Law Suit Crisis in NC? Not even close, malpractice refund check "in the mail"
NC Trial Law Blog hits 30,000 views

How does Medicaid interact with medical payments insurance?

I received a good question today and thought I would share my thoughts on the issue.  The question concerns Medicaid and "med pay".  In NC, Medicaid gets 100% of med pay (first party) insurance proceeds.  The problem is that quite often physicians and chiropractors often receive the med pay before the lawyer is involved.  Or, alternatively, the medpay is the only way for the client to receive certain non-Medicaid covered treatment. 

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

-$2,000 Medicaid 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 client in 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

www.NicholsTrialLaw.com 1.800.906.5984

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

anwalt fuer erbrecht

Very insightful. Thank you for your broad perspective.

vinus

It would pay for itself, would it be nice. But it can make very substantial improvements to it in regard to quality of service and reduction in costs.
===================================
vinus

Addiction Recovery North Carolina

[link=http://Addiction Recovery North Carolina[/link]

Seattle Chiropractic

Influencing topic and ideas you have provided. Every readers should follow this advice and ideas. I feel lucky i found this blog. Many thanks to the author.. :)

herfordshire

Thanks and looking forward for your post on making more. This looks like a great resource. I'm very interesting to read your blog. Thanks for posting this.

single gear juicer

Simply want to say your article is as astounding. The clearness on your put up is simply spectacular and that i can assume you're a professional in this subject. Well together with your permission allow me to seize your RSS feed to keep updated with imminent post. Thank you one million and please continue the gratifying work.

face lift without surgery

Hi, after reading this remarkable article i am as well happy to share my experience here with mates.

omega j8006

Wow, this post is pleasant, my younger sister is analyzing such things, therefore I am going to let know her.

learn bowling

Simply desire to say your article is as astonishing. The clarity for your put up is just cool and i can suppose you are an expert in this subject. Well along with your permission let me to grasp your RSS feed to keep updated with approaching post. Thank you a million and please continue the enjoyable work.

juicer review

You're so awesome! I don't suppose I've truly read a single thing like this before. So nice to find somebody with some unique thoughts on this topic. Really.. many thanks for starting this up. This site is one thing that is needed on the web, someone with some originality!

denver auto accident lawyer

Thanks a lot for sharing this with all people you actually recognize what you are speaking approximately! Bookmarked. Kindly also visit my website =). We could have a hyperlink trade arrangement among us

Blondell

Saved as a favorite, I like your site!

clash of clans hack no survey no password

erectile erecting erection erective erectors eremites eremitic eremurus. Conceived in 2004 by Yuhki Kamatani, Nabari no Ou has all the ingredients for a successful series, however with the release of volume 4, are they only now coming together. Speaking during the Gaming Insiders Summit (transcribed by [a]listdaily), Riccitiello said asking consumers to pay $60 for a video game is 'a giant F-U to a very large number of people.

Clash Of Clans Hack

I used to be able to find good advice from your content.

odloty.pl

Good wаy of explaining, and niсxe paгagraph to obtaiin data regarding my presentation subject matter, which i am going to deliver in college.

3DS Emulator

The most common applications include Autodesk 3ds Max, Blender, Autodesk Maya. When DS lite arrived into picture, the program utilized a similar chips and firmware such as the earliest NDS edition; it remained comparable using the premier Nintendo itself. Only required for that is web interconnection as nicely as the firmware for actively playing them.

splinter cell pobierz

Hi there, yeah this article is actually good and I have learned lot of things from it abouht blogging. thanks.

Clash Of Clans Gem Hack

It's actually very difficult in this busy life to listen news on TV, therefore I just use internet for that purpose, and take the newest information.

counter strike

This game was a 2010 winner with the Doritos "Unlock Xbox" competition. I can only assme the reqsoning behind this is so tuat I may take a dynamic role in achieving victory wijthout bots stealing the glory, but I mostly just found this tto become frustrating. Ppartner with India - NIC for Black - Berry Gamme Developmejt If you happen to be looking to the promotion aand development of multi-player games for Black - Berry devices, solutions with rich interface with icons and graphics, 3D programming for Black - Berry Game Development.

Ben

The scenarios you have give are quite good and well illustrated. Great Stuff!

The comments to this entry are closed.