Medicare and Medicaid Liens on a Maryland Injury Settlement

By the FigureMyTax Editorial Team · How we calculate

The Maryland Medicaid program is subrogated to your cause of action. Your lawyer must notify it before filing, negotiating or resolving the case, and settlement money must be held for it after deducting attorney's fees and litigation costs. Medicare recovers under federal rules.

Subrogation

Health-General 15-120(a) says that if a Program recipient has a cause of action against a person, the Department is subrogated to it to the extent of payments it made on account of the same occurrence.

Notice

An attorney representing a recipient must notify the Department before filing a claim, commencing an action or negotiating a settlement, and must notify it in advance of resolving the case and allow 3 business days from receipt to establish its subrogated interest (subsection (b)).

After fees and costs

After written notice of the claim, a recipient, attorney, guardian or personal representative who receives settlement money must hold it for the Department to the extent required, after deducting applicable attorney's fees and litigation costs. Anyone who disposes of the money without the Department's written approval is liable for the amount it cannot then recover. The Department does not contribute to your fees or costs, and deducting them is not treated as a contribution (subsection (c)).

Hardship compromise

The Department may compromise or release its claim if collection will cause substantial hardship to the recipient or, in a wrongful death action, to the surviving dependents.

Federal limit and Medicare

In Arkansas Department of Health and Human Services v. Ahlborn (2006), the U.S. Supreme Court held that Medicaid may reach only the portion of a settlement that represents medical costs. Under the Medicare Secondary Payer statute, 42 U.S.C. 1395y(b)(2), the United States may recover conditional payments and collect double damages from responsible entities; 42 CFR 411.24 governs recovery, and 42 CFR 411.37(c) reduces Medicare's recovery by its procurement-cost share. On a $100,000 settlement with $36,333 of fees and costs, $15,000 of Medicare payments would shrink to about $9,550.

Next steps

See how hospital liens work and how Maryland reduces health plan claims, then enter every claim in the Maryland medical lien calculator.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how Maryland's rules apply to your specific case with a licensed Maryland attorney.