RHD Legal Raleigh: Medicaid Lien Attorneys in North Carolina – Understanding the Complexities of Medicaid Liens in Personal Injury Cases

When you are involved in a personal injury accident, such as a car crash, slip-and-fall, or workplace accident, the physical and emotional aftermath can be overwhelming. Navigating your recovery from injuries is challenging enough, but dealing with a Medicaid lien on your personal injury settlement can make the process even more complex. At RHD Legal, we are here to help you understand the intricacies of Medicaid liens, ensuring that you receive the compensation you deserve while fulfilling your obligations.

Medicaid, a state and federally funded program, provides healthcare coverage for low-income individuals. When Medicaid pays for medical treatment related to your injury, it may place a lien on your personal injury settlement or judgment. If you are facing a Medicaid lien or need assistance with a personal injury case involving Medicaid, contact RHD Legal today at (919) 246-4001 or fill out our online contact form for a free consultation.

What Is a Medicaid Lien and How Does It Work?

A Medicaid lien is the legal claim the state can place on your personal injury recovery to seek reimbursement for medical expenses Medicaid paid on your behalf after an accident. Medicaid, while a crucial program for individuals in need of healthcare, is entitled to be repaid from any personal injury settlements, awards, or insurance payouts you receive.

This process is governed by North Carolina General Statutes §108A-57, which provides the legal framework for Medicaid lien recovery in personal injury cases. Medicaid’s right to reimbursement arises when the state pays for medical treatments that are related to the injury caused by the accident. The lien is placed to recoup the funds spent by Medicaid for treating those injuries.

Types of Liens and Claims Medicaid Can Place on Your Settlement

Medicaid may place a lien on your settlement or judgment based on the following:

1. Medical Bills Paid by Medicaid: If Medicaid covers medical treatment related to your accident, they can assert a lien for the cost of those services. This includes hospital bills, doctor visits, surgeries, rehabilitation, and any other treatments provided.
2. MedPay or Health Insurance: If you use your own health insurance or MedPay coverage to cover medical expenses related to the accident, Medicaid may still seek reimbursement from your settlement, even though those services were paid by another insurer. MedPay is often a source of confusion, as many people believe it’s a “no-fault” insurance, but Medicaid can still claim a lien against it.
3. Long-Term Care: If Medicaid paid for long-term care, such as nursing home care or at-home health assistance following your accident, they may assert a lien on your personal injury settlement.

How Medicaid Liens Affect Your Personal Injury Settlement

In North Carolina, Medicaid’s lien is calculated as a percentage of the total settlement or award you receive. However, Medicaid is not entitled to all of the funds; they are capped at 1/3 of the total settlement amount. This means that even if Medicaid paid more for your medical treatment, the most they can recover is 1/3 of the settlement. This rule is crucial in personal injury cases where Medicaid is involved, as it may limit how much of the settlement can be allocated to paying the lien.

To understand this better, let’s look at a detailed example:

Example: Imagine that you are involved in a car accident, and Medicaid paid $15,000 for your medical treatment. You negotiate a personal injury settlement of $45,000. Medicaid has a lien of $15,000, but the state law limits Medicaid to 1/3 of the total settlement. Therefore, Medicaid can only recover up to $15,000 from the settlement (which is exactly the amount they paid).

However, if your settlement were only $30,000, Medicaid would only be entitled to 1/3 of that amount, which would be $10,000. This means that you could retain the remaining $20,000 after your attorney’s fees and Medicaid lien are deducted.

How Medicaid Liens Are Paid Out

The payment of Medicaid liens comes after your attorney’s fees and any costs associated with the case are deducted. Typically, personal injury lawyers will take a contingency fee (often 33% or 40%), and other costs, such as court filing fees or expert witness fees, will be deducted from the total settlement. Once these deductions are made, the remaining funds are allocated to cover the Medicaid lien.

Let’s walk through another example:

Example: Suppose you settle your personal injury case for $50,000. After your attorney’s fee of $16,500 (33%) and $2,000 in case-related costs are deducted, you are left with $31,500. If Medicaid’s lien is $10,000 (which is less than 1/3 of the settlement amount), they will receive the $10,000, and the remaining $21,500 will go to you.

