How Much Will Medicaid Take from My Settlement?

Wednesday, May 29, 2024

How Much Will Medicaid Take from My Settlement?

Written by Malman Law, reviewed by Steve J. Malman.

It can take several months or years to receive a settlement amount when seeking compensation from an at-fault party. While pursuing an insurance claim or lawsuit, you may incur medical bills for treatment.

Consequently, injured victims might rely on Medicaid coverage to pay these bills. How much Medicaid will take from your settlement for reimbursement depends on the facts of your case, the state’s rules, and the type of settlement you receive. While it may sound complicated, there are ways to determine Medicaid’s share.

A trusted personal injury attorney in Chicago can provide legal advice on Medicaid’s share and ways to maximize your settlement amount.

How Much of Your Personal Injury Settlement Can Medicaid Take?

Medicaid determines its share of your personal injury settlement depending on the amount spent on medical care related to the injury. Suppose a slip-and-fall victim incurred a medical bill of $10,000 but received a personal injury settlement worth $50,000.

In that case, Medicaid can deduct $10,000 from the settlement value to recover the money the patient spent on medical care during recovery.

The exact value of the medical lien can vary based on state rules and other factors. The Illinois Health Care Services Lien Act allows a maximum of 40% liens, meaning a healthcare provider or professional cannot take an amount that exceeds 40 percent from the settlement award.

Similarly, no individual claimant can execute a claim larger than one-third of the settlement award. If the liens to a single settlement award exceed 40%, no single party can claim a lien greater than 20% of the settlement award.

In other instances, healthcare providers and professionals bill their services under a single entity. In such a case, state law encourages a reasonable allocation of their fees and the separation of the liens.

That said, a healthcare institution and a provider can file a separate lien when necessary.

Why Can Medicaid Take Money from My Injury Settlement?

Illinois state law allows healthcare providers and professionals to care for and treat injured victims, except in workers’ compensation cases, where they can hold liens against an injured person’s pending claim.

A medical lien, sometimes called a hospital lien, is an agreement between a doctor or a healthcare provider and the patient. It is a legally binding contract that allows a healthcare provider or a physician to offer treatment services without requiring money upfront.

The purpose of liens, including Medicaid, is to ensure that a patient with no other means to pay for healthcare receives timely treatment services while undergoing the steps of a personal injury case.

When the patient receives a settlement or jury award at the end of a personal injury case, the medical care provider exercises the power of lien to recover the cost of care they offered.

Understanding Medicaid Laws

When an injured person receives a personal injury settlement, they must provide a written statement to a healthcare provider or professional who may hold a valid lien against the judgment or award.

For a Medicaid lien to be valid, it must include the following information in the contract:

  • A statement that describes the nature and extent of the victim’s injuries
  • A statement with details of the nature and extent of medical care provided to the patient
  • A written statement regarding how the injury occurred, including healthcare records.

Your eligibility for Medicaid benefits can become compromised if your financial status changes after receiving a personal injury settlement.

The Formula for What the State Department Can Take

If the government kicks in to help pay your bills as you wait for the personal injury settlement, Medicaid has a right of lien over your judgment or award. The money they can recover varies based on individual programs and your needs.

However, it is possible for a lienholder to accept a lower amount than the initial claim. Your personal injury attorney can negotiate for a reduction of the lien amount. For instance, an attorney can evaluate all the charges in the claim to ensure they’re reasonable.

For an attorney to negotiate successfully with Medicaid, they often gather necessary documentation and evidence to support the case. Proving a reduced medical lien requires tabling various records, including medical bills, expert opinions, and specialist reports.

Paying Back Medicare After Settlement

Medicare uses a more standardized and regulated approach to recovering medical costs from a personal injury settlement, termed ‘’Medicare Conditional Payment Recovery’’. The process gives Medicare a special right of reimbursement directly from settlement funds.

A personal injury attorney with hands-on experience in Medicaid and Medicare can provide valuable expertise and legal advice throughout the settlement process. They can also negotiate with Medicaid to minimize the reimbursement amounts, ensure legal compliance, and protect your interests.

Get in Touch With an Experienced Personal Injury Attorney

The prospect of recovering from an injury depends on the value of your settlement amount. While a health provider has a right of payment over your settlement amount, it should not be at your expense. As such, you deserve representation from an experienced attorney who’ll protect your interest during settlement talks. Malman Law Chicago personal injury lawyers have decades of experience representing injured victims. Contact us for a free case review.

Steve Malman

Malman Law’s founder Attorney Steven Malman has over 30 years of experience handling personal injury, nursing home, medical malpractice, truck accidents, car accidents, premises liability, construction, and workers’ compensation cases in Chicago, IL.

Years of experience: +30 years
Justia Profile: Steve Malman
Illinois Registration Status: Active and authorized to practice law—Last Registered Year: 2024

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This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. This page was approved by President and Founder, Steven J. Malman who has more than 20 years of legal experience as a personal injury attorney.

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