Medicare and Medicaid Liens on an Oklahoma Injury Settlement

By the FigureMyTax Editorial Team · How we calculate

Oklahoma Medicaid has a lien on your recovery up to what it paid, with priority over other liens except Medicare and behind your attorney. Its recovery is reduced by a proportionate share of the cost of procuring the settlement, including attorney fees. Medicare recovers under federal rules.

The lien

63 O.S. 5051.1 says payment of medical expenses by the Oklahoma Health Care Authority creates a debt and, when you pursue a claim, a lien on your recovery up to the total amount paid. It has priority over all other liens except Medicare's and is inferior only to your attorney's lien. It applies to the entire settlement after the attorney's fees and costs unless a more limited allocation to medical expenses is shown by clear and convincing evidence.

Procurement-cost reduction

12 O.S. 994.2 reduces the recovery: take the ratio of the Medicaid payment to the settlement, apply it to the procurement costs, including attorney fees, and subtract that share from the Medicaid payment. If Medicaid paid as much as the settlement, the recovery is the settlement minus the procurement costs.

Notice and negotiation

You or your lawyer must notify the Authority of the claim before the settlement is final, and the Authority may negotiate a further reduction if you made a good-faith effort. Anyone who pays you after notice of the lien is liable to the Authority up to the money value of its assistance.

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 what a compendium says about health plan reimbursement, then enter every claim in the Oklahoma medical lien calculator.

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