Great questions! Some answers:

Back on Feb. 4, 2019, the North Carolina Department of Health and Human Services announced the selection of Prepaid Health Plans that will participate in Medicaid managed care when the program launches in November 2019. The Department awarded contracts to five entities:

• Statewide PHP contracts were awarded to the following entities which will offer Standard Plans in all regions in North Carolina:
  • AmeriHealth Caritas North Carolina, Inc.
  • Blue Cross and Blue Shield of North Carolina
  • UnitedHealthcare of North Carolina, Inc.
  • WellCare of North Carolina, Inc.
  • A regional PHP contract was awarded to Carolina Complete Health, a provider-led entity, which will offer plans in Regions 3 and 5.

Plaintiff lawyers who represent clients who are Medicaid recipients who have been in car wrecks need to track what these entities pay for medical treatment in order to account for the Medicaid lien and repay the government.

Before this privatization of Medicaid, all of the subrogation has been handled by a group called HMS. Now that the PHPs have come along, we have to request subrogation information from each PHP.

Here is a list of the subrogation contacts for the Medicaid PHPs.

PHP Medicaid Lien Contact Information

Carolina Complete Health

Rawlings Group
4 Eden Parkway
La Grange, KY 40031
Phone: 888-285-1276
Fax: MANUAL FILE COORDINATOR at 502-440-1100
Email: CenteneReferrals@rawlingscompany.com

WellCare

Rawlings Group
4 Eden Parkway
La Grange, KY 40031
Phone: 888-285-1276
Fax: MANUAL FILE COORDINATOR at 502-440-1100
Email: CenteneReferrals@rawlingscompany.com

Healthy Blue

 P.O. Box 659940
San Antonio, TX 78265-9939
Phone: 844-916-3651
Fax: 844-634-2520
Email: NCCompliance@healthybluenc.com

AmeriHealth

Attn: Subrogation Unit
200 Stevens Drive
Philadelphia, PA 19113
Phone:215-863-5837
Fax: 215-863-5221
Email: subrogation@amerihealthcaritas.com

United Healthcare

Optum Subrogation
11000 Optum Circle
Eden Prairie, MN 55344
Fax: 800-842-8810
Email: subrogationreferrals@optum.com

Trillium: www.trilliumnc.org 

Phone: 877-695-1296
Email: Trillium@gainwelltechnologies.com

_________

The subrogation providers above are subject to change, but this is the list as of 8/25/2022.

Chris Nichols
Nichols Law Firm
North Carolina and Raleigh Personal Injury Lawyer

This post is an update on an earlier post concerning changes to the law of Medicaid subrogation in North Carolina. The earlier post can be seen here: Medicaid: “Ahlborn hearings” are back thanks to the 2018 federal budget which makes Medicaid provide lien reduction hearings again. But watch the deadlines!

Here is the short version of the history: In 2013 NC amended the law on Medicaid subrogation to allow for a reduction hearing to determine Medicaid’s final lien in a third party injury case. That law stood until October 1 of 2017 when a small change to the Federal law had the effect of making the NC statute inapplicable. In anticipation of the Federal change, NC lawmakers had inserted a law in the July 2017 state budget that said in essence, “if the federal changes happen on October 1, then our law changes to this…”. The new state law eliminated the reduction hearings and also eliminated Medicaid sharing prorata with valid medical lien holders. 

Then on February 9, 2018, the Federal Budget was passed and it retroactively repealed the changes that went into effect on October 1 in the federal law. In my opinion, this had the effect of essentially time traveling back to the last day of September, 2017 and making the October 1 federal changes never happen. Which means, of course, that the NC changes conditioned on the Federal changes, never happened either.

The end result is that as of February 8, 2018, the Medicaid lien law in NC was back to the statute that existed since 2013. Or at least that’s what i thought.

That leads me to now. I filed a declaratory judgment suit and motion to determine Medicaid lien in March of 2018 to request a Medicaid lien reduction under the 2013 NC law. In the Compliant I set out all of the changes described above and that the law of NC had “reverted” to the pre-October 1, 2018 law.

The State of North Carolina filed an Answer to the complaint an unequivocally Admitted all of the following allegations in the Complaint.

Long story short, my legal theory set out above is correct.

Below are the legal allegations in the Complaint.

