Detailed Answer
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
In Virginia, the Department of Medical Assistance Services (DMAS) has a statutory right to recover Medicaid benefits paid on behalf of a beneficiary out of third-party recoveries, including personal injury settlements. Under Va. Code § 32.1-324, DMAS may file a lien against any claim, judgment or settlement that the Medicaid recipient obtains from another party (Va. Code § 32.1-324).
Here’s how to navigate these liens step by step:
- Identify Medicaid payments: Determine which medical expenses the Medicaid program paid. DMAS will seek reimbursement only for services covered and paid during the injury-related treatment.
- Check for lien notice: DMAS must file or send a notice of its lien within 90 days after the beneficiary’s last Medicaid payment (Va. Code § 32.1-326). If no timely notice exists, you may challenge lien validity.
- Obtain the lien amount: Request a written statement from DMAS detailing the outstanding lien balance. This figure will include principal payments made plus interest.
- Allocate settlement funds: When negotiating your settlement, clearly separate medical expense allocation from other damages (e.g., pain and suffering). A precise breakdown helps determine the lienable portion.
- Settle with DMAS: Include DMAS in your settlement negotiations or obtain a court order approving the settlement and directing payment to DMAS. Courts often require proof that Medicaid’s lien is satisfied or adequately reserved before approving a settlement involving a minor or incapacitated person.
- Secure court approval (if required): In cases involving minors or individuals under guardianship, Virginia law (Va. Code § 8.01-47.9) may require court-supervised settlement to protect the client’s interests and ensure liens are paid properly.
- Document final payment: After settlement, forward proof of DMAS payment and obtain a release of lien. Keep all records to avoid future claims by DMAS.
Helpful Hints
- Notify DMAS early: Begin lien discussions well before settlement talks to avoid last-minute delays.
- Get lien figures in writing: A formal demand letter from DMAS prevents surprises at closing.
- Use clear allocation: Draft the settlement agreement to specify medical expense recovery separately.
- Consider a Special Needs Trust: For beneficiaries with ongoing care needs, a properly drafted trust may protect future Medicaid eligibility.
- Work with experienced counsel: An attorney familiar with Virginia Medicaid recovery can streamline the process and minimize costs.
- Challenge improper liens: If DMAS misses statutory deadlines or overstates amounts, you can petition the court to reduce or invalidate the lien.