You may have the occasion to represent an injured party who is on Medicaid. Representing such a client presents a host of problems because some providers won’t accept Medicaid. Those providers who do accept Medicaid know that they are probably going to be low-balled in terms of payment. In addition it is unfortunate but the simple fact is that the quality of care to some extent bears a direct relationship to the money paid to the provider.
If you represent a Medicaid client, there is a checklist of things that you should probably be aware of in terms of not only protecting yourself but eventually also discovering what the Medicaid lien is. It becomes difficult if not impossible sometimes to settle a case without knowing the precise amount of that lien. You should assume that the lien attaches to both liability coverage and Med Pay coverage, since the Attorney General’s Office does.
There are several stages in terms of dealing with Medicaid and the client:
Personal Injury Medicaid Liens-Pre-planning
- Ask client if they have Medicaid
- Get a copy of the Medicaid card (or number)
- Instruct (in writing) medical providers to bill Medicaid (provide a copy of the Medicaid card or number)
- Get a copy of the medical provider bills and see if Medicaid paid any
- Get a payment breakdown so you can estimate the amount of the lien.
New Statute Effective January 1, 2025 Found at Va. Code § 8.01-66.9:2
On January 1, 2025, a new law went into effect that gives the Medicaid recipient some enhanced rights. If Medicaid has not given you the lien amount in the first 60-day period, then over the next 45-day period, if you have a meritorious reason to offer less than the total amount of the lien, you may do so. You must provide a detailed itemization and explanation as to why Medicaid should reduce the lien. This 45-day period is not an opportunity simply to pay “gotcha” with DMAS.
Even with this statute, the overall process for obtaining significant reductions remains the same. First you must obtain the lien. Secondly you must write to DMAS proposing a compromise and they will forward it on to the Attorney General’s office. Next you negotiate with the Attorney General’s office. If those negotiations fail, then you can file a petition with the Circuit Court to determine the lien amount.
If you made a request for the lien prior to January 1, 2025, it should be renewed after that date. The new statute probably applies to losses that occurred prior to January 1, 2025.
Under the case of Farah v. Commonwealth, 300 Va. 458 (2022), DMAS has to reduce its lien to a proportional share of the settlement compared to the other damages that the plaintiff suffered. For instance, if the settlement was $100,000, total medicals were $100,000, the DMAS lien is $20,000 and the plaintiff’s pain and suffering is worth $1 Million, then the DMAS lien might appropriately be reduced to something in the range of $4,000. This needs to be coordinated with the language from Va. Code § 8.01-66.9.
Another possibility in terms of dealing with Medicaid is that if the plaintiff is over 55, there is a possibility that the claim may be transferred to the Estate Lien Division. They may be more sympathetic.
Medicaid typically will reduce their lien to 1/3 of the total recovery. They may reduce further if the amount of the lien is disproportionate to the overall settlement. If you’re going to get them to go below 1/3, they probably will ask for the attorney to reduce the legal fees. Overall you may be better off simply filing your petition under Va. Code § 8.01-66.9 as that may give you more leverage. You may not need an expert. Testimony from the plaintiff and other witnesses as to the person’s physical limitations may suffice.
Personal Injury Medicaid Liens-Getting the Lien
There are different ways to deal with Medicaid. One way is to make a simple FOIA request. The FOIA request is going to contain much the same information that you might send to any third party liability office as set forth below. Dealing with the third party liability office is another alternative, although the likelihood of them responding anytime soon is not very great. The third party liability information letter is a form that can be obtained from Medicaid and probably is something that should be filed simultaneous with your FOIA request.
- Send a letter of representation, on letterhead, signed by attorney
- HIPAA authorization authorizing both DMAS and the OAG (Office of Attorney General)
- Recipient’s full name, SSN, date of birth
- Recipient’s Medicaid number (12 digit number)
- A copy of the front and back of the Medicaid card
- The date of accident or injury
- A description of the injuries
- An itemized list of all medical expenses for the recipient, including dates of service and medical provider
- The name of the person in our office they should communicate with, including phone, email, and mailing address
- USE TPL Request Form
- Everything must be sent to tplcasualty@dmas.virginia.gov
Personal Injury Medicaid Liens-Getting on the Portal
The Medicaid TPL portal may be used where the client has completed treatment and all bills have been paid by Medicaid. See Va. Code § 8.01-66.9:2. On the portal you can go to the Inquiries section and claim a lien and also a reduction review.
The portal indicates that you cannot make the request for the lien until all the bills have been submitted and processed. If the Medicaid payments exceed the settlement amount, then you should email the third party liability office and let them know that the payments exceed the settlement amount and they will then produce a lien.
