This article applies to Medicaid beneficiaries. Thus, it may also apply to someone who recently completes a Medicaid application (and qualifies for Medicaid) after an accident. (Find out why you should quickly apply for Medicaid after a bad injury.)
This article applies to car accidents, motorcycle accidents, slip and falls, wrongful death cases and much more. (However, as I’ll discuss further below, the law may be different for paying back Medicaid from a wrongful death settlement.)
Let’s look at a couple of examples of whether you have to pay back Medicaid. The first example, involving an Uber accident, is my actual case.
Uber Driver Gets $260K Settlement, We Paid Medicaid in Full (Only $4K)
Here is a video about this $260K settlement:
I settled an Uber driver’s injury claim for $260,000. The Uber driver (Ray) had Medicaid.
Ray had Medicaid (through Molina Healthcare). Molina Healthcare plans are a Medicaid HMO.
Molina wouldn’t pay the hospital bill. Even after I asked them several times to pay it.
However, after my many requests, I filed a complaint with the Agency for Health Care Administration (AHCA). I Molina then let me deal with its attorney.
Finally, Molina paid Ray’s huge hospital bill. They paid about $2,900 to the hospital.
The good news?
Since the hospital billed Medicaid, the hospital was required by law to reduce the balance to zero.
However, Molina (Medicaid) demanded that they be paid back for the payments it made to his medical providers. Medicaid demanded that it be paid back from the Uber driver’s $260,000 settlement with the at fault driver’s insurance company.
I’ll quickly discuss the accident. Molina Medicaid paid about $4,000 to his health care providers.
The Uber driver claimed that the accident caused his back injury. Here is the actual crash diagram from the police report:
Ray was an Uber driver who was engaged in an Uber ride. He was driving Vehicle 2 in the above diagram. He had a passenger at the time of the crash.
A company van (vehicle #1 in the diagram) was heading in the opposite direction. The van made a left hand turn.
The front of the van collided with the left driver side of the Uber driver’s car. You can see the damage to the car that Ray was driving (below):
The van wasn’t as badly damaged. Check out the photo below:
Here is a photo of the Uber driver laying in his hospital bed:
CNA (American Casualty Company of Reading, Pennsylvania) insured the at fault van. CNA paid the $260K settlement.
Here is CNA’s settlement check:
In the Above Claim, Medicaid (Equian) Demanded the Total Amount that It Paid
It is important to know whether the Medicaid is “true” Medicaid (gold card) or whether it’s a Medicaid HMO.
Why does this matter?
All things equal, it easier to get a Medicaid HMO (as opposed to true Medicaid) to reduce its lien without going to “court”.
If my client had true Medicaid, Florida Statute 409.910(1) would’ve applied. It says:
If benefits of a liable third party are discovered or become available after medical assistance has been provided by Medicaid, it is the intent of the Legislature that Medicaid be repaid in full and prior to any other person, program, or entity.
But the analysis doesn’t stop here.
I previously said that the Uber driver got a $260,000 settlement. Medicaid paid about $4,000, “Do we need to repay Medicaid?”
Florida Statutes 409.910(11)(f) addresses this. There are a few steps to this formula. It says:
the amount recovered [by Medicaid] shall be distributed as follows:
Step 1 – Reduce by Attorney’s Fees and Costs
After attorney’s fees and taxable costs as defined by the Florida Rules of Civil Procedure, one-half of the remaining recovery shall be paid to the agency up to the total amount of medical assistance provided by Medicaid.
Let’s assume that you don’t believe in the more than 13 benefits of hiring an injury attorney. Thus, you don’t hire a lawyer. In that case, Medicaid will not reduce its lien by attorney’s fees and taxable costs.
As I mentioned above the total recovery (settlement) was $260,000.
$260,000 Total Settlement
x -.5 one-half paid to Medicaid
$130,000 owed to Medicaid up to total amount of medical payments by Medicaid
Thus, if the Uber driver didn’t have a lawyer, he wouldn’t owe Medicaid more than $130,000 up to total amount of medical payments by Medicaid.
Step 2 – Reduce Medicaid Lien By Attorney’s Fees and Costs
Since the Uber driver hired an attorney (me), the formula continues. Again, Florida Statutes 409.910(11)(f) addresses this. It says:
the amount recovered [by Medicaid] shall be distributed as follows:
After attorney’s fees and taxable costs as defined by the Florida Rules of Civil Procedure, one-half of the remaining recovery shall be paid to the agency up to the total amount of medical assistance provided by Medicaid.
