Medicaid Liens

List of North Carolina Medicaid lien contacts for 2022 to request lien statements for personal injury cases

Hey wait, when did there get to be multiple insurers providing Medicaid benefits!?  And who do I contact to get a Medicaid lien?

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: [email protected]


  • WellCare:

Rawlings Group

4 Eden Parkway

La Grange, KY  40031

Phone: 888-285-1276  

Fax: MANUAL FILE COORDINATOR at 502-440-1100

Email: [email protected]

  • Healthy Blue

 P.O. Box 659940

San Antonio, TX 78265-9939

Phone: 844-916-3651

Fax: 844-634-2520

Email: [email protected]


  • AmeriHealth

Attn: Subrogation Unit

200 Stevens Drive

Philadelphia, PA 19113
Phone: 215-863-5837

Fax: 215-863-5221
Email: [email protected]


  • United Healthcare

Optum Subrogation

11000 Optum Circle

Eden Prairie, MN 55344

Fax: 800-842-8810

Email: [email protected]


  • Trillium: 

Phone: 877-695-1296



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 1.800.906.5984

Where do I find the Medicaid lien statute that allows a lawyer to reduce a Medicaid lien in North Carolina?

If you find yourself in a situation with a personal injury case in North Carolina where Medicaid is claiming a substantial portion of an already limited insurance settlement, and you need to reduce the Medicaid lien, there is a statutory process to request a reduction hearing.

The problem is that it is hard to find the statute that allows the hearing.  The reason for that is that due to some federal law changes, which were eventually reversed, North Carolina law changed, but then the new law was rendered inoperable by the federal law changing back.  Sounds complicated, and it is, but this post explains all of that:

The practical issue is this:  if you google "NC Medicaid Lien Statute" you will find the 2017 "changed" statute in NC that is no longer good law.  What you need is that statute language from before the 2017 changes.

That law is from House Bill 982 from 2013.   Below is a link to the bill that was signed into law.  This is, by way of the federal law changes and the magic of retroactive legal language, the real law on Medicaid liens now. This statute contains the procedure and deadlines you need to successfully challenge a Medicaid lien claim in North Carolina.


If you find yourself needing to challenge the lien claim, my office does this work for other lawyers on a case by case basis.  So give me a call to discuss.


Chris Nichols 1.800.906.5984

Medicaid: "Ahlborn hearings" are back thanks to the 2018 federal budget which makes Medicaid provide lien reduction hearings again. But watch the deadlines!

