Today, the Nebraska Supreme Court issued the opinion In re Estate of Cushing, 283 Neb. 571 (2012), in which the Court emphasized that DHHS’ claim for Medicaid benefits paid out during the life of the recipient is a claim that arises before the recipient’s death. It is therefore subject to the time limitations set forth in Neb. Rev. Stat. §30-2485(a) (Reissue 2008) which outlines when claims arising prior to the decedent’s death must be filed. Under § 30-2485(a)(1), a creditor has two-months to file a claim if the creditor was given proper notice of the decedent’s death. In contrast, under § 30-2485(a)(2), a creditor that does not receive proper notice of the decedent’s death has three years to present a claim.

In Cushing, the Department of Health and Human Services (DHHS) paid out $78,594.15 for medical assistance to the Cushing after she was 55 years or older. Cushing subsequently died and an estate opened. Notice of the informal probate was first published in an Omaha paper on July 2, 2012. The notice listed September 2, 2010 as the deadline for filing a claim. On September 14, 2010, DHHS filed a request for notice and on January 18, 2011, filed a claim for Medicaid benefits received by Cushing pursuant to Neb. Rev. Stat. § 68-919 (Reissue 2008).  After the estate disallowed the claim, DHHS filed a petition for allowance of the claim and argued that it was not given notice in accordance with Neb. Rev. Stat. §§ 25-520.01 and 30-2483 (Reissue 2008), which meant that under Neb. Rev. Stat. § 30-2485(a)(2) (Cum. Supp. 2010), it had 3 years from Cushing’s death to file its claim. The Court agreed.

The Court first determined that a claim for Medicaid benefits is a claim that arises during the life of the recipient and is therefore subject to the time limitations set forth in § 30-2485(a). Whether a claim is subject to the two-month limitations period set forth in § 30-2485(a)(1), or the three-year period set forth in § 30-2485(a)(2), depends upon whether DHHS was given notice in compliance with § 25-520.01 and § 30-2483. Section 30-2483 requires that the estate send notice to DHHS if the decedent was 55 or older at the time of death, or resided in a medical institution. Moreover, § 25-520.01 requires the estate to mail notice to known and interested parties within five days after the first publication of notice. In prior cases, the Court had determined that failure to comply with these two sections subjected the creditor to the three-year period provided by § 30-2485(a)(2). In Cushing, because the estate did not mail notice to DHHS within five days of July 2, 2010, the date the notice to creditors was first published, the estate failed to comply with § 25-520.01 and § 30-2483 and the three-year limitations period of § 30-2485(a)(2) applied. Thus, DHHS had three-years to present its claim.