44 THE QUEENS COURIER • QUEENS BUSINESS • APRIL 12, 2018 FOR BREAKING NEWS VISIT WWW.QNS.COM
The Elder Law Minute TM
Medicaid and Settlements: How Much Can
Medicaid Recoup for Medical Expenses?
BY RONALD A. FATOULLAH, ESQ.
AND DEBBY ROSENFELD, ESQ.
Sometimes, when an individual is
severely injured due to medical malpractice
or the negligence of another,
a component of his medical coverage
can be paid by the State’s Medicaid program.
Th is would be the case if the individual’s
own insurance was insuffi cient
to cover the cost of care and the person
was eligible for Medicaid benefi ts. If the
injured individual is ultimately rewarded
funds through a personal injury or
medical malpractice claim, the State
can recover a portion of such funds in
order to reimburse itself for the care it
provided.
When an individual is awarded a settlement
in a medical malpractice or personal
injury suit, it is typically for more
than just the medical expenses. A component
of the award is oft en attributable
to pain and suff ering, loss of wages
or an ongoing disability. A commonly
asked question is how much the State’s
Medicaid program can recuperate from
the settlement.
Prior to 2006, some states would claim
ELDER LAW
from victims more than just the part
of the award or settlement covering
the medical expenses regardless of how
much of the settlement was specifi cally
earmarked for those expenses. As
an illustration, consider that Medicaid
paid $200,000 for an injured individual’s
medical expenses. Th e individual
then arrived at a settlement and received
$300,000, of which $100,000 was allocated
for medical expenses, $100,000
for lost wages, and $100,000 for pain
and suff ering. Some states would recover
the entire $200,000 laid out by them,
leaving the injured person with only
$100,000, even though the settlement
allocated only $100,000 towards the
medical expenses.
In the 2006 decision of Arkansas
Department of Health and Human
Services, et al. v. Ahlborn, the United
States Supreme Court ruled that states
could only recover the portion of the
Medicaid expenses that the settlement
attributed to medical costs. Based on
Ahlborn, even if the state paid a higher
amount (as refl ected in the above example)
it could only be reimbursed pursuant
to the amount specifi cally attributable
to medical expenses in the settlement
agreement, leaving the balance for
the recipient.
Despite the Ahlborn decision,
Congress amended the Social Security
Act in 2013, thereby giving the states
the right to recover their entire medical
expenses from Medicaid benefi -
ciaries’ awards and settlements. Th e
entire amount laid out by the states
via their respective Medicaid programs
could be reimbursed before the benefi
ciaries received anything. Since 2013,
many attorneys have fought to eliminate
this provision and were successful
in delaying its implementation until
October of 2017.
Th e recent budget deal signed by
President Trump on February 9, 2018
has repealed the law in its entirety, thus
reinstating the Ahlborn holding. Going
forward, a State’s Medicaid program
will only be able to recover the medical
expenses specifi cally delineated in
the settlement agreement, even if such
amount is less than what was actually
paid. Th is will enable the injured person
who initiates a lawsuit to keep a greater
portion of his settlement.
In order to protect these proceeds
from future state retrieval, the recipient
can transfer the proceeds to a special
needs trust. Seeking the counsel of an
experienced elder law attorney to help
navigate this process is most advisable.
Ronald A. Fatoullah, Esq. is the principal
of Ronald Fatoullah & Associates,
a law fi rm that concentrates in elder
law, estate planning, Medicaid planning,
guardianships, estate administration,
trusts, wills, and real estate. Debby
Rosenfeld, Esq. is a senior staff attorney
at the fi rm. Th e law fi rm can be
reached at 718-261-1700, 516-466-4422,
or toll free at 1-877-ELDER-LAW or
1-877-ESTATES. Mr. Fatoullah is also
a partn er with Advice Period, a wealth
management fi rm, and he can be reached
at 424-256-7273.
RONALD FATOULLAH
ESQ, CELA*
editorial
Improve Your Life in 5 Easy Steps
Your ability to be happy
can be determined by your
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Take stock of your life and
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Don’t Call Me!
According to a recent
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Be Grateful!
Gratitude is fundamental
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Get organized!
Most people complain about not having
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Be Curious
Make it a priority to learn something
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Get started!
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Mindy Stern, SPHR, SHRM – SCP,
ACC is a leadership and career coach,
author, speaker and trusted HR advisor.
She spent over two decades in human
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com.
EMPLOYMENT
MATTERS
MINDY STERN
SPHR, SHRM-SCP,
/www.aimre-sourcegroup.com
/www.aimre-sourcegroup.com
/www.aimre-sourcegroup.com