I'll put the most important thing first, then explain it.  This is just my opinion, and applies only to North Carolina law, but since deadlines may be running, I wanted to get it out there.
If you settled a case (by minor settlement, signed release, or Industrial Commission approval) in which Medicaid claimed a lien, between October 1, 2017 and February 9, 2018, you have 30 days from February 9 to file a motion in Superior or District court to seek a reduction of the lien under NCGS 108A-57.  30 days runs on the weekend of March 10-11, so calendar that for Friday March 9, 2018 (unless you want to play chicken with the weekend rule).  Example:  You settled a claim on October 15, 2017 that had a Medicaid lien that exceeded 1/3 of the settlement. You paid Medicaid 1/3 of their lien (or held the money) because there was no longer a statutory mechanism to reduce the lien.  You now have until March 9, 2018 to file a motion to reduce Medicaid's lien.
Let's define "settled" since that is the event that triggers the 30 day time limit to file the motion. Medicaid defines "settled" as:
        1)  The date upon which all parties execute a full Release of Claims; or,
        2)  For a minor, the date upon which the settlement is approved in a minor settlement hearing; or,
        3)  For a case in litigation that is tried, the date upon which Judgment is entered, or,
        4)  For a Workers Compensation case, the date upon which the Clincher is approved.
In addition to cases "Settled" during the period of October 1, 2017 and February 9, 2018, if you had a claim that settled up to 29 days before October 1, 2017, you may still have time to file for the lien reduction.  I can't tell you if you get only the remaining time you had left as of October 1, 2017, or if you get until March 9, 2018. Play it safe and choose the shorter time and file. Example:  You settled a claim on September 15, 2017.  Your 30 day window to file a motion for reduction would have run on Sunday, October 15, 2017.  But because federal law and state law changed on October 1, 2017, you could not file for a hearing.  I think, in the most conservative view, you now have the remainder of the time you would have had after and including October 1. And that remaining time begins to run again starting February 9, 2018.  October 1 to October 15 is 15 days.  February 9, 2018 plus 15 days is Saturday, February 24, 2018.  You would need to FILE the motion before February 24, 2018.  Think of it as a statute of limitations which is stayed because a person goes into a coma and becomes incompetent, but then they regain consciousness 5 months later and the statute starts ticking again where it left off.
Below I set out the history on this and then pose some questions you might have.  Pay attention to the part where we discuss what happens if you paid Medicaid from October 1, 2017 until February 9, 2018.  You may have an obligation to ask for a refund.
How did this get so screwed up, and what's Medicaid subrogation?
Up until 2006, the law was clear that NC Medicaid was entitled to 100% of their lien, not to exceed 1/3 of a settlement, prorated with medical providers who had valid liens.
In 2006, SCOTUS ruled in Arkansas v. Ahlborn that state medicaid subrogation statutes could not just set a percentage recovery of the settlement as the amount of subrogation and ingnore the relationship between the gross settlement, the client's recovery and the amount claimed in the medicaid lien. Ahlborn said states had to allow for a hearing mechanism for courts to set the lien in light of the recovery amount and how much of the recovery was for medical treatment as a proportion to the whole recovery.  Most states revised their Medicaid subrogation statues in 2006 and started to allow hearings to reduce Medicaid recovery.  They called them "Ahlborn hearings."
North Carolina did NOT follow Ahlborn. Much to everyone's frustration.
Several lawyers in NC challenged Medicaid's refusal to follow SCOTUS' ruling in Ahlborn.  All of the state actions challenging Medicaid's refusal failed in our appellate courts.
Then in April of 2013 SCOTUS issued an opinion in Wos v. E.M.A., upholding a 4th Circuit opinion (coming from North Carolina), and declaring that the North Carolina medicaid lien statute was in violation of the court's ruling Ahlborn.   By July of 2013, NCAJ had negotiated changes to the Medicaid lien statute to bring it into compliance with Wos and Ahlborn and provide a statutory mechanism to request a lien reduction hearing.  Those hearings need to be requested (i.e., filed with a court) within 30 days of the settlement (defined by the signing of a Release or a minor settlement or Industrial Commission approval).  This is the statute that was passed:  NCGS 108A-57
Finally, NC was compliant with Ahlborn and the few others states that ignored Ahlborn were changing too.  Meanhwile, in December of 2013, Congress was battling with President Obama to pass the first budget in years.  In October of that year, Congress allowed the government to shut down for 16 days until they passed a temporary continuing funding resolution. On December 26, 2013, Congress (to the surprise of many) passed the Bipartisan Budget Act of 2013.  Not until after it was signed into law did anyone notice this section:



LIABILITY SETTLEMENTS.— (1) STATE PLAN REQUIREMENTS.—Section 1902(a)(25) of the Social Security Act (42 U.S.C. 1396a(a)(25)) is amended— (A) in subparagraph (B), by striking ‘‘to the extent of such legal liability’’; and (B) in subparagraph (H), by striking ‘‘payment by any other party for such health care items or services’’ and inserting ‘‘any payments by such third party’’. (2) ASSIGNMENT OF RIGHTS OF PAYMENT.—Section 1912(a)(1)(A) of such Act (42 U.S.C. 1396k(a)(1)(A)) is amended by striking ‘‘payment for medical care from any third party’’ and inserting ‘‘any payment from a third party that has a legal liability to pay for care and services available under the plan’’.(3) LIENS.—Section 1917(a)(1)(A) of such Act (42 U.S.C. 1396p(a)(1)(A)) is amended to read as follows: ‘‘(A) pursuant to— ‘‘(i) the judgment of a court on account of benefits incorrectly paid on behalf of such individual, or‘‘(ii) rights acquired by or assigned to the State in accordance with section 1902(a)(25)(H) or section 1912(a)(1)(A), or’’.EFFECTIVE DATE.—The amendments made by this section shall take effect on October 1, 2014.

