California Medicaid Health Care Liens

By Marcy B. Spitz, Esq.

 

Resolving Medi-Cal liens, via California’s Medicaid program, is vastly different compared to resolving Medicaid liens in other states. This difference is because Medi-Cal recently changed its process and will NOT issue any summary of Medicaid liens until the personal injury attorney provides settlement information to it.

 

What does this mean to you as a practicing attorney? You need to prepare and take proper steps to protect your plaintiff’s settlement against the Medi-Cal lien. Upon learning that your client is covered by Medi-Cal, you will need to notify them in writing (pursuant to CA Welf & Inst Code Section 14124.79 and 14124.73 through (015) Leg Sess). All communications with the Department of Health Care Services (DHCS) must have the beneficiary’s DHCS number on it and it can be found on their ID card. All attorneys, beneficiaries (if they are not represented), and/or the insurance carrier that has liability for the beneficiary’s claim have a duty to report to DHCS. This notice must be made within 30 days of filing a lawsuit.

 

Where Medi-Cal is starkly different than other Medicaid systems around the country is that Medi-Cal will not issue a any Medicaid lien until you report settlement or a last date of treatment (LDOT). This delay is problematic for many reasons:

1. It is difficult to ascertain what the lien may look like until after settlement numbers have been negotiated;
2. It is a long delay to find out about the reduction to your client’s settlement since it could take up to 120 days until the final lien is issued once settlement is reported or LDOT.
3. Upon scrutinizing the claims summary for related only charges, it could take some time to have unrelated charges removed from the lien and finalized since the lien could take up to 120 days from the time of settlement.

 

The process is not user-friendly for a plaintiff covered by Medi-Cal from any perspective. But you can protect your settlement process by taking just a few simple steps. First, set reasonable expectations with your clients. Next, take steps that allow you to back out of settlements where necessary, such as agreeing to conditional settlements (where the sole condition is Medi-Cal’s lien fits within the total value of the case. Finally, we normally consider liens a useful value-building tool in settlements; however, that tool isn’t available due to Medi-Cal’s rules. Look for alternatives like full record retrieval including a billing records request. While these tools can’t help you speed up the Medi-Cal lien process, they can help you prepare for the unknown that Medi-Cal has created.

 

MASSIVE is working with California government contacts to convince Medi-Cal to change its process. Until then, please take the above tips to protect yourself and your clients in this process.

 

MASSIVE is the partner you can trust to answer your questions and handle all your Lien Resolution and Future Medical Allocations (including MSAs). Contact our dedicated team of experts to learn more about our services.

 

 

(Added by Stats. 1976, Ch. 621.)

 

14124.78.

Notwithstanding any other provision of law, in no event shall the director recover more than the beneficiary recovers after deducting, from the settlement judgment, or award, attorney’s fees and litigation costs paid for by the beneficiary. If the director’s recovery is determined under this section, the reductions in subdivision (d) of Section 14124.72 shall not apply.
(Amended by Stats. 2007, Ch. 188, Sec. 72. Effective August 24, 2007.)

14124.76.

(a) No settlement, judgment, or award in any action or claim by a beneficiary to recover damages for injuries, where the director has an interest, shall be deemed final or satisfied without first giving the director notice and a reasonable opportunity to perfect and to satisfy the director’s lien. Recovery of the director’s lien from an injured beneficiary’s action or claim is limited to that portion of a settlement, judgment, or award that represents payment for medical expenses, or medical care, provided on behalf of the beneficiary. All reasonable efforts shall be made to obtain the director’s advance agreement to a determination as to what portion of a settlement, judgment, or award that represents payment for medical expenses, or medical care, provided of behalf on the beneficiary. Absent the director’s advance agreement as to what portion of a settlement, judgment, or award represents payment for medical expenses, or medical care, provided on behalf of the beneficiary, the matter shall be submitted to a court for decision. Either the director or the beneficiary may seek resolution of the dispute by filing a motion, which shall be subject to regular law and motion procedures. In determining what portion of a settlement, judgment, or award represents payment for medical expenses, or medical care, provided on behalf of the beneficiary and as to what the appropriate reimbursement amount to the director should be, the court shall be guided by the United States Supreme Court decision in Arkansas Department of Health and Human Services v. Ahlborn (2006) 547 U.S. 268 and other relevant statutory and case law.
(b) If the beneficiary has filed a third-party action or claim, the court where the action or claim was filed shall have jurisdiction over a dispute between the director and the beneficiary regarding the amount of a lien asserted pursuant to this section that is based upon an allocation of damages contained in a settlement or compromise of the third-party action or claim. If no third-party action or claim has been filed, any superior court in California where venue would have been proper had a claim or action been filed shall have jurisdiction over the motion. The motion may be filed as a special motion and treated as an ordinary law and motion proceeding and subject to regular motion fees. The reimbursement determination motion shall be treated as a special proceeding of a civil nature pursuant to Part 3 (commencing with Section 1063) of the Code of Civil Procedure. When no action is pending, the person making the motion shall be required to pay a first appearance fee. When an action is pending, the person making the motion shall pay a regular law and motion fee. Notwithstanding Section 1064 of the Code of Civil Procedure, either the beneficiary or the director may appeal the final findings, decision, or order.
(c) The court shall issue its findings, decision, or order, which shall be considered the final determination of the parties’ rights and obligations with respect to the director’s lien, unless the settlement is contingent on an acceptable allocation of the settlement proceeds, in which case, the court’s findings, decision, or order shall be considered a tentative determination. If the beneficiary does not serve notice of a rejection of the tentative determination, which shall be based solely upon a rejection of the contingent settlement, within 30 days of the notice of entry of the court’s tentative determination, subject to further consideration by the court pursuant to subdivision (d), the tentative determination shall become final. Notwithstanding Section 1064 of the Code of Civil Procedure, either the beneficiary or the director may appeal the final findings, decision, or order.
(d) If the beneficiary does not accept the tentative determination, which shall be based solely upon a rejection of the contingent settlement, any party may subsequently seek further consideration of the court’s findings upon application to modify the prior findings, decision, or order based on new or different facts or circumstances. The application shall include an affidavit showing what application was made before, when, and to what judge, what order or decision was made, and what new or different facts or circumstances, including a different settlement, are claimed to exist. Upon further consideration, the court may modify the allocation in the interest of fairness and for good cause.
(Amended by Stats. 2007, Ch. 188, Sec. 71. Effective August 24, 2007.)