Medicare and Medicaid Liens on a Washington Injury Settlement

By the FigureMyTax Editorial Team · How we calculate

The Washington department is subrogated to your rights and has a lien on your recovery to the extent of the assistance paid. What it recovers bears its proportionate share of attorney fees and costs. Medicare recovers under federal rules.

The lien

RCW 43.20B.060(1) to (3) makes the department subrogated to your rights against the tort-feasor or its insurer and gives it a lien on any recovery, settlement proceeds and benefits from insurance you might be entitled to, to the extent of the value of the assistance paid. The lien is not effective against recoveries subject to wrongful death when there are surviving dependents. It becomes effective on filing with the county auditor.

Fees and costs

Under subsection (4), any amount paid to the department bears its proportionate share of attorneys' fees and costs, based on the fees and costs the court approved or, if none, on the written agreement between you and your attorney. The department may be heard on fees when a court approves them, receives a copy of your fee agreement at settlement, and may sue in superior court to void a settlement if the calculation of its share is inconsistent with that agreement or the fees are exorbitant.

Managed care

The department may delegate these rights to managed care organizations by contract (RCW 74.09.180 has the Health Care Authority's parallel right).

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 provider liens work and why Washington applies made-whole to health plans, then enter every claim in the Washington medical lien calculator.

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