Legal practitioners are well versed in the difficulties of resolving a lawsuit. One source of frustration in particular is the administrative burden of satisfying both governmental and private liens. In personal injury lawsuits, plaintiffs attorneys routinely deal with the problematic task of resolving Medicaid liens for their clients. Plaintiffs and government agencies regularly dispute what portion of a third-party liability settlement or award the state should receive when the state asserts its lien. Within the last 10 years, state courts and the U.S. Supreme Court have issued clarifying opinions to ensure that the government can only be reimbursed from the portion of a settlement or award that is attributable to past medical expenses. Unfortunately, in December 2013, Congress made an unanticipated change to states’ rights regarding Medicaid lien reimbursements when it passed the Bipartisan Budget Act of 2013. Once the bill goes into effect, the government will be able to recoup a much larger portion of its Medicaid liens, substantially broadening states’ recovery rights. This change was made to save the government money by taking money out of Medicaid beneficiaries’ pockets. While this may be a dream for the government, it could turn into a nightmare for victims.

Fortunately for current plaintiffs and those who plan to file a personal injury lawsuit, Congress has passed a new bill that will delay the effective date of this change for two years, until 2016. Nonetheless, this dramatic change to the basis upon which a Medicaid lien can be recouped by the government still looms large on the horizon.

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