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Will the State Seize My Award? Personal Injury Settlements and Medicaid Reimbursement

Some people covered by Medicare or Medicaid have lost unexpectedly large portions of personal injury settlements to state claims for “reimbursement”. Others ― including those working with a personal injury lawyer in Jacksonville ― find themselves unable to arrive at a reasonable settlement because they cannot predict the liens that the state might place on their awards.

The U.S. Supreme Court recently declared that states cannot claim more than what they actually paid in medical expenses when recovering Medicaid expenditures incurred by personal injury victims. In Wos v. E.M.A., the Court addressed a North Carolina case where a family received a personal injury/medical malpractice award of $2.8 million due to their daughter’s severe, multiple birth injuries which prevented her from living or working independently. In that case, North Carolina had claimed one-third of the award under a state statute which presumed that one-third of a Medicaid beneficiary’s settlement was attributable to medical expenses which the state was entitled to “recover.” The U.S. Supreme Court ruled on behalf of the family, holding that states may not rely on state legislation which conflicts with the federal Medicaid Act’s “anti-lien provision.” The anti-lien provision prohibits states from claiming any amount of a tort recovery that is not specifically designated as payment for medical care.

States can still place liens on personal injury recovery to guarantee reimbursement. However, the Wos v. E.M.A. decision made it clear that state liens are limited to the portion of the award that is designated for medical expenses by agreement of the parties or by the court. The balance of the award is reserved for other supplemental needs of the injured party.

If you anticipate recovering personal injury damages, contact a Jacksonville personal injury lawyer to determine the best way to structure your award to cover medical expenses and special needs for the injured party.  The prestigious and highly rated law firm of Fallgatter Catlin & Varon, P.A. is staffed by knowledgeable and experienced personal injury lawyers who collectively have over eight decades of legal experience. Contact us today for a free initial consultation to address your legal concerns.

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