How Medicaid Liens Are Affected by Other Liens in North Carolina

In many personal injury cases, Medicaid’s lien isn’t the only lien on your settlement. Other medical providers or health insurance providers may have a claim to your settlement. In North Carolina, when multiple medical provider liens exist, Medicaid will share the available settlement funds pro-rata.

This means that Medicaid and other medical providers who have liens will split the settlement funds based on the proportion of their liens. If Medicaid’s lien is $15,000 and another healthcare provider has a lien of $5,000, and you receive a settlement of $30,000, both Medicaid and the healthcare provider will receive their share of the total settlement based on the size of their liens.

Example of Pro-Rata Distribution:

1. Total settlement: $30,000
2. Attorney fees (33.33%) $10,000.00
3. Medicaid lien: $15,000
4. Other medical provider lien: $5,000
5. Total liens: $20,000
6. Total Amount Available For Liens: $10,000.00 (Remember: Medicaids lien is capped at 1/3 of a settlement)

To calculate the pro-rata share, you divide each lien by the total liens:

• Medicaid’s pro-rata share: ($15,000 ÷ $20,000) = 75%
• Other medical provider’s pro-rata share: ($5,000 ÷ $20,000) = 25%

Now, Medicaid and the other medical provider share the $10,000.00 available to pay liens per the cap:

• Medicaid receives 75% of the $10,000.00, or $7500.00.
• The other medical provider receives 25% of the $10,000.00 or $2,500.00.

This distribution ensures that each lien holder receives a fair portion of the settlement funds according to the proportion of their claim.

How to Reduce a Medicaid Lien

Dealing with Medicaid liens doesn’t always mean paying the full amount. In many cases, it is possible to negotiate the lien to reduce the total amount you owe. There are several strategies that can be used to reduce the amount Medicaid recovers:

1. Disputing Treatment Costs: If any of the treatments Medicaid paid for are unrelated to your accident or injuries, you may be able to dispute the costs. For example, if Medicaid paid for treatment unrelated to the injury or for conditions that existed prior to the accident, these charges may be excluded from the lien.
2. Negotiating a Reduction: Medicaid has the discretion to reduce the lien in certain cases. You can request a lien reduction if you can show that the settlement was insufficient to fully pay the lien. This is particularly common when the settlement amount is smaller than expected, and it might be possible to reduce the Medicaid lien to a more manageable level.
3. Legal Petition: If negotiations with Medicaid fail, you may file a petition with the court to reduce the lien amount. This is often done when the settlement is not enough to cover the Medicaid lien in full. The court will examine factors like the amount of the settlement, the severity of the injuries, and the fairness of the reimbursement.
4. Medicaid Lien Forgiveness: In some rare cases, Medicaid may forgive part or all of the lien if you are facing financial hardship or if there are compelling circumstances. These cases often require legal intervention and significant documentation.

How Medicaid Liens Are Affected by the Type of Settlement

The type of settlement or award you receive can also impact how Medicaid liens are handled. There are generally two types of settlements: compensatory and punitive.

• Compensatory Settlements: These settlements are awarded to compensate the injured party for medical expenses, lost wages, pain and suffering, and other damages. Medicaid liens typically apply to compensatory damages.
• Punitive Damages: These are awarded as a punishment to the defendant for particularly reckless behavior. In some instances, Medicaid may not be able to place a lien on punitive damages.

The Role of an Experienced Medicaid Lien Attorney

Navigating a Medicaid lien can be complex, and understanding how Medicaid’s rights intersect with your personal injury case is crucial to ensuring that your rights are protected. Working with an experienced attorney at RHD Legal in Raleigh North Carolina can help ensure that your Medicaid lien is handled appropriately.

We solely focus on personal injury cases and have significant experience dealing with Medicaid liens in North Carolina. Our team will ensure that your lien is calculated correctly, that it is negotiated appropriately, and that you receive the maximum possible settlement after all liens and attorney fees are accounted for.

If you are dealing with a Medicaid lien or any other legal issue related to a personal injury case, reach out to our team at RHD Legal via our contact form or telephone (919) 246-4001.