The very small change to the subrogation language in federal law had the effect of rendering Ahlborn and Wos moot as both cases depended on the specific language  which said "payment by any other party for such health care items or services" and  "payment for medical care from any third party" as the basis for the court's reasoning that Medicaid must, for lack of a better term, prorate settlement funds with the victim of negligence.
I called several members of Congress and found out that the provisions had been slipped in at the last minute and had been pushed by private third-party subrogation companies like Rawlings and HMS who are contractors for many state Medicaid offices.  Because these private companies take a percentage of recoveries they recover for the statse, they did not want to have payments to Medicaid (and their profits) lowered in favor of injured victims.
The statute changes did not go into effect until October of 2014, and under pressure from consumer groups, advocates for the disabled, and AAJ, the effective date was pushed to October of 2016.  Then as we got closer to October of 2016, it was pushed to October of 2017. Victims of negligence who faced massive injuries with small liability policies were receiving relief from unwieldy Medicaid liens.  Injured Plaintiffs could then use those funds to pay for services that Medicaid would not cover for the disabled Plaintiffs. Additionally, Medicaid was still prorating their recovery with valid medical lien holders under NCGS 44-49.
Meanwhile, in 2017, with a new Congress and new President, the North Carolina legislature inserted a change to NCGS 108A-57 in the July 2017 Budget (Senate Bill 257). The changes included a complete re-write of NCGS 108A-57, which eliminated a lien reduction hearing, re-instituted the 1/3 cap on Medicaid recovery (the Plaintiff repaid Medicaid 100% of the lien up to 1/3 of the gross settlement) and the proration with unpaid medical providers with valid liens was eliminated.
This new law only went into effect IF the federal changes from 2013 went into effect on October 1, 2017.  The prelude to the change in NC law was a classic "IF/THEN" proposition (highlight added):

NC Senate Bill 257


 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:

"§ 108A-57. Subrogation rights; withholding of information a misdemeanor.

(a) As used in this section, the term "beneficiary" means (i) the beneficiary of..... (then went on to rewrite the subrogation statute)

Consumer lobbying groups were unable to persuade Congress and HHS to delay the implementation of the October 1, 2017 changes, and therefore NC law changed on October 1, 2017 pursuant to the "IF/THEN" portion of the statute.
Which brings us to February 9, 2017. As many of you will recall, after a brief shut down of the US government from midnight of February 8 to the early hours of February 9, Congress passed and the President signed  H.R.1892 - Bipartisan Budget Act of 2018.  
Thanks to consumer lobbying by AAJ and other disability advocacy groups, the new federal budget repealed the changes to Medicaid law in the 2013 budget as follows:



(b) Delay In Effective Date And Repeal Of Certain Bipartisan Budget Act Of 2013 Amendments.—

(1) REPEAL.—Effective as of September 30, 2017, subsection (b) of section 202 of the Bipartisan Budget Act of 2013 (Public Law 113–67; 127 Stat. 1177; 42 U.S.C. 1396a note) (including any amendments made by such subsection) is repealed and the provisions amended by such subsection shall be applied and administered as if such amendments had never been enacted.

(2) [Does not apply to subrogation]

(3) EFFECTIVE DATE; TREATMENT.—The repeal and amendment made by this subsection shall take effect as if enacted on September 30, 2017, and shall apply with respect to any open claims, including claims pending, generated, or filed, after such date. The amendments made by subsections (a) and (b) of section 202 of the Bipartisan Budget Act of 2013 (Public Law 113–67; 127 Stat. 1177; 42 U.S.C. 1396a note) that took effect on October 1, 2017, are null and void and section 1902(a)(25) of the Social Security Act (42 U.S.C. 1396a(a)(25)) shall be applied and administered as if such amendments had not taken effect on such date.

So where does this leave us?

