Medicare and Medicaid Liens on a Virginia Injury Settlement

By the FigureMyTax Editorial Team · How we calculate

The Commonwealth has a lien for the total amount Virginia Medicaid paid. It is inferior to reasonable attorney fees and costs, which are deducted from the total recovered, and superior to other liens. A court may reduce it after a good faith effort to negotiate. Medicare recovers under federal rules.

The lien

Va. Code 8.01-66.9 gives the Commonwealth a lien on your claim against the person who caused the injury for the total paid under the Virginia Medical Assistance Program and certain other programs. It also reaches funds due from your own insurance for those services and from uninsured or underinsured motorist coverage.

Ranking and fees

The lien is inferior to any lien for reasonable attorney fees and costs, which are deducted from the total amount recovered, but superior to all other liens. The amount may be compromised.

Court reduction

On motion by you, your representative or your attorney, after written notice to all lienholders and a good faith effort to negotiate a compromise, the court may reduce the liens and apportion the recovery between you, your attorney and the Commonwealth as the equities appear, and must give its basis in a written order.

Notice

Section 8.01-66.5 makes the lien effective only after written notice is served on or given to the person whose negligence is alleged, your attorney or you, but notice is not required if your attorney knew that the Commonwealth provided or paid for the services.

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 provider liens work, why Virginia bans subrogation in insured health plans and the Virginia medical lien calculator.

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