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Medicare Liens + Medicaid Liens: What is Left For The Plaintiff?

Medicare liens should never take more than one-third of any settlement or verdict amount.  If you ever experience a situation where the MSPRC or CMS claims more than one-third of that amount you have made a mistake.  Any lien resolution provider should quickly resolve such an issue.

But, Medicare will never factor an ERISA lien, a private insurer lien, or even a Medicaid lien into its lien reductions.  In addition to the Medicare lien, state Medicaid agencies claim a right to subrogation.  These agencies are limited by federal law, specifically, Arkansas Dept. of Health and Human Services, et al. v. Ahlborn, 547 U.S. 268 (Sup. Ct. 2006).  The Ahlborn decision clearly limits state Medicaid liens to the medical portion of a settlement or verdict.  While the MSPRC, CMS, and any other Medicare agency claims it is not bound by Ahlborn, it is Medicare’s policy to accept a court-ordered allocation on the merits of the case.

But what happens when Medicare liens and Medicaid liens are stacked?  Can the client be left with nothing?

Technically yes.  Your client could be left with nothing.  But why would a plaintiff go through the inconvenience of litigation if liens took up his entire settlement?  This question is precisely why Medicaid liens are reduced through negotiation.  For the most part, Medicaid representatives from any state will work with you to ensure your client receives something.  In addition, Medicare liens can be reduced through the waiver process in some circumstances.

Unfortunately, there still exists a possibility that Medicare takes one-third of your post-costs settlement, and then, with only one-third remaining, Medicaid also takes a large portion.  But if you plan ahead, work with the agencies, and resolve the healthcare liens early, you can salvage some funds for your clients.

If you need assistance with the complex issues of Medicare lien resolution or Medicaid lien resolution, please contact us.

Ryan J. Weiner
Co-Founder Lien Resolution Services
This Blog/Web Site is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

About Ryan J. Weiner

Co-Founder of Lien Resolution Services, LLC, a national healthcare lien resolution firm. Our goal is to assist in the fair administration and resolution of healthcare liens on personal injury cases. Please visit our website for more information: www.lienresolutionusa.com.

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