Jurisdiction, Venue, and Governing Law

1. This Court has subject matter jurisdiction over this action pursuant to N.C. Gen. Stat. §7A-240 and §7A-243. This Court has personal jurisdiction in this matter pursuant to N.C. Gen. Stat. §1-75.4.
2. Venue is properly laid in this Court pursuant to N.C. Gen. Stat. §1-80 and §1-82.
3. That NCGS §108A-57 governs Medicaid lien recovery in North Carolina.
4. That NCGS §108A-57 was written, in part, to comply with the requirements set out in Wos v. E.M.A., __ U.S. __, 133 S. Ct. 1391, 1402 (2013) which affirmed that Arkansas Dept. of Health and Human Servs. v. Ahlborn, 547 U.S. 268, 284, 126 S. Ct. 1752 (2006) applied in North Carolina. Ahlborn established that the Department of Health and Human Services is prohibited from recovering “a portion of a Medicaid beneficiary’s tort judgment or settlement not designated as payments for medical care” because such recovery is barred by the federal Medicaid statute’s anti-lien provision, 42 U.S.C. § 1396p(a)(1).
5. That NCGS §108A-57(a2) provides a mechanism for a determination of the portion of the beneficiary’s gross recovery that represents compensation for the Medicaid claim and requires that an application for determining the lien under this subsection shall be filed with the court “no later than 30 days after the date that the settlement agreement is executed by all parties and, if required, approved by the court.”
6. That on October 1, 2017, NCGS §108A-57, was amended pursuant to NC Senate Bill 257. The amendment, which was conditioned upon changes to federal law going into effect the same day, said:
   
   “SECTION 11H.23. If Section 202(b) of the Bipartisan Budget Act of 2013, P.L. 113-67, takes effect on October 1, 2017, as provided in Section 202(c) of that act, as amended by Section 211 of the Protecting Access to Medicare Act of 2014, P.L. 113-93, and Section 220 of the Medicare Access and CHIP Reauthorization Act of 2015, P.L. 114-10, then G.S. 108A-57 reads as rewritten…”
   
7. On October 1, 2017, the changes to the federal law went into effect which triggered the changes to North Carolina law, eliminating procedure to request a court for the determination of a medicaid lien pursuant to NCGS §108A-57(a2).
8. On February 9, the United States Congress passed, and the President signed, H.R.1892 – Bipartisan Budget Act of 2018, which contained “SEC. 53102. THIRD PARTY LIABILITY IN MEDICAID AND CHIP”.
9. SEC. 53102 of H.R.1892, the Bipartisan Budget Act of 2018, repealed subsection (b) of section 202 of the Bipartisan Budget Act of 2013. The repeal stated that it “includ[es]any amendments made by such subsection” and the repeal “shall be applied and administered as if such amendments had never been enacted.”
10. The effect of all of these statutory changes on February 9, 2018 was that because the federal changes “had never been enacted” the changes to NCGS §108A-57 set out in NC Senate Bill 257 never took effect and the provisions of NCGS §108A-57(a2) allowing for judicial determination of Medicaid’s lien came back into existence on February 9, 2018.
11. That any matter settled between October 1, 2017 and February 9, 2018, could not apply for a lien determination during that time period and that NC DHHS properly refused to grant requests for reductions during that time frame.
12. That Plaintiff’s Workers’ Compensation case was approved for settlement in an Order of the Industrial Commission in IC. File No. Y26729 filed on January 24, 2018.
13. That upon the reinstatement of NCGS §108A-57(a2) on February 9, 2018, cases settled during the October 1, 2017 through February 9, 2018 period should have 30 days to file for hearings pursuant to NCGS §108A-57(a2) and that the first day they could request such hearing was February 9, 2018.
14. That Plaintiff in this matter has filed for this hearing pursuant to NCGS §108A-57(a2) within 30 days of February 9, 2018 and has satisfied the filing requirements of NCGS §108A-57(a2).

Again, all those allegations were ADMITTED by the State.

This should settle the question of what law applies now. I will also point out that the website for the General Assembly is still displaying the “new” (but incorrect) NCGS 108A-57. You can view the “old” (but now the current) NCGS 108A-57 in the body of the budget bill, Senate Bill 257 (2017) beginning at the very bottom of page 222 and continuing on to 223. All of the “repealed” portions in that Bill are now law again. Here is the link- go to page 222 or do a search for “subrogation” within the PDF. www.ncleg.net/Sessions/2017/Bills/Senate/PDF/S257v9.pdf

My firm is now taking in limited numbers of Medicaid reduction cases for other lawyers. Make sure you remember that you only have 30 days to file and serve your Motion to Reduce Medicaid lien beginning on the date that the client settles the case (signs the Release of Claims or a court approves a settlement).