Based upon the language of the Bipartisan Budget Act of 2018, the changes to the key language which vitiated Ahlborn and Wos in 2013 and went into effect on October 1, 2017, are now a nullity.  According to the newest federal law, the changes in 2013 were never put into effect on October 1, 2017, because they were repealed on September 30, 2017.
And because Section 202(b) of the Bipartisan Budget Act of 2013, did not take effect on October 1, 2017, there is no change to NCGS 108A-57, the Medicaid subrogation statute.
Which means that 108A-57's requirements to request a lien reduction hearing are still in effect. NCGS 108A-57requires:
(a2)      A medical assistance beneficiary may dispute the presumptions established in subsection (a1) of this section by applying to the court in which the medical assistance beneficiary's claim against the third party is pending, or if there is none, then to a court of competent jurisdiction, for a determination of the portion of the beneficiary's gross recovery that represents compensation for the Medicaid claim. An application under this subsection shall be filed with the court and served on the Department pursuant to the Rules of Civil Procedure no later than 30 days after the date that the settlement agreement is executed by all parties and, if required, approved by the court, or in cases in which judgment has been entered, no later than 30 days after the date of entry of judgment. The court shall hold an evidentiary hearing no sooner than 30 days after the date the action was filed. All of the following shall apply to the court's determination under this subsection:
So what is the deadline to file for 108A-57 hearings to reduce Medicaid's lien for cases settled from October 1, 2017 to February 9, 2018?
The way the federal changes were implemented on February 9, 2018 leaves a vacuum from October 1, 2017 until February 9, 2018 for all settlements where Medicaid claimed a lien on settlement proceeds.  Obviously, during that time period, a Plaintiff had no statutory mechanism to file for a Medicaid reduction hearing under NCGS 108A-57.  So there can be no 30 day time limit to file during those months.
So what happens to Plaintiff cases that settled (by release, minor settlement of Industrial Commission Order) from October 1, 2017 until February 9, 2018?
The only logical conclusion is that the 30 day time limit to file a motion for Medicaid lien determination for cases settled from October 1, 2017 through February 9, 2018,  begins on February 9, 2018 and runs 30 days until and including Friday March 9, 2018 (or Monday March 12, 2018 if you want to use the "weekend rule", but why risk it?).
This means that if you settled a case during that time, you MUST file,"by applying to the court in which the medical assistance beneficiary's claim against the third party is pending, or if there is none, then to a court of competent jurisdiction, for a determination of the portion of the beneficiary's gross recovery that represents compensation for the Medicaid claim. An application under this subsection shall be filed with the court and served on the Department pursuant to the Rules of Civil Procedure no later than 30 days after the date that the settlement agreement is executed by all parties and, if required, approved by the court, or in cases in which judgment has been entered, no later than 30 days after the date of entry of judgment."
Practically, this means you need to file a motion for determination if you have a case pending, and if you don't, you will need to file a Complaint in the underlying action and include a motion to determine Medicaid's lien. 
What if I had a case settle less than 30 days before October 1, 2017, but I didn't get a motion filed before October 1, 2017?
I think that the most conservative approach would be that you get whatever time you had left in your 30 day time limit added on beginning February 9, 2018.  So if 25 days had gone past from the settlement of your case in September of '17 when October 1 happened, you would get 5 more days to file, beginning February 9, 2018 and ending February 13 (or maybe 14th depending on how you count it).
What if I paid Medicaid 100% or 1/3 of the settlement from October 1, 2017 through February 9, 2018?
If you paid Medicaid during the "vacuum time" of October 1, 2017 through February 9, 2018, I think you have a 30 day window to request a hearing to have the lien payment evaluated by a court.  I would assume that if you convinced the Judge that your client did not need to pay the Medicaid lien 1005 of 1/3 of the settlement, that the Judge could order Medicaid to issue a refund for the overpayment.  Also keep in mind that Medicaid now has to pro-rate with unpaid medical providers with valid liens.
What if I paid Medicaid 100% or 1/3 of the settlement from October 1, 2017 through February 9, 2018 and I'm ok with the amount BUT I wasn't able to pay valid medical lien holders because Medicaid would no pro-rate under the revised statute in effect at that time?
This is a harder question.  Before October 1, 2017, you could tell Medicaid you had valid lien holders, prove that with copies of the liens, and reduce Medicaid's lien by the prorated amounts of the medical lien holders.  You didn't need a hearing to make Medicaid prorate.  It was by operation of law in all scenarios where you pay subrogation:.

NCGS 108A-57

(a5)      The medical assistance beneficiary or any attorney retained by the beneficiary shall, out of the proceeds obtained by or on behalf of the beneficiary by settlement with, judgment against, or otherwise from a third party by reason of injury or death, distribute to the Department the amount due pursuant to this section as follows:

(1)        If, upon the expiration of the time for filing an application pursuant subsection (a2) of this section, no application has been filed, then the amount presumed pursuant to subsection (a1) of this section, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the beneficiary's receipt of the proceeds, in the absence of an agreement pursuant to subsection (a3) of this section.

