Medicare and Medicaid Liens on a South Dakota Injury Settlement

By the FigureMyTax Editorial Team · How we calculate

Accepting South Dakota Medicaid is an assignment and subrogation by operation of law of insurance proceeds and claims for damages. The amounts are applied against the cost of medical care less all reasonable expenses, including attorney's fees. An attorney who after notice fails to recognize the assignment is liable for the full amount of assistance paid. Medicare recovers under federal rules.

Assignment

SDCL 28-6-7.1 says an application for or acceptance of medical assistance operates as an assignment and subrogation by operation of law of any rights to medical support, insurance proceeds, or both, including all claims or actions for damages, general or special.

Expenses and fees

The rights or amounts assigned are applied against the cost of medical care paid, less all reasonable expenses, including attorney's fees incurred by the applicant or recipient to collect the proceeds. The statute does not give a formula, so we show Medicaid reduced by your fee and cost share and let you enter the percentage you expect it to accept.

Attorney and insurer liability

Any insurance provider or attorney in fact who, after notice, fails to recognize or accept the assignment is liable to the department for the full amount of medical assistance paid for the accident, injury or illness. Ask your lawyer to confirm in writing what notice was given.

What we did not find

We found no South Dakota statute on the process after notice or on a court allocation of the medical portion; federal law, as read in Arkansas Department of Health and Human Services v. Ahlborn (2006), limits Medicaid to the portion of a settlement that represents medical costs.

Medicare

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. See how hospital liens work, what a compendium says about health plan reimbursement and the South Dakota medical lien calculator.

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