Medicare and MassHealth Liens on a Massachusetts Injury Settlement

By the FigureMyTax Editorial Team · How we calculate

MassHealth must be repaid from the money allocated to medical expenses in your settlement, and if none is allocated the settlement is presumed to apply first to medical expenses equal to its benefits. You must notify it within 10 calendar days of starting recovery activity and before any settlement is final. Medicare recovers under federal rules.

The repayment duty

G.L. c. 118E, section 22(b) says that when you or your heirs or representative receive payment from a liability insurer or other third party, you must repay the executive office of health and human services the total medical assistance benefits provided, from the monies allocated to medical expenses in the payment, settlement, award or judgment. If the allocation to past medical expenses is insufficient, it may recover from an allocation for future medical expenses.

The presumption and disputes

If the settlement does not say what part is for medical expenses, it is presumed to apply first to medical expenses equal to the benefits paid. The agency may dispute an allocation that leaves it with less than full recovery and have a court hearing, before or after disbursement, and it is not barred from enforcing recovery from a settlement that excludes the cost of benefits (subsections (c) and (d)).

Notice

You, or your lawyer, must notify the agency in writing within 10 calendar days of starting recovery activity, such as making an insurance claim or sending a demand letter, and on starting a civil action. No settlement, judgment or recovery may be made final without written notice to the agency and a reasonable opportunity to intervene (subsection (j)). The application for and receipt of benefits operates, after notice to the third party, as a lien, and the agency may also perfect a lien on money in your attorney's hands by giving notice (subsection (g)).

Fees

We did not find in this section a reduction of MassHealth's claim for your attorney's fees, so the calculator does not reduce it.

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 the hospital lien works and what Massachusetts law says about health plan reimbursement, then enter every claim in the Massachusetts medical lien calculator.

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