PERSONAL INJURY AND MEDICAID: WHY WOULD STATE GET INVOLVED IN PERSONAL INJURY SETTLEMENT?

It is a fortunate state of affairs that it is happening less and less, with the requirement for every American obtain health insurance under the Affordable Care Act (often called Obamacare), that some people do not have proper health insurance coverage for a catastrophic injury. It is still unfortunate that is happens often enough. As such, either a loved one or when you are well enough retain an attorney in a personal injury suit against the offending party or entity for your past pain and suffering, future anticipated pain and suffering and future medical bills.

Most personal injury attorneys know that any settlement or jury (or even judge if the matter proceeded to trial without a jury) award should earmark or indicate the amount of the award or settlement for your future medical expenses because the government will get involved and assert a lien over any financial award for medical expenses. This overall schema enables you to effectuate a meaningful change in your life, by satisfying the state’s obligation to recoup its medical costs and leaves some money to you to live at a level above the basic minimum that medicaid insures.

It must be asked, however, what of the cases where there is no designation of the settlement or verdict that speaks to the amount awarded for medical expenses and what is pain and suffering or other line awards. Both Congress and the Federal Supreme Court dealt with these issues. Congress enacted 42 U.S.C. § 1396p(a)(1) as part of the Social Security Act that prohibits the government from asserting a medicaid lien against the property of a medicaid recipient, except under certain clearly delineated circumstances. One of those delineated circumstances is when the state may seek recovery for “any medical assistance correctly paid”. The Supreme Court dealt with this issue in 2013, in the case of Wos v. E.M.A. when it ruled that a state may only asset a medicaid lien against that portion of a personal injury settlement or verdict that is specifically designated for medical expenses.

PRIOR TO 2013

In 2006 the Federal Supreme Court issued an opinion in the case of Arkansas Department of Health and Human Services v. Ahlborn which held that a state may not assert a lien against non-medical expenses. It did not, however, rule on the narrow issue of whether a state may assert a lien against a settlement, asset or other property earmarked to pay for the medical expenses of a medicaid recipient or former medicaid recipient. This ruling created some problems throughout the nation as it sowed confusion about when a state may assert a medicaid lien.

For example, in 2009, the case of Tristani v. Richman out of the Western District of Pennsylvania denied the state the right to assert a medicaid lien against the settlement proceeds in a personal injury case. According to the federal District Court, a state is entitled to assert a lien throughout the life of a case or even intervene. Once the case it over, however, it cannot entitled to then assert a medicaid lien against the settlement proceeds. There is now greater clarity as to what the state is entitled through the use of a Medicaid lien. As noted above, the end result is that whenever there is the possibility of a medicaid lien, Plaintiff’s personal injury must work to insure that a certain amount is specifically designated for medical expenses. This enables the injured party to use the remaining money without threat of seizure by the government.

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