Disclaimer: This article is for informational purposes and does not constitute legal advice.
Detailed Answer
1. Overview of MassHealth’s Subrogation Rights
When MassHealth (Massachusetts’ Medicaid program) pays for medical treatments related to a personal injury, it can seek reimbursement from any third-party settlement. This right arises under federal law (42 U.S.C. § 1396k) and Massachusetts statutes.
2. Statutory Basis
MassHealth’s statutory lien comes from Mass. Gen. Laws ch. 118E, § 25. That section authorizes the state to recover payments from any “third-party” source, including insurance settlements. You can review the text here: M.G.L. c. 118E, § 25.
3. Notice and Timeline Requirements
– Within 30 days of filing a personal injury complaint, you must send MassHealth a copy of the complaint and proof of service to its third-party liability unit.
– If you settle before suit, you must still notify MassHealth in writing at least 30 days prior to finalizing the settlement.
– Include itemized medical billing statements showing what MassHealth paid.
4. Calculating the Lien Amount
MassHealth will claim the full amount it paid for covered services, including hospital stays, doctor visits, and therapy. Under federal rules, it may also seek interest if the repayment is delayed. Massachusetts law generally limits interest on judgments, but you should confirm rates with MassHealth’s third-party unit.
5. Negotiating or Challenging the Lien
– You can petition the Probate & Family Court for a lien reduction if MassHealth’s claim is disproportionate to the total recovery.
– Argue for equitable reduction based on client hardship or case value.
– Provide evidence of reasonable attorney fees and costs to show net recovery limits.
6. Distributing Settlement Funds
When you disburse settlement proceeds, follow this priority:
1. Attorney fees and litigation costs.
2. MassHealth lien (as determined or negotiated).
3. Other statutory liens (e.g., Medicare, child support).
4. Remaining balance to client.
Helpful Hints
- Gather all MassHealth Explanation of Benefits (EOBs) early.
- Send notices via certified mail and track receipt.
- Keep a separate escrow account for liens to avoid commingling.
- Document any waiver or reduction agreements in writing.
- Work with an attorney experienced in Massachusetts Medicaid liens.