Detailed Answer
If you or your client received Medical Assistance (MA) benefits in Minnesota for injuries caused by someone else, the state has a right to reimbursement from any personal injury settlement or judgment. Understanding the process helps you comply with state law and maximize the remainder of your recovery.
1. What Triggers a Medicaid Lien?
Under Minnesota law, MA is considered a third-party payer. When a beneficiary recovers damages from a third party, the state may recover the amount it paid for covered services. This right arises from Minn. Stat. § 256B.04, subd. 5 and is enforced through the recovery provisions in Minn. Stat. § 256B.19.
2. How to Identify and Quantify the Lien
Request a written lien statement from the Minnesota Department of Human Services (DHS) as soon as liability is established. Provide the beneficiary’s name, date of injury, claim number, and expected settlement date. DHS will calculate the total MA payments related to the injury and issue a lien letter with a deadline for response.
3. Timing and Settlement Requirements
Federal regulation 42 C.F.R. § 433.148 prohibits disbursing settlement proceeds until MA’s claim is satisfied or resolved. Failing to address the lien can delay closing or expose you to double liability if DHS later demands payment.
4. Negotiating or Compromising the Lien
You can petition DHS to compromise or waive the lien under hardship or public interest grounds. Submit a written request with documentation of the claimant’s financial circumstances and expected net recovery. DHS evaluates whether full repayment would cause undue hardship or impair essential needs.
5. Finalizing the Release
After DHS confirms the lien amount or compromise, incorporate the repayment in your settlement agreement. Allocate funds specifically to MA and obtain a release of lien from DHS. Keep a closing statement showing payment to the state and distribution of remaining proceeds.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.
Helpful Hints
- Request the DHS lien letter early to prevent settlement delays.
- Allocate medical expense damages separately in settlement documents.
- Gather financial records to support any compromise or hardship request.
- Confirm DHS deadlines and respond in writing within the timeline.
- Keep clear accounting of all payments to DHS to avoid future claims.
- Work with an attorney familiar with Minnesota’s MA recovery process.