Highlights of the New Medicaid Subrogation Lien Statute After Wos v EMA Supreme Court Case

I’m a little late posting this new statute on my blog because I was so involved in getting the new Medicaid subrogation statute trimmed down and written in a way that it would be workable for trial lawyers. These changes were the result of the US Supreme Court Ruling in Wos v EMA issued March 20, 2013.

The Governor signed the new bill incorporating the holding of Wos on July 18, 2013. The bill is effective immediately. You can view House Bill 982, in final mark-up version here: House Bill 982 

Here are the things we KEPT in the old § 108A-57. Subrogation rights; withholding of information a misdemeanor:

• Medicaid is still limited to a maximum of 100% of the lien OR One Third (1/3) of the gross settlement.
• Medicaid still prorates within their 1/3 with unpaid medical providers asserting liens.
• Payment by the lawyer of the 100% or 1/3 of the gross settlement is full and final payment of Medicaid’s lien (but medical lien holders paid pro-rata still get are owed their balances pursuant to NCGS 44-49 and 50. 

Here are the NEW provisions that reflect the Supreme Court’s determination that our previous Medicaid statute was in conflict with Federal law:

• Medicaid recipients can challenge the 1/3 or 100% lien by filing a Petition with a court of competant jurisdiction for “a determination of the portion of the beneficiary’s gross recovery that represents compensation for the Medicaid claim.”
• TIMING OF PETITION: Those petitions must be filed within 30 days of all parties signing a settlement agreement OR court approval of the settlement OR a judgment being issued.
• The Court will conduct an evidentiary hearing and may consider any factors it deems just and reasonable in determining the allocation of the settlement.
• The burden of proof is on the petitioner to prove by “clear and convincing evidence” that Medicaid is demanding too large a portion of the settlement.

One other excellent part of the new statute says Medicaid can compromise the liens at any time:

(a3) Notwithstanding the presumption arising pursuant to subsection (a1) of this section, the medical assistance beneficiary and the Department may reach an agreement on the portion of the recovery that represents compensation for the Medicaid claim. 

In the past, Medicaid took the position they could not negotiate their lien with recipients. This new portion allows for that negotiation to occur at any time, even before a petition is filed.

Chris Nichols
www.NicholsTrialLaw.com