Florida Statutes 409.910(11)(f)(3) says that you must use 25% as attorney’s fees for purposes of calculating the Medicaid payback amount. (This is true even though my attorney’s fee was 33 1/3% of the settlement.)
In the Uber driver’s case, costs were very small. Thus, I will use zero in this example.
In a contingency fee case, Florida attorneys should the client give a reasonable estimate about future necessary costs. I do this. In fact, my fee contract says that we keep costs to a minimum consistent with the requirements of the case.
The attorney’s fees used to calculate Medicaid’s recovery would be 25% of the total $260,000 settlement. This comes out to $65,000.
$260,000 Total Settlement
– ($260,000*.25) Attorney’s fees per Medicaid’s formula
*.5 one-half paid to Medicaid
$97,500 owed to Medicaid up to total amount of medical payments by Medicaid
If Medicaid would’ve had a lien of $4,000, it would’ve been less than the repayment amount allowed by law. Thus, we would’ve owed Medicaid back its full lien ($4,000).
However, Ray had Molina Medicaid, which is a HMO. In Florida, a Medicaid HMO must reduce its lien by attorney’s fees and costs. This reduction is a big advantage to hiring an attorney!
Here is a sample letter to a Medicaid HMO explaining why they must reduce by attorney’s fees, costs and other equitable factors.
The “bad” news?
Ray had to pay me my attorney’s fee. I put “bad” in quotes because I am being a little sarcastic.
The reality?
Hiring an injury lawyer has many over 13 benefits.
The good news when dealing with an Medicaid HMO like Molina, Staywell, Wellcare and others?
A Medicaid HMO is required to reduce its lien by attorney’s fees, costs and other equitable factors.
How Was I Able to Help Ray?
We got Medicaid to pay the huge ($99,000) hospital bill. We also got CNA to settle the Uber driver’s personal injury claim for $260,000. These were just a couple of the benefits that the Uber driver got from having a personal injury attorney.
Now, let’s look at a personal injury claim where Medicaid must reduce its lien.
Example – Limited Insurance, Medicaid Has To Reduce Its Lien
Assume that you were hit by a car and the negligent driver had $25,000 in bodily injury coverage. The owner of the at fault driver’s vehicle has $10,000 in bodily injury coverage.
You were riding a motorcycle so PIP coverage is not available and you are not an insured under any uninsured motorist auto policies.
The other driver received a ticket for careless driving. You fractured your wrist and you had a 5 day hospital stay because you had surgery on it.
The hospital bill is $100,000 and the hand surgeon’s bill is $7,000. The anesthesiologist’s bill is $3,000. The ER physicians’ bill, the radiology bill and the ambulance bill are $5,000.
So the total billed charges are $115,000. But since there is only $35,000 in liability coverage, you may be lucky that you have Medicaid. Let’s assume that all the medical providers are willing to bill Medicaid. United Auto insures the car owner and GEICO insures the tortfeasor driver.
United Auto quickly pays $10,000 from the bodily injury coverage on behalf of its insured in an attempt to settle your personal injury claim. Shortly thereafter Geico pays $25,000 to settle your bodily injury claim.
Medicaid pays $20,000 in total to all of your medical providers. The medical providers adjust (reduce) your balance.
Now you don’t owe the medical providers a penny!
In the Above Claim ($33,000), Do you have to pay Medicaid from the injury settlement?
It depends on whether it’s true Medicaid (gold card) or an Medicaid HMO. Florida Statute 409.910(1) says “If benefits of a liable third party are discovered or become available after medical assistance has been provided by Medicaid, it is the intent of the Legislature that Medicaid be repaid in full and prior to any other person, program, or entity.”
So if the settlement is for $35,000 and Medicaid has paid $20,000, “How much do you need to repay Medicaid?”
Florida Statutes 409.910(11)(f) addresses this. There are a few steps to this formula. It says “the amount recovered [by Medicaid] shall be distributed as follows:
Step 1 – Reduce by Attorney’s Fees and Costs
After attorney’s fees and taxable costs as defined by the Florida Rules of Civil Procedure, one-half of the remaining recovery shall be paid to the agency up to the total amount of medical assistance provided by Medicaid.
Thus, if you did not believe in the more than 11 benefits of hiring an injury attorney and you did not hire a lawyer, Medicaid will not reduce its lien by attorney’s fees and taxable costs.
As I mentioned above the total recovery was $35,000 which was the combined limits of the responsible parties’ liability insurance.
