State Medicaid agencies are now limited in their ability to recover Medicaid liens against a beneficiary’s tort settlement according to a United States Supreme Court decision released on May 1, 2006. In the case of Arkansas Department of Health & Human Services et al., Petitioners v Heidi Ahlborn 547 US 04-1506 (2006) the Supremes ruled that the lien may only be satisfied out of that portion of the settlement allocated to past medical expenses.
Could the parties simply allocate away Medicaid’s interest? The Court contemplates this possibility in stating that “the risk that parties to a tort suit will allocate away the State’s interest can be avoided by either obtaining the State’s advance agreement to an allocation or, if necessary, by submitting the matter to a court for decision."
A copy of the United States Supreme Court decision in Arkansas Department of Health & Human Services et al., Petitioners v Heidi Ahlborn can be found by clicking on the following link
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