Medicaid And Insurance Claims

Fort Worth insurance lawyers need to have an understanding as to how to handle subrogation interests and liens. As for Medicaid, maybe this will be helpful.
Medicaid is a Federal program which is administered by the State. When discussing Federal Government liens and subrogation claims, it is prudent to assume that such liens attach and are superior to other liens, even if a person has no actual notice of them. There is case law and statutes that apply. As to the statutes see, 42 U.S.C.A. 1395(y)(b) and 42 C.F.R. 411.20, 411.23, 411.24, and 411.26. However, a Medicaid lien and a Medicare lien are very different creatures, especially following the United States Supreme Court case, Arkansas Department of Health and Human Services v. Ahlborn. This case suggests there may be room for parties to discuss reductions of Medicaid liens. The United States Supreme Court held that Medicaid subrogation would be limited to the funds allocated to medical costs. A copy of the 2006 memo setting forth the Federal Government’s position on Ahlborn’s impact on Medicaid reimbursement / subrogation is available on the Internet at: http://www.nasmd.org/issues/docs/CMS_Advisory_Settlement_Options_July%202006.doc This memo contains the following language about the Ahlborn decision: “A State’s lien laws may only operate to recover from that portion of a settlement that is allocated to healthcare items or services, even if it means that Medicaid must forego full recovery of its claim.” The memo included the following section:
What This Means for Medicaid Third Party Liability Recovery Programs:
Prior to the Supreme Court’s decision in Ahlborn, CMS had interpreted the Medicaid third party liability provisions to authorize States to pass laws permitting full recovery of Medicaid assistance payments from third party liability settlements, regardless of how the parties allocated the settlement. The Supreme Court rejected this interpretation of the Medicaid statute and held that to the extent State laws permit recovery over and above what the parties have appropriately designated as payment for medical liens and services, the State was in violation of federal Medicaid laws.
Any adjuster, individual or attorney dealing with a Medicare or Medicaid lien should familiarize him or herself with the current interpretations of Ahlborn under Texas law.
It needs to be pointed out that a Texas Medicaid recipient may commit a misdemeanor by failing to notify the Texas Department of Human Services of a tort claim or cause of action. This law is found in the Texas Human Resources Code, Section 32.033(b) and the Texas Penal Code, Section 12.23.