$35,000 Total Settlement
x -.5 one-half paid to Medicaid
$17,500 owed to Medicaid
Therefore you net settlement (amount in your pocket) would be $17,500, after you subtract the $17,500 that you owe Medicaid from your $35,000 settlement. So one-half of the remaining recovery shall be paid to Medicaid. In this case, you will need to pay Medicaid $17,500 since this is one-half of the total recovery.
Practice Tip: If Medicaid Lien is Big, You Can File a Petition in Court
Rather than simply agreeing to use Medicaid’s formula, if Medicaid has a significant lien you have another option.
Florida Statutes 409.910(17),(b), gives you the opportunity to file a petition under chapter 120 and prove, by clear and convincing evidence, that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the agency pursuant to the formula set forth in paragraph (11)(f).
You may want to get the circuit court judge to make a determination as to allocation and then file a petition.
Now let’s take the $35,000 injury settlement example where Medicaid has paid $25,000 in medical expenses, but let’s assume that you hired a lawyer in your case. How much do you need to repay Medicaid?
Again, Florida Statutes 409.910(11)(f) addresses this. It says “the amount recovered [by Medicaid] shall be distributed as follows:
After attorney’s fees and taxable costs as defined by the Florida Rules of Civil Procedure, one-half of the remaining recovery shall be paid to the agency up to the total amount of medical assistance provided by Medicaid.
Florida Statutes 409.910(11)(f)(3) says that you must use 25% as attorney’s fees. To keep it simple, we’ll assume that there were no costs. So the attorney’s fees used to calculate Medicaid’s recovery would be 25% of the total $35,000 settlement which comes out to $8,750.
$35,000 Total Settlement
– ($35,000*.25) Attorney’s fees per Medicaid’s formula
*.5 one-half paid to Medicaid
$13,125 is owed to Medicaid
Step 2 – Remaining Recovery Is Paid To The Claimant
The remaining amount of the recovery shall be paid to the recipient.
So to calculate your net settlement (amount in your pocket) you use the following numbers and formula:
$35,000 Total Settlement
– ($35,000*.33) Attorney’s fees per most Florida attorneys fee contracts if case settles pre-suit
– $13,125 is owed to Medicaid
$10,325 is your net settlement (in your pocket)
So, if you hired an attorney in the same example, you would get about $2,900 less in your pocket but the attorney would do all of the work. In this scenario you benefit from having a personal injury attorney.
Does Medicaid have lien rights on all medical bills paid before a decedent’s death if the PR gets a settlement?
Before I answer this question, the “PR” is the abbreviation for “personal representative”. The personal representative brings the wrongful death claim on behalf of the estate and survivors in Florida. Survivors may include minor children, a spouse, and sometimes adult children or parents of an adult child.
The answer to the above question is found in Florida Statute 409.9101, which is known as Florida’s Medicaid Estate Recovery Act. The Estate Recovery Act applies to all Medicaid benefits paid on behalf of the decedent after age 55. This means that Medicaid can recover benefits that were paid before the accident occurred. (This law doesn’t apply if someone was injured but didn’t die.)
Does Florida’s Medicaid Estate Recovery Act Apply to All Survivors?
No. The Florida Medicaid Estate Recovery right does not apply if there is a surviving spouse.
Thus, if there is a surviving spouse, then only accident-related medical expenses are recoverable under 409.910.
Do you have to pay a Florida Medicaid HMO from a personal injury settlement?
Yes, however Florida Statute 409.910 does not apply. Medicaid HMOs are contractual.
They are subject to Florida collateral source law, which is favorable to injured people. At a minimum, it allows a reduction for attorney’s fees and costs.
Sometimes people with Medicaid have Medicare as well. There are also many reasons to hire an injury lawyer if you are a Medicare beneficiary and were seriously injured.
Are you a Medicaid Beneficiary Who Was Injured in an Accident in Florida? Did Your Family Member Receive Medicaid and Was Killed in An Accident or Incident in Florida?
If so, I would like to represent you as your lawyer.
Our Miami law firm represents people injured anywhere in Florida in car accidents, truck accidents, slip, trip and falls, motorcycle accidents, bike accidents, drunk driving crashes, pedestrian accidents, Uber and Lyft accidents, cruise ship or boat accidents and many other types of accidents.
We want to represent you if you were injured in an accident in Florida, on a cruise ship or boat. If you live in Florida but were injured in another state we may also be able to represent you.
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