Feel free to email me or call me if you have matter you think might qualify for a reduction. 

Chris Nichols
www.NicholsTrialLaw.com
Chris@NicholsTrialLaw.com

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

The oral argument can be heard here: http://coop.ca4.uscourts.gov/OAarchive/mp3/10-1865-20111026.mp3#

Chris Nichols
www.NicholsTrialLaw.com

The Centers for Medicare & Medicaid Services will be implementing a new and simple fixed percentage option that will be available to certain beneficiaries beginning November 7, 2011. This option is available to beneficiaries who receive certain types of liability insurance (including self-insurance) settlements of $5000 or less.

A beneficiary who elects this option will be able to resolve Medicare’s recovery claim by paying Medicare 25% of his/her total liability insurance settlement instead of using the traditional recovery process. This means that a beneficiary will know what he/she owes and will be able to immediately pay Medicare.

In order to elect this option, the following criteria must be met:

1. The liability insurance (including self-insurance) settlement is for a physical trauma based injury. (This means that it does not relate to ingestion, exposure, or medical implant), and
2. The total liability settlement, judgment, award, or other payment is $5000 or less, and
3. The beneficiary elects the option within the required timeframe and Medicare has not issued a demand letter or other request for reimbursement related to the incident, and
4. The beneficiary has not received and does not expect to receive any other settlements, judgments, awards, or other payments related to the incident.

A full explanation, including instructions on how and when to elect this option, will be available on this website on November 7, 2011 in the Fixed Percentage Option section of both the Attorney and Beneficiary Toolkits.

Please Note: When a beneficiary elects this option, he/she must understand that as part of choosing the option he/she will be giving up the right to appeal the fixed payment amount or request a waiver of recovery for the fixed payment amount.

I believe that House Bill 542 may “look” good for business but have the unintended consequence of making North Carolina the WORST place for manufacturing in the entire United States. I’ve inserted a few comments below in [BOLD] brackets.

Rep. Stam, Rep. Weiss, and Rep. Murray:

I am a lawyer, like each of you, and I would like to call to your attention what I think is a major unintended consequence of HB 542. I called each of your offices today to discuss this issue.

HB 542 destroys the right of a NC manufacturer and their insurance company to subrogate on catastrophic losses caused by defective products.This hurts manufacturing, business, and insurance interests in North Carolina.

Please read the below example:

Products Liability Immunity Destroys Business and Insurance Subrogation: HB 542 gives immunity from suit to any company that produces a faulty product that has been “approved for sale” by any State of Federal regulatory agency. This bar would apply to insurance subrogation claims against the original tortfeasor and therefore bars insurance companies and the self-insured from recouping losses caused by faulty products.

EXAMPLE.Power Plant Explosion: A North Carolina power company buys a defective industrial boiler from a Chinese (or any) manufacturing company. This product is “approved” by several state and federal agencies as required by law.” [Does this sound like the Apex Chemical explosion?]

That boiler explodes and spreads toxic ash over a 3 mile radius. The environment is polluted, people are made sick, and the business site is shut down. The NC business itself suffers a $300 Million dollar business and property damage loss and is sued by the State and citizens for the toxic ash injuries. The insurer for the power company (or self-insured company itself) must pay for the business loss, claims of injuries and property loss, but would be prohibited by HB542 from seeking a recovery from the negligent Chinese manufacturer. The State of North Carolina would be prohibited from seeking compensation for the loss to the environment and the toxic clean up costs. This will increase the cost of insurance for business and the State and possibly force insurers to stop insuring for loss from product defect.

HB542 uses the following definitions: [See page 8 of HB542] ” (1) “Claimant” means a person or other entity asserting a claim”

“Product liability action” includes any action brought for or on account of personal injury, death or property damage caused by or resulting from the manufacture, construction, design, formulation, development of standards, preparation, processing, assembly, testing, listing, certifying, warning, instructing, marketing, selling, advertising, packaging, or labeling of any product.” (Emphasis added)

“No manufacturer or sellershall be held liable in any product liability action if any one of the following apply:”

Under this very simple language above, businesses that suffer catastrophic losses due to product defects will NOT be able to recoup those loses.

