Medicare and Medicaid Liens on a Utah Injury Settlement

By the FigureMyTax Editorial Team · How we calculate

Utah Medicaid benefits payable by a third party are assigned by operation of law, and the department's lien has priority over all other claims on the proceeds except attorney fees and costs under a collection agreement. In that case it pays attorney fees at 33.3 percent of its total recovery plus a proportionate share of litigation expenses. Medicare recovers under federal rules.

Assignment and lien

Utah Code 26B-3-1003 assigns by operation of law the benefits payable by a third party. Section 26B-3-1009 makes the claim a lien on the proceeds payable to or for you, with priority over all other claims except attorney fees and costs. The department may waive, compromise, settle or release its claim in whole or part, and its claim is not enforceable against a third party that settles without written notice of it unless the third party knew.

Notice and consent

Section 26B-3-1011 says you may not file a claim or settle without the department's written consent. You can give notice within 10 days of making the claim, or your attorney within 30 days of being retained or learning of the assistance, by certified mail, personal service or email to the Office of Recovery Services. The department must respond within 30 days.

The fee share

If your attorney enters a written collection agreement with the department, or includes its claim in your action, the department pays attorney fees at 33.3 percent of its total recovery plus a proportionate share of litigation expenses directly related to the action.

Paying it first

Section 26B-3-1012 says no disbursement may be made to you or your attorney until the department's claim is paid, funds held in your attorney's trust account must be remitted within 30 days, and a knowing failure to comply makes you liable for the claim, a 10 percent penalty and fees.

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. See how hospital liens work, why Utah applies made-whole to health plans and the Utah medical lien calculator.

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