Disclaimer: This article provides general information under Wisconsin law and is not legal advice.
Detailed Answer
1. Overview of Medicaid and Medicare as Secondary Payers
If you receive Medicaid or Medicare benefits and later settle a personal injury claim, these programs can seek reimbursement for medical expenses they paid. Under federal and Wisconsin law, they act as secondary payers when you recover funds from a third party.
2. Medicaid Reimbursement Claims in Wisconsin
Wisconsin Medicaid defines “personal injury claim” and reserves a lien on any settlement or judgment. See Wis. Stat. §49.45(58) (definitions). After you settle, the Department of Health Services issues a demand letter stating the amount owed. It can file a lien against your recovery to recoup all medical costs paid on your behalf.
3. Medicare’s Right to Reimbursement
At the federal level, the Medicare Secondary Payer Act (42 U.S.C. §1395y(b)) provides that Medicare pays only after other insurers. When you settle a claim, Medicare requires you to identify its payments and reimburse the program from your settlement. Regulations (42 C.F.R. §411.24) detail the claims process.
4. Impact on Settlement Offers
- Reduces net recovery: You must allocate part of the settlement to repay Medicaid/Medicare, lowering your take-home amount.
- Negotiation leverage: Defendants know liens exist and may adjust their offer accordingly.
- Structured settlements: You can request a structured settlement to manage future medical needs without triggering large immediate lien demands.
5. Practical Steps Before Accepting an Offer
- Obtain a benefits summary showing all Medicaid/Medicare payments related to your injury.
- Send a Medicare Conditional Payment Letter to request an itemized list of payments.
- Contact Wisconsin’s Medicaid estate recovery or the Medicare Coordination of Benefits Contractor (COBC) to verify liens.
- Negotiate with the lienholders or seek a reduction in the claimed amount where permissible.
Helpful Hints
- Document all medical bills and dates of service to challenge incorrect lien amounts.
- Budget for lawyer fees—attorneys often negotiate liens as part of their contingency work.
- Consider a Qualified Settlement Fund to handle lien resolution before you receive funds.
- Act early: Medicare has strict deadlines to request lien amounts, while Medicaid timelines can vary by county.
- Retain your own counsel if you face large or complex lien demands to protect your net recovery.