Detailed Answer
Disclaimer: This article is for informational purposes and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
1. Understanding Medicaid’s Right to Recovery in Pennsylvania
Under the Pennsylvania Public Welfare Code, the Department of Human Services (DHS) can seek reimbursement for medical assistance paid on your behalf when you recover money from a third party after a personal injury. This right of recovery, often called a “Medicaid lien,” is set forth at 62 P.S. § 1406. You can review the statute here: 62 P.S. § 1406.
2. How and When Medicaid Asserts a Lien
- Pre‐Settlement Notice: DHS must notify you and your attorney in writing of its claim within 120 days after you receive benefits or when DHS learns of the third‐party claim.
- Filing a Lien: If DHS does not receive payment or a compromise offer, it may file a civil action or lien on your personal injury recovery within 12 months of paying benefits.
3. Calculating the Amount Owed
DHS seeks the total amount of medical assistance paid. Under federal law (42 U.S.C. § 1396k(b)(2)(D)), you may reduce the Medicaid recovery by a proportionate share of your attorney’s fees and litigation costs. For example, if your lawyer’s contingent fee is 30% of the settlement, you can reduce DHS’s claim by 30% of the total medical assistance paid.
4. Negotiating or Challenging the Lien
- Request an Itemization: Ask DHS for a detailed statement of benefits paid.
- Offer a Compromise: Submit a written settlement offer, typically expressed as a percentage of the full claim. DHS often negotiates, especially in modest cases.
- File a Petition in Orphans’ Court: In many Pennsylvania counties, you can file a petition to apportion the settlement—allocating funds between medical expenses, pain and suffering, and lost wages. If the court finds the allocation reasonable, DHS must accept its share based only on the medical portion.
- Argue Equitable Factors: Courts may reduce the lien for hardship, delay by DHS, or if the remaining funds do not leave the claimant with fair compensation.
5. Best Practices Before Settling
- Notify DHS of your intent to settle as early as possible.
- Keep thorough records of every medical payment made by Medicaid.
- Work with an attorney experienced in Pennsylvania Medicaid recovery.
- Allocate settlement amounts clearly in the release and court filings.
Helpful Hints
- Document all Medicaid payments and dates of service in a spreadsheet.
- Serve DHS with the formal notice of settlement according to 62 P.S. § 1406 requirements.
- Negotiate early—DHS often accepts less than the full amount if approached promptly.
- Understand that only the medical portion of your recovery is subject to the lien.
- Consider filing in Orphans’ Court to streamline approval of the final distribution.
- Ask your attorney to calculate the proportional reduction for legal fees under federal law.
- Keep copies of all correspondence with DHS and court filings in one organized file.