Moreover, what will be the effect on Business Insurance Policies? A standard loss policy would have language like the following:

“If we pay a claim under your policy, we will take over your right to recover that amount from any other person or organization. You agree to cooperate with us and not do anything that will interfere with our chances of recovery”.

Insurers would be subrogated to the right of the North Carolina company. Because subrogation is “the substitution of one person in the place of another with reference to a lawful claim, demand, or right, so that he who is substituted succeeds to the rights of the other in relation to the debt or claim, and its rights, remedies, or securities,” the North Carolina Company would have no right to recover under HB542 and thus the insurance company would be subrogated to nothing.

North Carolina will be the ONLY state in the nation with such a law.

This raises many difficult questions:

1. Will insurance companies issue large commercial policies to North Carolina manufacturers know there will be no right to subrogate in failed products cases? Can businesses operate without this insurance?
2. Will North Carolina manufacturers receive insurance rate increases due to the higher cost risk for North Carolina claims?
3. Will manufacturers avoid locating in North Carolina because they will not be protected from defective products they purchase for their business?
4. Will insurance products for consumers be impacted by the lack of subrogation for faulty manufacturing? Will home owner insurance rates increase due to the number of fires caused by defective products where there will be no subrogatable interest for the insurance company?
5. Why would a manufacturer choose North Carolina over 49 other states knowing that it had no protections from faulty products within its own facility?

I ask that you stop HB542 before it further erodes North Carolina’s business economy.

Chris Nichols

________________________________

(update) 

A non-hypotehtical Example of Products Liability Subrogation In Insurance

Here is an excellent example of how subrogation works in the context of product liability claims. This is a blog post from Cozen O’Conner, a national law firm that helps insurance companies recover funds from manufacturers of defective produts when those products cause damage which is insured. Here is a link to their full blog post. Lasko Recalls 4.8 Million Box Fans

The case involved a massive barn fire at a breeding farm in Hondo, New Mexico. Six world class race horse breeding stallions were killed in the fire and the barn itself was totaled. Cozen O’Connor represented over sixty sophisticated horsemen clients who had ownership interests in the stallions, and their insurers. The insurers for the horses and the barn went to great lengths to preserve the fire scene, and as a direct result of their diligence the experts were able to examine each electrical device in the barn and identify the fatal flaw in the Lasko fan motor.

On March 24th (long after the fire) the Consumer Product Safety Commission announced a voluntary recall of 4.8 million Lasko box fans. The recall notice reports “an electrical failure in the fan’s motor poses a fire hazard to consumers.” The CPSC cites a “barn fire resulting in extensive property damage” as a basis for the recall.

If this fire had occurred in North Carolina under House Bill 542, the lawyers at Cozen O’Conner would have been barred from seeking recovery from Lasko. The insurer would have paid out millions and not been reimbursed by the negligent manufacturer of the fan. And who would absorb the cost of the unreimbursed expenses? Anyone who buys insurance.

_______________________________________

Hopefully this will make a difference. This bill is not just about people injured by defective products, but also business.

This is an actual photo of the Apex, NC plant explosion at a chemical storage facility.

QUESTION: Is Medicaid’s lien capped at one third of liability proceeds received or half of what is left over after attorney’s fees? In other words, if I am pro-rating a Medicaid lien with 44-49 liens and my fee is 25%, are they still sharing a third or are they sharing 37.5%?

ANSWER: Medicaid gets no more than 1/3 of the total settlement. Your attorney fees are irrelevant to Medicaid’s share. The most Medicaid can get is 1/3 of the settlement, even if you charge only 1 dollar as a fee.
 
Medicaid will prorate with NCGS 44-49/50 liens within their 1/3 share. But remember that paying the parorata share of the 44-49/50 liens does not extinguish the balance of the medical bill. The client still owes the balance after the prorata share unless you negotiate a “final payment” compromise with the mediacl provider. 44-49/50 simply act as as a way to get the lawyer out of the middle and get the provider some money before they have to turn to a collection action to get it.
 
The 1/3 (or Medicaid’s portion thereof) DOES take care of Medicaid, in full.

