Friday, February 27, 2009

ERISA Reimbursement Claims

Posted by Sylvius Von Saucken

I have a couple of questions that are related to your [recent presentation] on ERISA reimbursement claims. I have one that I’m preparing to negotiate, and have pulled the Form 5500 from, along with schedule A.

Line 9a of the form 5500 pertaining to the plan funding arrangement shows the plan in question to be funded by insurance, trust and general assets of the sponsor based on the boxes checked. On line 7 of schedule A regarding the benefit and contract type, only the box pertaining to dental is checked.

Does this indicate that the only portion of the plan that is funded via insurance is the dental, and that the remainder is self funded? Also, if an employee contributes to the health insurance through a contribution deducted from his or her paycheck, does this take the plan out of the domain of self funded?

Lastly, I understand that an important consideration is whether or not the employee still needs the coverage. The plan language in the plan at issue does have language stating that in the event a reimbursement claim is not honored that benefits will cease to be paid. Can a plan do this even if the plan is funded by insurance and/or the plan language does not meet Sereboff/Popowski?

-Georgia Attorney

Facts: Line 9a of the form 5500 pertaining to the plan funding arrangement shows the plan in question to be funded by insurance, trust and general assets of the sponsor based on the boxes checked. On line 7 of schedule A regarding the benefit and contract type, only the box pertaining to dental is checked.

Q1: Does this indicate that the only portion of the plan that is funded via insurance is the dental, and that the remainder is self funded?

A1: Not necessarily. Without looking at the plan, but based on your description it is possible that you have obtained the Form 5500 for the dental plan, administered by a TPA, but another 5500 may exist for the health insurance (full) plan.

One way to check is to compare the plan numbers (or employer or administrator EINs) with the Summary Plan Documents to ensure you have matched the correct 5500 with the correct plan documents.

You might also look to Schedules H and I to glean the rest of the information to help you to determine the funding arrangements of the plan (if only one). As Matt indicated in his presentation, the information on the Form 5500 on line 9a (Funding Arrangement) is intended to provide the DOL (Dept of Labor) and IRS with relevant information concerning how the plan is funded before benefits are paid out. Line 9b (Benefits Arrangement) shows how the benefits are paid. The responses on Lines 9a and 9b are cross-referenced against information on Schedules H, I, and/or A, as appropriate. Plan administrators must attach the appropriate financial or insurance schedule (H, I, A) that corresponds to the Benefit and Funding Arrangements indicated by the plan administrator.

For example, where "Trust" is indicated as an Arrangement, then a Schedule H or I (as appropriate) should be submitted with the Form 5500. Likewise if "Insurance" is listed on line 9a you look to Schedule A. Schedule H is for “large plan” filers (generally plans with 100 or more participants at the beginning of the plan year) and all Direct Filing Entities (with DOL). Schedule I is for “small plan” filers (generally plans with fewer than 100 participants at the beginning of the plan year).

Q2: Also, if an employee contributes to the health insurance through a contribution deducted from his or her pay check, does this take the plan out of the domain of self funded?

A2: That is unlikely. The definition of self-funded plans under ERISA provides certain key points as follows:

Definition: written contract for health benefits between employer and health plan provider, NOT insurance policy, can cross state lines (multi-state application):
Participation: mostly large employers
Payout: employers pay claims out of company assets
Types of health plans: managed care plans only
Consumers: pay deductibles, co-pays, and / or coinsurance
Benefits: usually selective, often restrictive

The point of the self-funded distinction is that the employer and employee have engaged in a private contract using the employer’s own funds to start the plan. The fact that co-pays are made does not change the nature of the plan, as at the point of inception (and each successive year), the funding of the plan is made by the employer. However, this can vary by contract, provided the employer follows the ERISA guidelines with respect to plan operations.

