Medicare and Medicaid Liens on a Vermont Injury Settlement

By the FigureMyTax Editorial Team · How we calculate

The Vermont Agency has a lien on your recovery to the extent of what it paid, with priority over all other claims on the total amount recovered. Your attorney may withhold the Agency's pro rata share of reasonably necessary attorney fees, costs and expenses, and a court-fixed medical allocation limits the lien. Medicare recovers under federal rules.

The lien

33 V.S.A. 1910(a) and (e) gives the Agency a lien against the third party, and against its insurer for past medical expenses, to the extent of what it paid on any recovery by judgment, compromise, mediation or settlement. You or your attorney must allocate the full amount paid for past medical expenses and pay the Agency within 30 days of receiving proceeds, or put that sum in escrow pending agreement, mediation or a court decision. The lien has priority over all other claims on the total recovered.

Fees and the court allocation

Under subsection (k), when the recovery results from your action, your attorney may withhold the Agency's pro rata share of reasonably necessary attorney fees, costs and expenses. Under subsection (l), where the court has determined the amount of recovery allocated for past medical expenses, the lien is limited to that amount. The Agency may reduce or compromise its claim, considering liability issues and the total amount available.

Perfecting it

The lien is not effective unless notice is filed with the town clerk and the Agency mails notice to the person alleged to be liable, with an itemized statement within 45 days after filing; you and your attorney must also inform the Agency in writing within a reasonable time after learning it paid your expenses.

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 Vermont medical lien calculator.

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