Medicaid Lien Guidelines

Medicaid is a federally funded health insurance program that is administered by states. Medicaid eligibility is limited to pregnant women, children, and low income people, unlike Medicare, which is available to senior citizens at least 65 years old. If you have received Medicaid benefits, liens can be filed against your assets to recover payments made by Medicaid on your behalf.

Basics

• Liens allow creditors, including Medicaid, to establish claims against you and collect payment, such as in the form of property or assets. For example, if you pass away and leave an estate, Medicaid officials can file a claim against the estate. Some states, such as Maryland, allow liens to be placed on property when a person resides at a nursing home and cannot return home. Exceptions include when the person has a spouse, unmarried child under 21 or disabled child with an interest in the home.

Litigation settlement

• Medicaid liens often are imposed in anticipation of a legal settlement, particularly when Medicaid has covered medical expenses related to the litigation (such as in the instance of a motor vehicle accident, or a slip and fall). The Department of Health and Human Services must be notified if a Medicaid recipient will receive a settlement. For instance, if you were involved in a car accident and filed a personal injury lawsuit, then a lien might prevent the entire settlement from being dispersed to you so that the award will pay your medical expenses. If your attorney did not notify Medicaid about the settlement, then most Medicaid programs will not deduct court costs or attorneys fees.

Exceptions

• Each state maintains its own rules regarding Medicaid liens. In general, a lien cannot be placed on a settlement award on behalf of a child. For example, if you are under 21 years old and were awarded money because of an accident, then Medicaid cannot recover from your settlement.

Significance

• You can work with Medicaid officials to settle liens if you want to retain the assets. Consider if your parents received Medicaid benefits and a Medicaid lien was placed on their property before they passed away. You could negotiate with Medicaid to clear the title if you want keep your parents' home.

Considerations

• When faced with complex Medicaid situations, you should consult with an experienced attorney who has handled Medicaid matters. If the state determines that you incorrectly received Medicaid benefits, a court order will be obtained and a lien will be filed against your assets; however, you also can face criminal penalties for fraudulently obtaining Medicaid benefits.