to the beneficiary, even if it is not enforceable and therefore...