After a life-altering event, a victim's focus is generally on recovery
and restoring the quality of life before a car accident or a surgeon's
malpractice. However, medical bills can quickly escalate into hundreds
of thousands of dollars and a settlement or judgment is critical for victims
to repay healthcare costs. Rather than alleviate financial burdens on
those covered by federal healthcare programs, Congress has recently enacted
statutory amendments that will have the effect of preventing plaintiffs
from obtaining recoveries until they have reimbursed Medicaid and Medicare.
Specifically, a private tort plaintiff can be forced to repay the government
in full for all medical expenses before receiving any portion of a tort recovery.
Medicaid-Third Party Liability Statute
Currently, under the Medicaid-Third Party Liability statute, Medicaid is
generally the payer of last resort for a recipient's medical costs.
This statute ensures that if there is another primary payer with responsibility
for a medical bill, that other payer is billed first, before Medicaid.
For example, if a Medicaid recipient is hit by a car, becomes injured
and requires hospital stays and physical therapy, the insurance held by
the driver of the car would be considered the primary payer before Medicaid
would be ultimately responsible for any medical bills. However, changes
to the Medicaid-Third Party Liability Statute substantially alter this
process, negatively impacting plaintiffs.
Specifically, the new law overturns a Supreme Court decision, United States
vs. Ahlborn, 547 U.S. 268 (2006), where Medicaid was limited in what it
could recover from a settlement or judgment to the amount awarded for
medical care. Ahlborn held that a successful tort plaintiff can be forced
to reimburse federal healthcare programs for tort-related medical expenses
only in proportion to the judgment or settlement representing payment
for medical expenses. For example, if the damages attributed to medical
expenses is fifty percent and a plaintiff settles for $500,000, the government
can obtain a lien for no more than $250,000.
Unfortunately, under the new law, Medicaid can claim all of a settlement
up to the amount spent by Medicaid for reimbursement. The result is that
plaintiffs who are Medicaid recipients--an already financially vulnerable
population--will recover less and in many cases, will be unable to pursue
claims at all because any recovery would be subject to reimbursement to
Medicaid. Moreover, even in cases where a judgment is for a larger amount,
plaintiffs will recover less money overall because Medicaid will be owed
a higher reimbursement amount. Ironically, the government also suffers
under this change. Whereas previously Medicaid would receive some compensation
from a settlement, after the new law, there may no longer be any settlement
funds from which Medicaid can draw upon since victims will be disinclined
to bring suit at all.
Reach Out to Our Attorneys
At The Pittman Firm, we have counseled clients through hundreds of settlements
where financial obligations to Medicaid was a consideration. Because each
case is different, call us today to schedule a consultation and ensure
that you satisfy all of the requirements under the Medicaid-Third Party
Liability statute while still being able to obtain appropriate compensation
from the parties responsible for your injuries.