Q3: Lastly, I understand that an important consideration is whether or not the employee still needs the coverage. The plan language in the plan at issue does have language stating that in the event a reimbursement claim is not honored that benefits will cease to be paid. Can a Plan do this even if the Plan is funded by insurance and/or the Plan language does not meet Sereboff/Popowski?

A3: The plan language can provide that benefits will cease to be paid, as this is a private contract. We have seen similar language used before to great effect in terms of negotiations, but typically those terms include the concept of reasonableness.

Our private lien group can certainly take a look at the language you uncovered and see if there is more to the story on the way towards negotiating down the equitable lien (if any) to ensure your client’s net settlement is maximized.

Please feel free to contact us with any further questions.

Thursday, February 26, 2009


Posted by Sylvius Von Saucken

During a recent CLE I attended, I noticed that Anthem was referred to several times during your presentation and I wanted to know whether there are special concerns when dealing with Anthem that should be taken into account?

-Georgia Attorney

We referenced Anthem as a good example of a large health insurance company that we would expect would have similar “locked-in” plan language as did Wal-Mart (e.g. that the specific fund doctrine applies because they can recover specifically from the settlement/award, but only up to the amount of medical expenses.) We would expect Anthem to stay on top of all subsequent changes to ERISA through common (case) law because they have hundreds of firms on their payroll to make sure they have the most recent language. Even so, we would ask for Anthem Summary Plan Descriptions, plan language and Forms 5500, with all schedules attached, and look on to gather as much information as we could to ensure that the language grants the carrier the rights their subrogation agents say it does. (DON’T TAKE THEIR WORD FOR IT!)

Can a military veteran receive TRICARE benefits?

Posted by Sylvius Von Saucken

I have a client who is a military veteran. Is it possible he could still be receiving TRICARE benefits or does one automatically switch over to VA services when leaving active duty?

-Georgia Attorney

It depends on when he left active service. If the service member signed on to continue TRICARE coverage as a veteran, there may be a limited window of coverage before VA completely takes over (similar to COBRA interim coverage). However, if he is a combat veteran, specifically one who served in Iraq, the military (VA) would cover him for 5 regardless of situation.

post-Knudson case

Posted by Matthew Garretson

Mr. Garretson, I attended and enjoyed your telephone seminar of Feb 3, 2009. I have a follow up question relating to a case post-Knudson wherein a child dart-out victims suffered severe brain damage. The case was settled with the purchase of a structured settlement annuity. Now the ERSIA collection agency is nosing around. Are there any cases of which you are aware that deal with this issue? Any post settlement way to protect the annuity? Thanks in advance for your thoughts.

-Atlanta Attorney

There is a lot of misinformation out there about this issue. The idea that it offers any protection comes from a misreading of Great West v. Knudson, and courts all over the country don’t give it any credence. (While that case dealt with a Special Needs Trust and not a structured settlement, the issue is really the same). In Knudson, the lien holder would have prevailed had it sued the trustee as well. Eliminating all doubt is the Wal-Mart v. Shank case (500 F.3d 834) where the 8th Circuit specifically cracked open an SNT to satisfy Wal-Mart’s lien. The logic continues that if a lien holder names the life insurance company (assignment company in the structured transaction), it logically could get “cracked open”. Some commentators have opined that a structure is different than a trust b/c the claimant has not right to the assets, only the right to receive future payments. I see that argument to be non-persuasive – Courts have become much more liberal in construing “tracing” doctrines against claimants in recent cases. (i.e. courts have been tracing money beyond just money in the claimant’s “possession” – like checking accounts – and exploring recovery out of where the money went – like a house or any other assets).

Tuesday, February 24, 2009

VA Claims

Posted by Sylvius Von Saucken

What rights of recovery does the VA have?

The “VA claim statute” and its corresponding regulation grant the United States the right to recover reasonable charges in repayment for health care benefits provided to a veteran through the U.S. Department of Veterans Affairs (VA) from certain third parties who would otherwise be liable for the veteran's medical care.

