Medicaid Liens

Medicaid is a government-run health insurance plan that provides health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities. The states and federal government jointly fund Medicaid, but the states administer it.

When Medicaid has made payments for medical expenses related to an injury, it may assert a lien against the beneficiary’s recovery under state Medicaid third party recovery laws. Federal law requires states to enact recovery statutes; however, Medicaid plans are administered by each state, and therefore, each state may meet this requirement differently. 

Medicaid Reimbursement- Arkansas Dept. of Health & Human Services v. Ahlborn, 547 U.S. 268 (2006)

Under the Ahlborn decision, a state’s Medicaid department will be limited to reimbursement from only the portion of a judgment or settlement representing payment for medical expenses.

Under this holding, states are prohibited from seeking reimbursement for Medical costs from settlement proceeds intended to cover items other than medical expenses, such as pain and suffering and lost wages. The United States Supreme Court held that the federal anti-lien statute prevents states from attaching or encumbering the non-medical portion of the settlement or judgment. The Ahlborn decision was also upheld in Wos v. E.M.A., 133 S. Ct. 1391 (2013).

What Does This Mean for Clients with Medicaid Liens?

Before this ruling, if a Medicaid recipient settled his or her entire action against a third party and Medicaid paid that amount or more to medical providers on his or her behalf, nothing in the state statutes would preclude the Medicaid agencies from receiving the entire settlement, leaving the recipient with nothing.

Under the Ahlborn holding, third party settlement funds intended to compensate for non-medical damages, such as pain and suffering, lost wages, or any other damages other than medical expenses, will not be subject to the reach of state Medicaid agencies seeking recovery.

It is essential for attorneys handling these issues to familiarize themselves with state Medicaid lien laws, Ahlborn, and take steps to educate themselves and their clients on how best to protect their Medicaid health insurance coverage. At ZipLiens, our team of resolution experts has the knowledge and experience to assist your firm in reducing Medicaid liens. We can take all of the necessary steps to ensure that your client is getting the best possible reduction on all of their Medicaid liens.