Disclaimer: This article is for informational purposes only and does not constitute legal advice. For personalized guidance, consult a qualified attorney.
Detailed Answer
When you resolve a personal injury claim after receiving Medicaid or Medicare benefits in South Dakota, both federal and state laws require you to repay these programs from your settlement. This prevents double recovery and protects taxpayer funds.
Medicaid Reimbursement (SDCL 28-6-3)
Under South Dakota law, the Department of Social Services has a lien on any settlement or judgment for medical assistance paid on your behalf. See SDCL 28-6-3. You must:
- Notify the department of your claim.
- Request a written payoff statement.
- Reserve sufficient funds in escrow to satisfy the lien before disbursing settlement proceeds.
Medicare Reimbursement (42 U.S.C. §1395y)
Medicare enforces the Medicare Secondary Payer Act (42 U.S.C. §1395y(b)), making Medicare a secondary payer when another party is legally responsible for your injury. You must:
- Inform the Centers for Medicare & Medicaid Services (CMS) of your claim.
- Obtain a conditional payment letter detailing amounts Medicare paid.
- Repay Medicare from your settlement before final distribution of funds. See 42 U.S.C. §1395y.
Sample Settlement Breakdown
For example, if your $60,000 settlement covers $15,000 in medical bills paid by Medicaid and $10,000 paid by Medicare, you must allocate at least $25,000 to repay those programs. Your net recovery equals the remaining balance after liens and legal fees.
Helpful Hints
- Notify Medicaid and Medicare early in your case to avoid surprises at settlement.
- Obtain formal payoff letters from both agencies before negotiations end.
- Include escrow or protected-net-proceeds language in your settlement agreement.
- Consider a Medicare Set-Aside (MSA) to earmark funds for future medical care.
- Work with an attorney experienced in government healthcare liens to safeguard your recovery.