Disclaimer: This content is for informational purposes only and does not constitute legal advice. Always consult a qualified attorney for guidance on your specific situation.
Understanding Wisconsin Medicaid Liens in Personal Injury Settlements
When Medicaid (Medical Assistance) pays for medical care following an injury, Wisconsin law gives the Department of Health Services (DHS) a right to recover those costs from any settlement or judgment you receive from a third party. These rights are often called “liens” or “subrogation claims.” Wis. Stat. § 49.19 and § 49.487 outline how the state asserts and enforces these liens.
Key Statutes
- Assignment of rights to DHS: Wis. Stat. § 49.19 (docs.legis.wisconsin.gov/statutes/statutes/49/19)
- Recovery from third parties: Wis. Stat. § 49.487 (docs.legis.wisconsin.gov/statutes/statutes/49/487)
How Wisconsin Medicaid Liens Work
- Automatic Assignment: By accepting Medicaid benefits, you agree to assign any rights you have against third parties to DHS for the value of benefits paid. (Wis. Stat. § 49.19)
- Notice and Claim: If you settle or obtain a judgment, you must notify DHS. The department then files a claim for the exact amount it spent on your care.
- Priority of Payments: The lien covers medical assistance paid before and after a settlement up to the date of DHS’s reimbursement demand. It takes priority over your attorney’s fees, costs, and certain other expenses. (Wis. Stat. § 49.487(3)(h))
- Enforcement: If you or your attorney don’t resolve the lien, DHS can file suit to enforce it. Courts typically order that lien amounts come out of settlement proceeds before distribution to claimants.
Steps to Navigate the Lien Process
1. Early Identification
Inform your personal injury attorney if you receive Medicaid benefits. Your lawyer should track all medical charges paid by DHS.
2. Obtain a Lien Statement
Request a written “Statement of Claim” from DHS listing the exact dollar amount it paid. Verify each item to ensure accuracy.
3. Negotiate if Possible
Under certain hardship or public policy considerations, DHS may agree to reduce its claim. Submit evidence of financial hardship or disproportionate impact to support a compromise.
4. Escrow Funds Until Resolution
Your attorney should hold enough settlement funds in escrow to cover the lien, attorney’s fees, and costs until DHS confirms its final claim.
5. Final Accounting and Distribution
Once DHS signs a release or court enters an order, distribute the remaining funds to your attorneys, medical providers, and you.
Helpful Hints
- Start lien negotiations early to avoid settlement delays.
- Compare the DHS statement to your medical bills to spot overcharges.
- Document all communications with DHS in writing.
- Factor in DHS’s processing time—resolving liens can take several weeks.
- Consult an attorney experienced in Wisconsin Medicaid recovery to protect your net recovery.