Distinguishing cases from other states that permitted such recovery, the court held that the recovery was impermissible in Missouri because the State had not adopted an expanded definition of “estate” that included the estate of a surviving spouse.

            The federal Medicaid statute allows States to seek recovery of Medicaid funds only from the estate of the Medicaid recipient. However, it permits states to adopt a broad definition of “estate” that would include non-probate transfers to a surviving spouse. See 42 U.S.C. § 1396p(b).

Raymond Shuh was predeceased by his wife Lucille, a Medicaid recipient. Her estate was not probated. Following Raymond Shuh’s death, the State attempted to recover Medicaid assistance from his estate, as authorized under Missouri statutes. See Mo. Stat. §§ 473.398-399. The estate challenged this recovery as inconsistent with § 1396p(b), and the trial court agreed.

            Courts in several states have previously upheld recovery from surviving spouses’ estates. See In re Laughead, 696 N.W.2d 312 (Iowa 2005); Estate of DeMartino v. Div. of Medical Assistance & Health Services, 861 A.2d 138 (N.J.Super.Ct.2004); State of Nevada Department of Human Resources v. Ullmer, 87 P.3d 1045 (Nev.2004); In re Estate of Jobe, 590 N.W.2d 162 (Minn.App.1999); In re Estate of Knudson, 970 P.2d 6 (Idaho 1998). In these states, however, state law defined “estate” broadly to include non-probate transfers to a surviving spouse.

            The plaintiff relied on Hines v. Dept. of Public Aid, 850 N.E.2d 148 (Ill. 2006), in which Illinois’s supreme court held that the use of that state’s recovery statute to seek recovery from a surviving spouse’s estate exceeded § 1396p(b). The Illinois court distinguished the above-cited cases, noting that unlike those states, Illinois had not adopted an expanded definition of “estate,” and thus the state’s recovery attempt exceeded the bounds of § 1396p(b).

            The Court of Appeals held that recovery from a surviving spouse’s assets is congruent with federal law where those assets fit within the state law definition of the recipient’s estate. However, the court further held that Missouri law did not include non-probate transfers within the definition of “estate,” and therefore (as in Hines) the attempted recovery from Raymond Shuh’s estate was improper.