(2)        If an application has been filed pursuant to subsection (a2) of this section and no agreement has been reached pursuant to subsection (a3) of this section, then the Department shall be paid as follows:

a.         If the beneficiary rebuts the presumption arising under subsection (a1) of this section, then the amount determined by the court pursuant to subsection (a2) of this section, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the entry of the court's order.

b.         If the beneficiary fails to rebut the presumption arising under subsection (a1) of this section, then the amount presumed pursuant to subsection (a1) of this section, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the entry of the court's order.

(3)        If an agreement has been reached pursuant to subsection (a3) of this section, then the agreed amount, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the execution of the agreement by the medical assistance beneficiary and the Department.

I do not think the 30 day deadline to file a motion applies to this situation if you have already paid Medicaid.
I think you should only have to write a letter to HMS/Medicaid, show them what you paid, prove that there were valid liens when you overpaid Medicaid, and ask that Medicaid refund the portion of the proceeds which should have been paid to valid medical lien holders. I don't know if Medicaid would want to make that check payable to your client (I'm guessing they will want to do that), or to the medical providers.  Then it would be up to you to distribute the funds.
Practically, if you had the valid medical liens during this time, you need to notify your client of the changes in the law and that the client has the option of having you ask Medicaid to make a refund that will be paid toward their unpaid medical balances.
But wait, I paid Medicaid on some liens from October of 2017 until February of 2018.  I don't think those cases needed a lien reduction hearing. Do I HAVE to look back and see if any of those files had valid medical liens that should (had the law allowed at the time) have been prorated with Medicaid?
Do you HAVE to ask for a refund of the (now) overpayment to Medicaid when there were valid medical provider?  Probably so. 
Why?  You have a legal duty pursuant to NCGS 44- 49 and 50, and now an ethical duty, pursuant to 2017 Formal Ethics Opinion 4,  to honor valid medical provider liens, regardless of the client's desires.  When you combine your duty to pay a valid medical lien under NCGS 44-49 and 50 with the ethical duty imposed to honor valid legal liens, I think you have to go back and look at any Medicaid payments you made from October 1, 2017 until February 9, 2018.
In summary, this is all great news for Plaintiffs, but we have to watch the potential deadline issues!
Questions?  Feel free to email at [email protected]
Chris Nichols 1.800.906.5984

Highlights of the new Medicaid Subrogation lien statute after Wos v EMA Supreme Court Case

I'm a little late posting this new statute on my blog because I was so involved in getting the new Medicaid subrogation statute trimmed down and written in a way that it would be workable for trial lawyers.  These changes were the result of the US Supreme Court Ruling in Wos v EMA issued March 20, 2013.

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 settelement is full and final payement 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 1.800.906.5984

4th Circuit Court of Appeals upholds application of Ahlborn in NC- rejects reasoning of NC Supreme Court in Andrews


After about 7 years of multiple protracted litigation on three separate cases, the United States Court of Appeals for the 4th Circuit has established in the matter of E.M.A. v. CANSLER,  that Ark. Dep't of Human Servs. v. Ahlborn, 547 U.S. 268 (2006) is the law of North Carolina and that the NC Supreme Court opinion of Andrews v. Haygood did not properly interpret Ahlborn as it applies to NC Medicaid reimbursement.

Congratulations to Bill Bystrynski of Kirby & Holt of Raleigh, NC for the huge win for his client.

I'm going to keep this post fairly short and then add more posts with analysis, but I think the court puts their finding best.

Given that North Carolina common law does not bar DHHS’s lien against E.M.A.’s settlement proceeds, we arefaced with the same question considered by the North CarolinaSupreme Court in Andrews: Whether North Carolina’sthird-party liability statutes comport with federal Medicaidlaw and Ahlborn merely because the subrogation statute, N.C.Gen. Stat. § 108A-57, "caps" the state’s recovery at the lesserof the actual medical expenses paid or one-third of the totalsettlement. The North Carolina Supreme Court in Andrewsand the district court in this case adopted a narrow interpretationof Ahlborn, limiting its holding to cases in which the partieshave stipulated to or otherwise allocated settlementproceeds between different categories of damages, therebyidentifying a sum certain for medical expenses. Thus, thesedecisions are based on the view that Ahlborn is inapplicablein cases involving an unallocated lump-sum settlement, suchas the instant matter.On the contrary, however, nothing in Justice Stevens’sopinion for a unanimous court in Ahlborn supports such acrabbed application of that case. The Ahlborn Court addressedthe specific issue of "whether [ADHHS] can lay claim tomore than the portion of [the recipient’s] settlement that representsmedical expenses." 547 U.S. at 280.

