Page 7 - The Suffolk Lawyer - March 2021 - Vol. 36, No. 2
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                    A Plaintiff’s Primer for Medicare and Medicaid Liens

                                                                       By Michael J. Famiglietti

            (Continued from front cover)                       Once you file suit on behalf of a Medicaid issues. Arkansas Department of Health and
            42 U.S.C. § 1395y(b)(8)(A-B) puts an affir-      beneficiary, CPLR §306-c requires that notice Human Services v Ahlborn, 547 US 268
            mative reporting obligation on the insurance     of the commencement of an action, be (2006). In Ahlborn, the state’s recovery was
            carrier, Medicare can and will seek recovery     served upon either the local public welfare     limited        to the percentage of its Medi-
            of those payments directly against the           social services district or the New York State  c a i d            lien equal to the percent-
            Medicare beneficiary or even the benefici-       Department of Health.                                                  age of Plaintiff’s recov-
            ary’s attorney. 42 CFR §411.24(g).                 This notice can be a letter but must in-                                 ery compared with
               Because the beneficiary and their counsel     clude the Plaintiff’s name, address and so-                                    the full
            are liable to Medicare for repayment, it is      cial security number, the date of
            best to promptly notify Medicare of the          incident, and copy of the Summons
            claim. This can be done by sending notifica-     and Complaint. An affidavit of
            tion to Medicare advising of the client’s        Service of this notice
            name, address, date of incident, social secu-    must be filed with the
            rity number and a list of injuries along with    County Clerk’s office.
            a copy of the retainer agreement and a             Service of this no-
            Medicare-compliant authorization.                tice gives the Depart-
               From there the attorney can track             ment      of     Social
            Medicare’s “conditional payments” thier On-      Services an opportu-
            line Portal          nity to serve a lien
            You can review the conditional payments          against Plaintiff’s re-
            and dispute erroneous payments directly          covery on the com-
            through the portal.                              menced action. Social                                               value
               At settlement, you must request a             Services Law §104-b. This lien                               of her case. As
            Medicare final demand letter. Medicare will      is not valid unless the lien is filed                 such, if the Plaintiff’s in-
            review its ledger and issue a final amount       the County Clerk’s Office. Medicaid             juries are worth considerably more
            due. To request a final demand letter, you       beneficiaries and their attorneys are liable to  than the settlement value, an equitable
            will need to provide the amount of the set-      Department of Social Services for failure to    reduction to the lien is in order. Plaintiff’s at-
            tlement, the attorney’s fee and the attorney’s   repay a validly served and filed Medicaid lien. torneys should outline their position Medi-
            cost.                                            Social Services Law §104-b(5)(c). Once a caid requesting an Ahlborn reduction
               Medicare is obligated to reduce the lien.     lien is served, the attorney should request a including reported verdicts and settlements
            Medicare’s statutory lien reduction formula is   ledger of charges and promptly dispute any showing the full case value. If Medicaid is
            articulated in 42 CFR §411.37. An easy way       charges not related to your client’s case.      unwilling to reduce, Plaintiff’s counsel can re-
            to think of this is to add the costs and attor-  Certain qualified individuals can obtain a quest an Ahlborn allocation hearing by filing
            ney fee together, and then divide by the total   State subsidized, private insurance policy an Order to Show Cause. Lugo v. Beth Isreal
            settlement – this will give you the percent-     through the Health Exchange.                    Medical Center, 13 Misc, 3d 681.
            age of the reduction of Medicare’s lien. In        These monthly subsidy payments are               Finally, you must inform your client that
            cases were a reduction beyond the statutory      known as capitation payments. Medicaid will their settlement may make them ineligible
            reduction is needed, counsel should request      seek reimbursement of these capitation pay-     for need-based benefits from the Depart-
            an equitable reduction, prior to requesting a    ments for those months in which your client ment of Social Services including Medicaid.
            final demand letter.                             used the subsidized health insurance for in- All clients should sign a document indicating
               An individual qualifies for Medicaid based    juries claimed in your case. Consider these their understanding that their settlement
            on their limited income and/or assets. Most      capitation payments as a pay-one-price, may make them ineligible to continue receiv-
            Medicaid beneficiaries apply for Medicaid        monthly unlimited use Medicaid lien. Medi- ing these benefits. There are options a client
            through the New York State Department of         caid will not seek an itemized repayment of can pursue to protect their eligibility, includ-
            Health (Health Exchange). You should in-         every payment made to the beneficiary’s         ing establishment of a supplemental needs
            quire with your client whether they receive      medical providers.                              trust.
            Medicaid benefits, or ask if their health in-      You must give notice of the settlement to                       Michael J. Famiglietti
            surance, procured through the exchange is        the Department of Social Services. Social                         Partner, Rosenberg & Gluck, LLP
            paid in part by the State. Your client may or    Services Law §104-b(5)(a). The Department
            may not know the answer to this question,        will then issue final lien amount. §104-b(5)(                         Michael J. Famiglietti is a
            so best practice would be to send a notifica-    b). Medicaid does not reduce its lien for at-                          partner with Rosenberg &
            tion of your personal injury case to HMS,        torneys’ fees and costs.                                               Gluck, LLP. He specializes in
                                                                                                                                    Plaintiff’s personal injury lit-
            who is contracted with New York State to           Medicaid must reduce its lien if the Plain-                          igation.
            handle third-party liability and recovery.       tiff was not fully compensated for their injury
            HMS’ general number is 1-877-331-1460.           due to a limited insurance policy or liability

            MARCH 2021 EDITION   • The Official Publication of the Suffolk County Bar Association • THE SUFFOLK LAWYER  7
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