The VA has authority, similar to that provided to CMS under the MSP statute, to recover from third parties payments it has made for injury-related medical care for nonservice-connected disabilities. However, that authority is limited to recovery from the employer or carrier in a WC claim, from a health plan contract, or from an automobile liability policy.

A “disability” is defined under federal law governing VA benefits as “a disease, injury, or other physical or mental defect.” This definition is much broader than the Social Security Act's definition of “disabled.” Thus, a VA claim may exist, even if the claimant is not able to qualify for Medicare or for SSDIB under Social Security based on “disability.”

Finally, the VA's right to recover from third parties is limited to payments for nonservice-connected disabilities. This means that the claimant's disease, injury or other physical or mental defect cannot have been “incurred or aggravated... in the line of duty in the active military, naval or air service.”

While the statute and regulation are silent regarding the VA's right to recover third-party payments received by the claimant, the statute does grant the VA a right of subrogation. Further, the statute grant's the VA the right to intervene in the WC case as a party. It would seem logical that this would imply a duty on the claimant to inform the VA of the existence of the claim in sufficient time to allow it to exercise its right to either institute or intervene in the WC case.

There is no provision under the statute or the regulation that would permit the VA to recover from any third party after there has been a settlement. However, it would also seem to follow that if a claimant settles a WC claim for medical benefits without notifying the VA, the VA would have the ability to enforce its right against the settlement proceeds in the hands of the claimant.
The Supplemental Appropriations Act of 2002 provides that, as between Medicare and VA medical benefits, Medicare is the secondary payer. Thus, Medicare's secondary payer claim for Medicare overpayments must be satisfied before any VA claim against the settlement.

Friday, February 20, 2009

Advise Medicare of error?

Posted by Mary Skinner

I am representing a Medicare beneficiary in a slip & fall. Medicare has been notified. The client had surgery. We have EOBs documenting Medicare paid for hospital and surgical expenses. I have twice requested that CMS provide a statement of the total claimed by Medicare for conditional payments and twice received statements that Medicare is claiming zero. Obviously if I settle my file and send a "final" settlement statement Medicare can come back with an amended claim. My concern is whether I have a further statutory obligation or professional duty to protect Medicare when it is not advocating its own interests. Medicare's claim for reimbursement is statutory and can reach counsel. Rule 1.15 obligates counsel to protect the rights of known lienors. There is an argument that Medicare's interest is not a lien but a super right to reimbursement (whatever the difference may be) asserted first against the beneficiary and subsequently against other involved parties in the claim process. Do I have an obligation to at least escrow what I know from EOBs to have been paid by Medicare? How can I protect myself against Medicare coming back against me in the future? Obviously I wish to handle the matter in accordance with my professional responsibilities but Conn. Supreme Court precedent regarding the State, and by arguable extension other creditors including the feds, indicates that if no formal claim is advanced counsel can ethically disburse to the client. Any feedback and suggestions would be appreciated.

You are under no statutory obligation to advise Medicare of their error, however, it is in the best interest of the client to make all attempts to advise Medicare of the missing claims. This should be done in writing to Medicare advising them of the related claims that are not on the CP. If Medicare comes back again with a zero interest letter, then you have met your professional responsibilities and due diligence in attempting to get the correct lien amount. With that said, I would not disburse any funds until Medicare issues the final demand amount, reimbursement to Medicare has been made and you are in receipt of notice from Medicare that the file is closed.

Tuesday, February 17, 2009

Fen-phen Cases / MSAs

Posted by Sylvius Von Saucken

What is your position on the MSAs for Fen-phen cases? Are you recommending that they be done for settlements under $250,000? All of our clients 62 1/2 or over are receiving less than $250,000. Has anything changed in the viewpoint on requiring MSAs? Also, I have one client who received about $45,000 and is now having a valve surgery. No MSA was done and the conditional payments lien is still being resolved. We were starting to look at completing MSAs for these clients. Please advise.