The Court in no way rested its analysis of this issue on whether there has been a prior determination or stipulation as to the medical expensesportion of a Medicaid recipient’s settlement. Thus, Ahlborn isproperly understood to prohibit recovery by the state of morethan the amount of settlement proceeds representing paymentfor medical care already received. The North Carolina statute’sone-third cap on the state’s recovery against a Medicaidrecipient’s settlement proceeds does not satisfy Ahlborn insofaras it permits DHHS to assert a lien against settlement proceedsintended (or otherwise properly allocable) tocompensate the Medicaid recipient for other claims, such aspain and suffering or lost wages (i.e., in cases where one-thirdof the recipient’s total settlement recovery is greater than theamount DHHS expended on the recipient’s behalf).10 See Andrews, 669 S.E.2d at 607-09 (Hudson, J., dissenting) (concludingthat the North Carolina statutes conflict with federalMedicaid law by allowing the state to recover from a recipientfunds that were for purposes other than medical expenses);Andrews, 655 S.E.2d at 445 (Wynn, J., dissenting) (same).


We are not persuaded that a mere "reasonable cap" on astate’s recovery from an unallocated lump-sum settlement satisfiesthe federal anti-lien law as required by Ahlborn. Indeed,contrary to the Andrews court’s reliance on Justice Stevens’sfootnote, the ATLA Brief, rather than advocating full recoverysubject only to a statutory cap, discussed procedures inseveral states to have "mini-hearings" to set allocations ofproceeds from tort settlements where there is no agreementamong the interested parties. Nevertheless, the Supreme Courtof North Carolina found that footnote 18 in Ahlborn authorizesthe states to mandate full recovery up to a legislativelydetermined,across-the-board limit or cap. This reliance is misplaced.


On the basis of Ahlborn’s clear holding that the general anti-lien provision in federal Medicaid law prohibits a statefrom recovering any portion of a settlement or judgment not attributable to medical expenses, DHHS’s lien on E.M.A.’ssettlement proceeds in this case violates federal law. In order to comply with 42 U.S.C. §§ 1396a(a)(18), 1396p, and Ahlborn,North Carolina is free to implement a process by whichsettlement proceeds are explicitly allocated or otherwisedetermined. In this case, we must remand for an evidentiaryhearing consistent with this opinion to determine the properamount of the DHHS lien on E.M.A.’s settlement proceeds.

You can read the full opinion here:   Download F-Opinion


This is an outstanding opinion and reflects the excellent analysis of Judge Wynn and Judge Hudson on the NC cases of Ezell and Andrews.

I'll be writing a whole lot more on the issue, but wanted to get this out there.

I'm also proud that the 4th Circuit relied on a Memorandum issued by CMS to the states in their decision:

It is also illuminating that the Centers for Medicaid andMedicare Services ("CMS") issued a memorandum to all Associate Regional Administrators for Medicaid and State Operations in the wake of the Ahlborn decision to aid the states in understanding the effect the decision would have onstate third-party liability recovery. See Memorandum from Gale Arden, Director of CMS’s Center for Medicaid and StateOperations Disable and Elderly Health Programs Group(DEHPG) to all Associate Regional Administrators for Medicaidand State Operations, "State Options for RecoveryAgainst Liability Settlements in Light of U.S. Supreme CourtDecision in Arkansas Department of Human Services v. Ahlborn"(July 3, 2006) (hereafter "CMS Memorandum"). The CMS Memorandum stated that, post-Ahlborn, "if a State attempted to recover from more than the portion of a settlementthat the parties allocated to medical items and services,it was in violation of the federal anti-lien statute." Id. Additionally,the CMS Memorandum clarified that, "to the extent State laws permit recovery over and above what the partieshave appropriately designated as payment for medical itemsand services, the State was in violation of federal Medicaidlaws." Id.  (Page 32)

NCTrialLAw Blog was the first blog to find and publish Download CMS Advisory Ahlborn Settlement Options (July 2006)-1 after some deep searches on the Internet.  It was a sort of "smoking gun" that showed that CMS itself was telling the State of North Carolina that Ahlborn applied.

