When plaintiffs in personal injury cases are Medicaid beneficiaries, their attorneys must consider whether the recovery may impact their clients’ ongoing eligibility for benefits and whether the state Medicaid agency has any lien against the recovery under the Social Security Act. See 42 U.S.C. §§ 1396a(a)(25) and 1396k(a)(1)(A). Historically, these Medicaid liens were limited to the state’s proportionate share of injury-related medical costs it actually paid to the medical providers as a result of the injury. See Dep’t of Health and Human Svcs. v. Ahlborn, 547 U.S. 268 (2006) and Wos v. Johnson, 133 S. Ct. 1391 (2013).

This was all reversed in 2013. Buried in the Bipartisan Budget Act of 2013 is a provision that would allow States to place a lien on the entire settlement. Specifically, Section 202 of the Act amends 42 U.S.C. 1396k(a)(1)(A) to replace the words “payment for medical care from any third party” with “any payment from a third party that has legal liability to pay for care and services available under the plan.” This law was to go into effect on October 1, 2014. This provision slipped in without being noticed by most of the related legal community. Fortunately, Congress agreed to delay its enactment two years until October 1, 2016. In the meantime, efforts are being made to advocate for the reversal of this dramatic change in the law, which the U.S. Supreme Court had previously found to be inequitable. See Alhborn. This law could have serious negative consequences to the ability of the legal community to protect Medicaid beneficiaries in personal injury cases.

By: Charlotte Johnson, Esq.