-Louisiana Attorney

Actually, when we verified conditional payments with CMS for groups of Fen-phen cases, we also discussed with the CMS representatives the future costs of care components. CMS advised that for cases in excess of $1 million, we had to analyze each case to determine the necessity of a Medicare Set Aside. It turns out that of the 1,000’s Medicare entitled beneficiaries with Fen-phen settlements (on which we were working), six had settlements substantial enough to warrant a liability MSA analysis. Of those cases, we found a need to create an MSA in 2 cases (so we did).

The Medicare Set Aside analysis we have done with respect to liability cases is vastly different from workers’ compensation cases. Our analysis is unique – and based on the current state of the laws.

First, before any MSA is evaluated, a future cost of care component to the settlement must be identified. That creates a ceiling, not a floor, to identify what, if any, future Medicare covered expenses are a part of the settlement.

Next, even if there is a future cost of care component, an MSA is only required if there is a permanent burden shift such that prior to settlement one party is responsible for the payment and management of injury-related medical care but after the settlement Medicare is responsible.

Finally, if you have affirmative answers to the first two steps, you need to identify what part of the future costs of care Medicare will actually pay for. This is the step where an MSA report is developed. That report is nothing more than a redacted life care plan; redacted to determine what Medicare’s out-of-pocket costs will actually be.

Importantly, when considering liability MSAs, the question of damages brings up pain and suffering, special damages and comparative fault issues that make it less than likely that any part of a $45,000 settlement has an allocation for future Medicare covered expenses.

The other important consideration is that the $250,000 threshold for workers’ compensation cases is just a CMS review threshold to determine whether CMS approval is needed. If you have a case, whether or not $250,000 that meets the future costs of care and permanent burden shift analyses, then an MSA report is appropriate – to properly consider Medicare’s interests in your Medicare beneficiary client’s settlement. We stand ready to continue to assist you and your clients.

WCMSA Threshold

Posted by John Cattie

If a settlement is under $25,000, no need to worry about Medicare/Medicaid, right? It's been so long since I've had to deal with these now, I wanted to make sure. Do you remember what year they changed the requirement from $250,000 to $25,000 for the Trust requirement?

-Ohio Attorney

In the CMS Memo dated 4/25/06, CMS raised the low dollar threshold level in WCMSAs from $10,000 to $25,000. As you will see, this amount represents a workload review threshold, not a safe harbor amount. Medicare’s interests must be taken into consideration in a WC case no matter what the settlement total. If there is going to be a permanent shift of the burden of future injury-related costs of care from the WC carrier to Medicare as a result of the settlement, and the claimant will have future injury-related costs of care otherwise covered by Medicare, a WCMSA is appropriate per the guidance we have received from CMS for WC settlements. I am happy to discuss this and related topics with you further at your convenience. Please let me know how I can assist.

Monday, February 9, 2009

Medicare Lien, Funeral Expenses

Posted by Mary Skinner

We have a nursing home neglect case with a $53,183 Medicare lien. Roughly, we will have to pay Medicare back 60% since our fee is 40% and pro rata of expenses with a payback of approximately $28,000 to Medicare. We can certainly maintain that the client’s death was caused by sepsis from pressure ulcers that he unnecessarily acquired at the defendant nursing home.

The big question is this: if we were to settle this case for $75,000, leaving about $34,000 net, can we take the funeral bill ($11,000) and headstone bill ($7,000) off the top, as administrative costs of the wrongful death estate, leaving the balance of $16,000 to Medicare?
Thanks for your thoughts on this.

-Indianapolis Attorney

Medicare will not consider funeral expenses when requesting a waiver (out of pocket expenses). Medicare will not consider the funeral expenses a case expense.

A. Beneficiary Documents Out-of-Pocket Expenses.
The following documentation should be considered proper proof of the expenses paid:
• Notarized/sworn statement which attests to the validity of the expenses;
• Canceled checks (which correlate to bills received);
• Receipts for services furnished; and• Copies of bills demonstrating services furnished.