Chris Nichols 1.800.906.5984

When is a medical provider required to accept Medicaid in an injury case?

Increasingly, lawyers find that even when an injured client has some type of health care coverage, when the client has been injured by the negligence of a third party, it is often difficult to get the health insurer to pay the bills.  Typically, this stems from the Health Insurance contract having language that says the insurer is a "secondary payer" or "payer of last resort".

In the not too distant past, Medicaid was a reliable source for payment of medical bills for clients who were from low incomes homes or disabled (but not eligible for Medicare).

In the last five years, Medicaid has changed rules which emphasize that Medicaid is a secondary payer to third party liability insurance.  While this seems "fair" in the sense that the negligent third party caused the injury, the reality is that Liability Insurance Companies rarely, if ever, "pay as you go" for medical treatment.  To protect their insured (and their bottom line) they refuse to pay for services as they are rendered and choose to pay "at the end" of the case, after treatment is completed.

This makes it hard for clients to get needed medical treatment, makes that treatment more "expensive" for the client, and takes away Medicaid's 1/3 "cap" on recovery from liability settlements.

I frequently get inquiries from lawyers about how to "make Medicaid pay" for medical treatment.  Alternatively, the question is also "How can I force the medical provider to submit the bills to Medicaid?"  Many medical providers do not like being paid by Medicaid because the reimbursement rates are low and the provider must accept Medicaid's payment as payment in full (aside from the $3 co-pay Medicaid allows).

Below I have pasted the relevant sections from Medicaid's manual to medical providers which provide the framework for how to get the bills paid.

You can view the entire Medicaid manual here.

Retroactive Eligibility
Retroactive coverage may be approved for up to three calendar months prior to the month of the application if the applicant meets all eligibility conditions in the retroactive period. Medicaid will pay for covered services received during the retroactive period provided that all other Medicaid guidelines are met. Providers may choose to accept or decline retroactive eligibility. However, the provider's office policy should be consistently enforced. If a provider accepts retroactive eligibility, upon receipt of Medicaid reimbursement, the provider shall refund to the recipient all money paid by the recipient for services covered by Medicaid.
Accepting a Medicaid Recipient
In accordance with 10A NCAC22J.0106, a provider may choose whether to accept a patient as a Medicaid patient.  However, Medicaid providers must be consistent with their policies and procedures when accepting or refusing Medicaid recipients. Providers may not discriminate against a Medicaid recipients based on the recipient's race, religion, national origin, color, or handicap.
Agreeing to provide services to a Medicaid recipient and submission of a claim to the N.C. Medicaid Program for payment constitutes agreement to accept the Medicaid payment (in addition to any authorized copayment or third-party payment) as payment in full.

A provider may refuse to accept a Medicaid recipient and bill the recipient as private pay only if the provider informs the recipient prior to rendering the service, either orally or in writing, that the service will not be billed to Medicaid and that the recipient will be responsible for payment.

But of course, you have to compare those passages to the rules regarding Third Party Laibility situations: 
Third-Party Liability
State and federal regulations for third-party liability (TPL) require responsible third-party insurance carriers to pay for medical services prior to a provider's submitting a claim to Medicaid. Providers are required to seek payment from third-party insurance carriers when they know of their existence. A third-party insurance carrier is an individual or company who is responsible for the payment of medical services. These third parties are Medicare, private health insurance, automobile, or other liability carriers. DMA's third party recovery (TPR) unit is responsible for implementing and enforcing TPL laws. The TPR unit implements and enforces these laws through both cost avoidance and recovery methods. Refer to Section 7, Third-Party Insurance, for additional information.

Continue reading "When is a medical provider required to accept Medicaid in an injury case?" » 1.800.906.5984

Attorney fees and Medicaid lien cap in North Carolina personal injury cases

Just had a great straight forward question about the interaction of Medicaid Liens, Attorney Fees, and medical provider liens pursuant to NCGS 44-49-50.

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 1.800.906.5984

PA Federal Western District tosses out Medicaid Lien...sorta

Congratulations to attorney Patrick J. Loughren of Pennsylvania for his victory in Tristani v. Richman, a medicaid subrogation case.

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: 1.800.906.5984

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


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.

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

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


-$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.

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

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

-$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 1.800.906.5984