_________________________

Chris Nichols
www.NicholsTrialLAw.com

I don’t have a lot of time today to dig through this case, which is 50 pages long and denser than a fruitcake, but this is, in my opinion, and “extension” on Ahlborn. also, it addresses that tricky part of Ahlborn stemming from the “stipulation” of the meds and the “either/or’ aspect of the case as presented to SCOTUS.

Here is a good summary from Med Law Blog by Michael Cassidy: 

 http://www.medlawblog.com/archives/medicare-reimbursement-tristanis-blow-to-state-medicaid-agencys-third-party-liability-collection-practices.html

The gist of the majority opinion is that the majority interprets Ahlborn (which you will recall is a US Supreme Court decision) to say that NC Medicaid must have some mechanism to protect the injured party from giving ALL of their settlement or verdict to Medicaid. The majority goes on to say that NC’s 1/3 rule is just that stop gap measure and thus NC law is within the requirements of Ahlborn. 

Of course, the Ahlborn opinion actuallysays that Medicaid can only collect their prorata portion of a settlement as it relates to the medical bills Medicaid paid, but that was more or less ignored by our court. Ahlborn boils down to this: If the injured party collects 25% of the actual value of their case then EVERYONE, including Medicaid, should get 25% of what they are owed. All boats rise and fall with the incoming tide. Share and share a like. What’s good for the goose is good for the gander. You get it, right?

Well, the majority didn’t. 

They think that our “1/3 of the total settlement” cap on Medicaid recovery is the same thing as the Ahlborn “fair share” requirement. How? Well, because they said so, I guess. In fact, they not only said so, but implied that the Legislature “may have” intended the “cap” to work in this fashion, despite the fact that the cap was enacted YEARS before Ahlborn.

A simple example of impossibility:

Person in wreck has $200,000 of medical bills. Medicaid pays $100,000. The defendant only has $50,000 in insurance. What should Medicaid get, what should the client get?

Ahlborn Anlaysis:

1. What’s the case worth? At least $200,000, probably more like $500,000 plus, but of course we can’t know exactly. So let’s say $500,000.
2. Ratio of settlement to Value: $50,000 : $500,000 = 10%
3. Medicaid lien of $50,000 x 10% = $5,000 to Medicaid (the fair share)

Andrews Analysis:

1. What’s the case worth? Who cares!! In Andrews, ask, how much was the settlement? $50,000
2. What is 1/3 of the settlement? $50,000/3 = $16,666.66
3. Is Medicaid’s lien > 1/3? If yes, pay only 1/3. Medicaid will get $16,666.66 here.

My question: How can $16,666.66 and $5,000.00 BOTH comply with Ahlborn (the law of the land)?

ANSWER: They can’t, and the Minority opinion, written by Justice Hudson, points this out. I’ll discuss that in my next post.

CURRENT STATUS: Petition of Cert. to the Supreme Court of the United States has been filed.

So what should a (or this Raleigh) personal injury lawyer do with similar Medicaid issues right now? Well, I’d be in no rush to get them resolved in state court. I think our Superior Court Judges are stuck with Andrews right now. One might also consider going the Federal route. Or waiting for the US Supreme Court.

_____________

Nichols Law Firm
Chris Nichols

So when you make a settlement which will not cover “all” the bills, how do you handle this scenario? I see two ways to go about making the disbursement. I can’t say if one or the other is “right” as I don’t think the statutes clearly cover this.

It should go like this, hypothetically:

Scenario 1

Assume:

Med pay $2,000 (already paid to Chiro 1)

Settlement $10,000
Medicaid Lien: $5,000
Chiro 1: $1,000 (balance after med pay received of $2,000)
Chiro 2: $2,000 balance

So, now let’s apply the law and do the math:

$10,000 Settlement
-$3,333.33 Atty Fees
$6,666.66 Balance

1/3 of settlement is $3,333.33 for Medicaid purposes (Medicaid is limited to recovering 1/3 of settlement)

1/2 of Net is $3,333.33 for NCGS 44-49 lien purposes (Medical liens can only force the attorney to pay 1/2 of the Net settlement after attorney fees and it makes it easier when 1/2 of net and 1/3 are the same thing).

Medicaid shares pro-rata with unpaid medical providers within the 1/3.

