Medicaid Liens and Wrongful Death Cap

Under the North Carolina wrongful death statute, NCGS 28A-18, medical providers that have helped treat a person who then dies can only recover a maximum of $4,500 from a wrongful death settlement. Unfortunately, that cap does not apply to Medicaid’s lien if they have paid over $4,500 in medical bills.

That’s an amazingly low number when you consider that a “life flight” on a helicopter can cost $10,000 and even the emergency room treatment required for someone to simply die at the hospital might cost another $10,000. The doctors can get a really raw deal if the person is not insured. But what happens when the person is insured by Medicaid, and Medicaid pays the doctors and the hospital?

A lot of people ask me, “isn’t Medicaid limited to the same recovery as the hospitals and doctors? 

NO.

Medicaid is not limited to the $4,500 cap on recovery from wrongful death suits. Medicaid in NC is ALWAYS limited to recovery no more than 1/3 of the gross settlement, but the cap does not apply to them. Medicaid cites the Medicare case of Cox v. Shalala, 112 F.3d 151 (4th Cir. 1997). In Cox, Medicare was allowed to recover its entire lien, despite the cap on the recovery. My lawyer friend Tim Welborn of North Wilkesboro represented the Plaintiff in that case and did a great job on the briefs and pleadings. Unfortunately, Uncle Sam usually wins these things.

Is Medicaid right? Probably, and in light of recent NC decisions like Ezell, it is unlikely that our Supreme Court would apply the limit against Medicaid.