I read that too, Sorcha. But the operative word is "attempt". The states that sign on to that particular bit are required to try to recover the monies expended from those deemed to have Third Party Liability. Basically, what that means is that the heirs must show whether or not they meet the legal standards set for recovery. TITLE XIX 4.22(d)(1)Of the states I found on the first 10 pages of the 30-page website on Liens and Recovery, 14 states don't attach liens onto the property of the nursing home inmate on Medicaid post death; 21 do. In addition, most of the states reserve the right to attach liens on real and personal property when a court judgment finds 'incorrect benefits' to have been paid out. (Utah does not, however, seize "personal effects where there are surviving heirs".
Since Medicaid is a partnership between individual states and the Federal Government, the states enjoy some autonomy and vary a good deal.
If anyone is interested further, acquire the U.S. Health & Human Services Handbook Title XIX 42 CF4.433.36 ©1902 (a)(18). Any local HSS office should have a copy. When I worked at Health and Social Services, we often referred to it.
Ebbie