B. Beneficiary’s Assets Insufficient to Repay Medicare
The contractor must not automatically assume that out-of-pockets should be waived. Using assets reported on the Form SSA-632-BK - Request for Waiver of Overpayment, it determines whether the beneficiary was actually able to afford the out-of-pocket expenses.

The following are types of out-of-pocket expenses that may support granting a waiver:
• Housing renovation - beneficiary’s residence had to be modified to accommodate beneficiary because of an accident-related injury e.g., addition of a ramp to accommodate a wheel chair;
• Adult diapers - where the accident caused loss of bladder use;
• Prescriptions for medication needed as a result of an accident-related injury;
• Private duty nursing or custodial care not covered by Medicare;
• Coinsurance and deductibles not covered by supplemental insurance; and
• Expenses for dental work caused by the accident.

Contractors should not consider:
• Funeral expenses; or
• Travel for relatives (even if accident-related).

Medicare Set Aside Accounts

Posted by Matthew Garretson

I just learned of this animal today. It provides for fines and what appears to be attorney liability if funds are not set aside out of settlement proceeds for future medical expenses to be incurred by a plaintiff who is receiving Medicare at the time of settlement or who may be receiving it within 30 months of settlement. It is based on the Medicare, Medicaid and SCHIP Extension Act of 2007. How does this work?

-Wisconsin Attorney

There is a lot of misinformation about this issue out there. The difficult issue here is that there is the Medicare Set Aside ("MSA") industry that is trying to drive clients towards MSAs as a result of Section 111 of the MMSEA. Having listened to the first 5 town hall teleconferences with CMS (starting Oct. 1, 2008 and ending on January 28, 2009) concerning MMSEA application, it is clear that MMSEA does NOT equal MSA. In fact, the sole purpose of Section 111 is to close a perceived loophole in conditional payment reporting. This (to date) has nothing to do with future costs of care. Section 111 modifies 42 U.S.C. Section 1395y(b) by adding a new para. (8), which creates the concept of "Responsible Reporting Entities". But those MSA vendors who are drumming up business by stating that these new reporting requirements extend to future Medicare covered expenses is to blatantly ignore the import of the rest of 42 U.S.C. Section 1395(y)(b), which addresses CMS' recovery rights for medical payments made on a conditional basis when the plan provider or other insurer has not promptly made such payments.

This issue crystallizes when you consider the statutory history of MSP. On Dec. 5, 1980, the MSP statutes as we know them today were modified to take into account these subrogation issues. It was not until 23 years later, under Section 301 of the Medicare Modernization Act, when Congress added (and the President signed into law on Dec. 8, 2003) enforcement provisions to the MSP statute, focusing compliance on plaintiffs' attorneys and their Medicare entitled clients. Now, 4 years later, on Dec. 29, 2007, Congress closed the loop with Section 111 of the MMSEA by placing a reporting obligation on defense insurance carriers. Note that for plaintiffs and their attorneys, the obligation is to "verify and resolve", but for defendants, the sole obligation is to verify. Simply put, CMS is merely stating that when the law says that it is meant to be a secondary payer, they mean it. Section 111 does not reach to future costs of care issues, and is not intended to.

Instead, it is intended to address the other half of the reporting obligation when two parties agree to settle their differences, and from date of injury to date of settlement, CMS has been making payments for injury-related medical expenses on a conditional basis.

Wednesday, February 4, 2009

Medicare Question

Posted by Sylvius Von Saucken

Our client is a 34-year-old young woman who is about to receive a non-compensable settlement from her employer in the amount of $40,000 to basically buy peace in relation to a work injury.
Although we do not know the exact figure of the Medicare lien at this time, her medical bills total $41,000. My question is whether this “buy peace” settlement qualifies as a third party contribution which has to be reported to Medicare. Your assistance in this dilemma is greatly appreciated.

