The advent of the new Health Insurance Marketplace will no doubt add to the approximately 100,000 million Americans who already get health coverage through Medicare, Medicaid, and the Children's Health Insurance Program (CHIP). These Federal programs are managed differently in each state. Medicare pays hospital bills and provides health coverage to seniors and the disabled. Medicaid and CHIP provide health coverage to those who have little income and few assets.
What is a Medicare or Medicaid lien?
The amount paid by government based health coverage programs following a serious accident can total tens or hundreds of thousands of dollars and include coverage for hospital charges, surgery, diagnostic testing, medication, medical equipment and physical therapy. The coverage offered by these Federal programs often proves invaluable to a person who is injured in an accident and requires costly medical treatment. However, the program holds a lien on any recovery obtained by the injured plaintiff in his or her personal injury accident lawsuit against a negligent third party. The amount of the lien depends on the relevant state law but will never exceed the amount paid in health and other benefits.
The Medicaid lien in Florida
Florida recently changed their law on Medicaid liens. Fla. Stat. §409.910 still gives Medicaid up to 50 percent of the amount recovered by the plaintiff, but makes it harder for the plaintiff to have the lien reduced. The plaintiff now has to seek an administrative hearing where they have the burden to show the statutory 50 percent would be unfair in their situation. The new law took effect July 1, 2013 and was a reaction to the Supreme Court decision a few months earlier in Wos v. E.M.A., which struck down North Carolina’s inflexible statutory scheme, giving Medicaid up to one third of the plaintiff’s recovery. There are many circumstances where giving Medicaid half or even a third of the plaintiff’s recovery to reimburse them for medical expenses would result in an injustice:
Where the nature of a serious injury required relatively little medical care
Where the plaintiff’s recovery is reduced as a result of questionable liability
Where the recovery is small compared to the loss suffered because the defendant has limited insurance coverage and no assets
The existence of a Medicaid or other lien complicates every aspect of a personal injury case from evaluation to settlement negotiations.