Was Kaiser's property takeover justified?

So, what do you think of this?  Kaiser Permanente seized, then auctioned off, the home of a Marin County woman to pay her hospital bills after she left the hospital and was placed under the guardianship of Marin County. 

Now for some background.  The 85-year-old homeowner had refused to leave the hospital and, after 14 months, was finally evicted.  She is now living in a nursing home at state expense.  Her extended stay in Kaiser cost $1.4 million, and the sale of the home is intended to partially reimburse Kaiser for the expense of her stay, with 10 percent of the proceedings being placed in a trust for the patient’s care in the nursing home.

The somewhat ramshackle home had been in the patient’s family since 1910 and was given to the patient’s daughter 2 years ago. A judge subsequently ruled that the change in ownership was an illegal transfer designed to avoid paying Kaiser Permanente. The property was then awarded to Kaiser, who put it up for auction.

The auction itself only lasted about 10 minutes, with around a dozen bidders participating. The winning bid was $600,000, which is quite a bargain when you consider San Anselmo real estate in that neighborhood is in great demand, and fixers can go as high as $1 million.

The daughter is living in the home and accuses Kaiser of committing fraud.  She claims to be looking forward to a “collaborative effort” with the new owner.  It would appear to me that the battle is not yet over.  It should be interesting to follow.

What are your thoughts on this?  Is it ethical to seize property to pay medical expenses?  What about transferring property to relatives when large bills are looming?  Who is right?  Who is wrong?  Is there a middle ground?  This is somewhat of a sticky wicket and I’d love to hear your opinions.