-New Hampshire Legal Assistant

To address your question I have a few points of clarification/questions, which relate to conditional payments (past), and which might also relate to the employer’s duty to notify Medicare (through MMSEA’s reporting requirements):

1. From the fact pattern, it appears that this is a workers’ compensation settlement, in which the “buy peace” part might be considered the indemnity portion of the settlement.

2. If correct, then what part of the settlement, if at all, relates to medical expenses (whether past or future)? If there is a part of that settlement which includes past medicals paid for by Medicare on a conditional basis, then the reason for settlement may not be as relevant to the reimbursement obligation. This would trigger opening a tort recovery record with the COBC (CMS /Medicare’s contractor in NY).

3. If incorrect, and this is really a liability case, the answer to your question is still “yes” Medicare should be contacted, but another question arises. “How much might Medicare be entitled to recover?”

4. The answer to this second question lies in the allocation methodology of the case. For example, if the $40,000 is being paid and can be shown to be paid for economic and non-economic damages that have nothing to do with past medical expenses, then an argument can be made that the Medicare claim (as distinguished from a lien due to the independent cause of action Medicare can assert under 42 U.S.C. §1395y(b)) is limited to only that part which is allocated for medical expenses.

5. Nevertheless, the crux of your question – must you notify Medicare – is “yes”, because the point is to protect your client’s Medicare card (by having Medicare pay for injury and non-injury-related care in the future). Contacting Medicare ensures that protection. Not contacting Medicare leaves open the risk of loss of coverage. If Medicare has paid for injury-related care on a conditional basis, then it has a right of recovery under the MSP. Medicare’s recovery rights are not limited just because there is a “make peace” settlement. Instead, the critical inquiry is whether Medicare paid for your clients’ medical expenses on the condition that when your client settles with a third party, Medicare gets reimbursed.

6. Thereafter, the question remains “how much”. If you can get Medicare to waive any interest based on proof that this settlement was unrelated to personal injury damages, then you might be able to significantly reduce any Medicare claims. But that is provided you report the settlement and make the arguments as part of the recovery process.

7. Finally, note that if the employer settles before July 1, 2009, and has no continuing obligation to manage your client’s medical care, reporting by the employer to CMS under the MMSEA (Medicare Medicaid SCHIP Extension Act of 2007) should not be a factor. If, on the other hand, the employer will continue to pay for medical expenses, then the employer may have a reporting obligation as a “responsible reporting entity” under Section 111 of the MMSEA.

We trust this information has been helpful.

Tuesday, February 3, 2009

Negotiating a Medicare Lien

Posted by Mary Skinner

I have a settled Personal Injury case with a Medicare lien. As we all know, we cannot get a final lien until after a settlement. Well, the final lien amount we received was double what the interim amount we had back in August was and my client stopped treating way before last August (who knows where the numbers came from). Do you have a contact in Medicare that I can call about this lien problem? How are they with negotiating and do you have a contact for negotiating the lien?

-Ohio Attorney

Even though the final lien amount may be incorrect, reimburse Medicare the amount they are demanding within the 60 days, otherwise interest will accrue. While Medicare does not negotiate, per se, there are remedies in the MSP provision for disputing their demand amount.
If the additional claims on the summary are clearly not related to your clients’ injuries you must send in a letter disputing the claims. Unfortunately Medicare will not remove the claims via phone call... they have to have the dispute in writing. If claims you are disputing include diagnosis codes that are related to your client’s injury then you will need to submit medical documentation to support your position. Also, make sure that the final summary does not include any claims that are for treatment past the settlement date.

Nursing Home, Medicare Lien - New Twist?

Posted by Matthew Garretson

I have a case that settled against a SNF. It was settled at a pre-litigation mediation. I have been trying to find out if MSPRC is asserting a lien against the case. They refuse to accept a copy of the will which shows the son as the personal representative. They are insisting that an estate be opened up, so that they can get a "court document" showing the son is appointed the PR, before they will calculate and release lien information.

The decedent died without any assets or debts. I think the opening of an estate would be a waste of time.

