Medicare and Medicaid Liens on a Texas Injury Settlement

By the FigureMyTax Editorial Team · How we calculate

Receiving Texas Medicaid is an assignment of your right of recovery from another person for personal injury, limited to the cost of services paid. The executive commissioner may waive it in whole or in part. Medicare recovers under federal rules.

Assignment

Tex. Hum. Res. Code 32.033(a) says filing for or receiving medical assistance is an assignment of your right of recovery from personal insurance, other sources, or another person for personal injury caused by that person's negligence or wrong.

Limits and your duties

The commission's right of recovery is limited to the cost of medical care services it paid, and a claim for damages is not grounds to deny or stop assistance. You must tell the commission of an unsettled tort claim within 60 days of learning of it; a knowing and intentional failure to disclose is a Class C misdemeanor. The state also has a separate cause of action and may sue directly.

Waiver

The executive commissioner may waive the right of recovery in whole or part when enforcement would tend to defeat the purpose of public assistance. We found no statute that deducts attorney fees from the commission's claim.

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 why made-whole does not apply to Texas health plans, then enter every claim in the Texas medical lien calculator.

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