What to do when the Lien is Wrong
- Provide the right information with your initial request
- If a charge is wrongly included, you must request it be removed
- Send the request to the analyst who processes the lien explaining why the charges should be removed.
- You must provide an explanation and documentation as appropriate.
- If a charge is missing from the line, include the dates of service and provider name.
Future Recovery
In the June 6, 2022 decision from the U.S. Supreme Court entitled Gallardo v. Marstiller, the court ruled that states can recover from the amount obtained by the plaintiff for both future medical expenses and past medical expenses. They are not limited to simply recovering from that pool of money for past medical expenses. Virginia Code § 8.01-66.9 only gives Medicaid the right to recover as to treatment for which they have paid. That same language applies at the federal level. If the federal statute is changed so as to allow recovery for future medical expenses, then the state likewise would be allowed to make a similar statutory change. In a petition to reduce the Medicaid lien, the court may consider future medical expenses.
Retroactive Recovery
Medicaid only makes retroactive payments for up to three (3) months prior to the application. If someone applied more than 3 months after incurring the bill, Medicaid won’t make any payments to the hospital.
Filing a Petition
If the above doesn’t work then you need to file a petition with the court asking for a determination of the lien and a compromise of the lien. This typically generates a quick response from the Attorney General’s office. The form is available in VTLA Hot Docs.
Such a petition would be styled as a Petition to Determine Lien Held by the Commonwealth of Virginia.
Your Petition
Within your petition, you need to itemize the attempts made to determine what the lien is through your various inquiries to the government.
You need to set forth that there has been no response from the government as to any of those inquiries.
You then need to expressly plead that pursuant to Virginia Code § 8.01-66.9 you are requesting the court to compel the government to provide its final lien amount. Also allege that because of the delay in obtaining this information, the court should reduce the lien to zero dollars.
Further, you have to allege that you have complied with Virginia Code § 2.2-514 prior to the filing of the petition.
If you do all of that, you may have some success not only determining what the lien is but also getting it reduced.
Is the Client’s Right to Governmental Benefits in Jeopardy?
Before settling a case involving a Medicaid client, you need to ask whether or not the settlement may deprive the client of future benefits. This may depend on what type of Social Security benefits they are receiving, if any. Whether they are on SSI or not, they may still have to report these funds to Medicaid. Furthermore it may be possible to use a special needs trust in order to preserve the client’s Medicaid or other governmental benefits. Therefore all of these are things that need to be considered before reaching any such settlement.
You need to also look at the type of Medicaid program the client has. Some programs are not asset-tested. Therefore having additional assets does not affect eligibility. See the blogpost on this website dealing with Social Security benefits.
Personal Injury Medicaid Cases-Attorneys’ Fees
Medicare will typically agree to an offset against their lien based upon what the attorneys’ fees are. That is, if the attorneys’ fees are 1/3, they’ll reduce their lien by 1/3. Medicaid will not do that. If your client is getting more than 1/3 of the recovery without a lien reduction, then Medicaid won’t agree to offset its lien based upon attorneys’ fees. However if the plaintiff is going to get less than 1/3 of the recovery, then Medicaid will generally agree to reduce the lien without asking the attorney to reduce their fees.
Providers Refusing to Bill Medicaid
In some instances, providers will refuse to bill Medicaid. They know they can get more money out of the personal injury settlement. In Shelton v. Emergency Coverage Corp, 2025 U.S. Dist. LEXIS 55601, the court held that under federal law and regulations, Medicaid is a secondary payor which preempts the Virginia Code § 8.01-27.5 requirement for providers to submit to Medicaid in cases where there are other sources of payment.
Where that problem arises, you need to consider the following:
- Did the client sign an assignment of benefits at the emergency room which allows the provider to go after the personal injury settlement as its means of payment.
- You need to get hold of the contract between the provider and Medicaid. That contract says that the provider will accept Medicaid payments as payments in full and not bill the individual. It probably does not require that they actually submit the bill to Medicaid but it may. DMAS in Virginia is working on this issue.
- Pursuant to the Virginia regulation found at 12 V.A.C. 30-95-10, providers must submit their bills to Medicaid within 12 months of the date of service and if they fail to do so, then their claim will be denied unless it falls within the 2 narrow exceptions.
Balance Billing
Medicaid providers are not allowed to balance bill. That is, whatever money they get from Medicaid is all they get. 42 C.F.R. § 447.15.
You also need to keep in mind that Medicaid does not cover chiropractic care.
There are several other blogs on this site dealing with different types of liens:
- Personal injury liens
- Erisa liens miscellaneous
- Erisa liens
- Medicare liens
- Other issues with Medicare
- Tricare liens
- Workers comp liens
Call or contact us for a free consult. Also for more info on Personal Injury Medicaid Cases see the Wikipedia pages.