Any suggestions on how to get these people to back off the requirement of a "court document" before they will calculate any claimed lien? Wouldn't my argument be similar to getting the records without having to open an estate, if I show how the PR would be?

-Arizona Attorney

This has been an ongoing battle with the MSPRC because I don’t believe some representatives fully understand the law regarding “opening an estate”. Unfortunately the MSPRC does require a court document, whatever it may be, that authorizes and acknowledges the person signing the release as the personal representative. If you can get the court to sign off on a letter identifying/stating the sole heir, that might work.

This is not a new policy; it has been in effect for sometime. Medicare actually put this policy in place around 2003 or 2004, prior to that Medicare could accept a death certificate and/or will or just a letter from the attorney advising someone was the sole heir. As I understand it, the policy was put into place because lien information was given to someone who claimed to be the personal rep but wasn’t and a big who-ha followed.

Seminar Question, Made Whole Rule & ERISA Plans

Posted by Elizabeth Vish Schad

I wanted clarification on the application of the Made Whole rule to ERISA plans. Am I correct that the Made Whole rule is not applicable period to a self-funded plan? The Made Whole applies in those circuits that have adopted it as a default rule only to insured plans?

-California Attorney

The Made Whole Doctrine is applicable to both self-funded and insured plans subject to controlling laws and/or decisions. For example, if you have a self-funded plan in a circuit that has adopted the Made Whole Doctrine and the plan's language does not abrogate the doctrine as prescribed by the controlling decision and the client was NOT made whole, the MWD applies.

Monday, February 2, 2009

Nursing Home, Medicaid Lien

Posted by Matthew Garretson

I have a case where the plaintiff/decedent was allowed to wander in the hospital and ended up falling, fracturing a hip, having a heart attack and dying. The case is for survivor action and wrongful death. The plaintiff had been on Medicaid for several years. He was in a nursing home. I wrote to Medicaid about a lien and they wrote back saying that there is little if anything for this accident and thus, no lien. Can I rely on this letter? I thought with Medicaid you had to pay back even if not related to accident?

-New Jersey Attorney

It may be right and sufficient with respect to Medicaid’s lien for injury-related care, but not for Medicaid’s estate recovery claim. Medicaid liens and Medicaid estate recovery (discussed below) are different - While the Medicaid lien is the proverbial “first bite of the apple,” Medicaid estate recovery may be the last. Both must be considered when resolving personal injury or other third-party liability claims.

OBRA’ 93 mandated estate recovery (MER) at the State level for certain Medicaid benefits paid after October 1, 1999. After 1993 each state adopted its own MER program. In my state (Ohio) for instance, when a Medicaid recipient dies, Ohio Medicaid (Department of Job and Family Services) notifies the Attorney General (Office of Revenue Recovery), which sends out a notice to determine if recovery of money advanced to the recipient should be recovered from the recipient’s estate assets. The stated purpose of recovery is to reduce the taxpayer's expenditures for Medicaid help for people age 55 or older by the amount of assets owned by recipients, who do not leave a surviving spouse, minor child, or totally blind, or permanently and totally disabled child. Exceptions are made if recovery would cause an undue hardship.

The heart of the Ohio Estate Recovery Program is located within R.C. § 5111.11(B), which states in relevant part: “To the extent permitted by federal law, the Department of Job and Family Services shall institute an estate recovery program under which the department shall, except as provided in divisions (C) and (D) of this section, do both of the following:1. For the costs of Medicaid services the Medicaid program correctly paid or will pay on behalf of a permanently institutionalized individual of any age, seek adjustment or recovery from the individual's estate or on the sale of property of the individual or spouse that is subject to a lien imposed under R.C. §5111.11.1;2. For the costs of Medicaid services the Medicaid program correctly paid or will pay on behalf of an individual fifty-five years of age or older who is not a permanently institutionalized individual, seek adjustment or recovery from the individual's estate.