How do Medicaid or Medicare reimbursements impact a personal injury settlement offer in Texas?

The information on this site is for general informational purposes only, may be outdated, and is not legal advice; do not rely on it without consulting your own attorney. See full disclaimer.

Disclaimer: This article provides general information only and does not constitute legal advice.

Detailed Answer

When you suffer an injury and Medicaid or Medicare covers your medical bills in Texas, those programs have the right to recover funds from any personal injury settlement. Below is how each program affects your offer.

1. Texas Medicaid Recovery

Under Texas law, the state can file a lien against your third-party claim to recoup medical assistance payments. See Texas Human Resources Code § 32.039. Key points:

  • Notice requirement: The Texas Health and Human Services Commission (HHSC) must serve you and your attorney with written notice of a lien within 120 days after it pays benefits.
  • Scope of recovery: HHSC may seek reimbursement for all medical expenses it paid related to your injury.
  • Settlement negotiations: You or your attorney should identify the Medicaid lien early. Include language in your demand that reserves funds to satisfy the lien.

2. Medicare Secondary Payer (MSP) Rules

Medicare acts as the payer of last resort. Federal law requires reimbursement for conditional payments when a third party is responsible. See 42 U.S.C. § 1395y(b). Key steps:

  • Identify conditional payments: These include hospital care, doctor visits, rehabilitation, and supplies Medicare paid.
  • Request a final demand: Obtain a Medicare Secondary Payer Recovery Contractor (MSPRC) demand letter stating the exact reimbursement amount.
  • Withhold funds: In your settlement agreement, set aside sufficient funds to cover the MSPRC demand.
  • Negotiate if possible: In limited circumstances, you may negotiate a reduction of the Medicare lien via the MSRPC.

Helpful Hints

  • Consult early: Involve an attorney familiar with Medicare and Medicaid liens before settlement talks begin.
  • Get written demands: Obtain final conditional payment letters to calculate accurate holdbacks.
  • Itemize medical expenses: Maintain detailed records to challenge any improper or unrelated charges.
  • Communicate with agencies: Timely notify HHSC and the MSPRC of your claim and settlement status.
  • Consider compromise: Texas HHSC may offer a settlement discount in certain hardship cases.

The information on this site is for general informational purposes only, may be outdated, and is not legal advice; do not rely on it without consulting your own attorney. See full disclaimer.