$5,000 Medicaid
$1,000 Chiro 1
$2,000 chiro 2
$8,000 $3,333,3/$8,000 = 41.66% shares of the 1/3

Now we figure the prorata share for each lien holder using the percentage from above:

5,000 x 41.66% =$2,083.31
1,000 x 41.66% = $416.6
2,000 x 41.66% = 833.20

That’s how the 1/3 should be distributed BUT, since Medicaid is entitled to 100% of the medpay, they will get another $2,000 on top of the share above.

So:
$10,000 Settlement
-$3,333.33 Atty Fees
$6,666.66 Balance

-$2,083.31 Medicaid
-$416.6 Chiro 1
-833.20 Chiro 2
$3,333.50

-$2,000Medicaid Med pay
1,333.50 to Client

But there appears to be another way to do this. In the first scenario above we prorated Medicaid’s full lien, then paid Medicaid the $2,000 from the remainder of the settlement.

The second method would pay Medicaid the $2k medpay FIRST, then use the balance of the lien for proration purposes. That would give the other providers more money under pro-ration.

The second method would look like this:

Scenario 2

$10,000 Settlement
-$3,333.33 Atty Fees
$6,666.66 Balance

1/3 of settlement is $3,333.33 for Medicaid purposes

1/2 of Net is $3,333.33 for 44-49 lien purposes (makes it easier when 1/2 of net and 1/3 are the same thing)

Medicaid shares pro-rata with unpaid medical providers within the 1/3. (We’ve already taken out the $2k Medicaid will receive)

$3,000 Medicaid lien
$1,000 Chiro 1
$2,000 chiro 2
$6,000 $3,333.33/$6,000 = 55.55% shares of the 1/3

Now we figure the prorata share for each lien holder using the percentage from above:

3,000 x 55.55% = $1,666.50
1,000 x 55.55% = $555.55
2,000 x 55.55% = $1111.11

Since Medicaid is entitled to 100% of the medpay, they will get another $2,000 on top of the share above.

So:
$10,000 Settlement
-$3,333.33 Atty Fees
$6,666.66 Balance

-$1,666.50 Medicaid
-$555.55 Chiro 1
-$1111.11 Chiro 2
$3,333.50

-$2,000 Medicaid (Med pay)
1,333.50 to Client

Let’s compare scenarios now:

Scenario 1:

$2,083.31 (Medicaid prorated share) + $2,000 for med pay = 4,083.31 to Medicaid
$ 416.6 Chiro 1
$ 833.20 Chiro 2

Scenario 2:

$1,666.50 (Medicaid prorated share) + $2,000 for med pay = 3,666.50 to Medicaid
-$555.55 Chiro 1
-$1111.11 Chiro 2

So, technically, Scenario 2 is better for your clientin my mind because Medicaid is paid in full with $3,666.50 and there is more money available for the doctors (who are not paid in full but might be more likely to accept the higher % payment as payment in full).

I don’t know if there is a right or wrong to his one. I’m sure Medicaid would prefer to be paid more, and they may have a point since technically, the Medpay should have gone to them in the first place.

–Chris Nichols
www.NicholsTrialLaw.com

My thought is that if a State can usurp ERISA, and the SCOTUS allows that, why would the NC Anti-subrogation provision promulgated by our Commissioner of Insurance not do the same. Yeah, I know it is the whole “federal preemption argument” but if we keep seeing “holes” created in ERISA, maybe one will get big enough one of these days. I know this is a stretch. A big stretch.

From WorkPlaceProf Blog:

Ya win some, ya lose some if you’re the ERISA bar. In this instance, whereas the Supreme Court decided to hear LaRue v. DeWolff, Boberg & Associates , 06-856, it has denied review in the ERISA inalienability case of Cox v. DaimlerChrysler (06-273).

In Cox, SCOTUSBlog commented that the issue was whether:

it violates ERISA for a state to arrange to take 90 percent of a prison inmate’s pension benefits to help defray the costs of imprisonment. The Solicitor General, asked by the Court for the government’s views, had urged the Court to bypass the appeal by Michigan’s state attorney general, Mike Cox.

The whole inalienability question within ERISA in the criminal context will continue to percolate through the Courts. For example, see this post on United States v. Novak, 04-55838 (9th Cir. Feb. 22, 2007), in which the en banc Ninth Circuit found in a 10-5 decision that the Mandatory Victim Restitution Act (MVRA) trumps ERISA’s anti-alienation provisions that normally would keep retirement benefits from being disturbed by others.

____________________

Chris Nichols
www.NicholsTrialLaw.com