California Personal Injury Lawyer Assisting with Paying Back Medicaid After Settlement

When you sustain a personal injury because of another party’s negligence, you will likely need medical treatment and will have ongoing healthcare needs related to the injury. For residents of Northern California who rely on Medicaid (or Medi-Cal, in California) for healthcare, you can continue to anticipate that your injury-related treatment will be covered. In other words, you will not be responsible for paying the upfront costs associated with your recovery.
paying back medicaid after settlement

However, assuming you file a personal injury lawsuit against the responsible party and win, then you might have heard that Medicaid can try to take your damages award in order to recoup what it has already paid for your medical treatment. This is true in part, but you should not anticipate that all of your settlement or your damages award will go back to Medicaid. We will explain more about paying back Medicaid after a settlement, but in the meantime, if you have questions about filing a personal injury lawsuit or retaining your settlement, an experienced Oakland personal injury lawyer can help.

Can Medicaid Take My Entire Personal Injury Settlement?

No, at least if you are on Medi-Cal—the California version of Medicaid—they cannot take your entire recovery. The law in California is that the most Medi-Cal can take out of your recovery is 50% of your net.

So to give an example, let’s say you’re in an accident where the other person has $100,000 worth of insurance, and I recover that $100,000 for you, and let’s say that Medi-Cal paid $400,000 for your treatment. Medi-Cal is not going to take your entire $100,000. Under the California formula, if your lawyer takes a third, Medi-Cal will take half of the remainder, so that you get $33,000, Medi-Cal gets $33,000 and your lawyer charges $33,000.

How Does Medicaid’s Recovery Process Work?

When it comes to Medicaid claims in California, the California Department of Health Care Services has what is called a “Personal Injury (PI) Program.” The program’s mission is to “recover funds to replenish the Medi-Cal program so it can continue to provide health coverage for members while serving its clients with integrity and efficiency.” More specifically, the goal of the program is to “identify and recover funds Medi-Cal paid on behalf of members in personal injury actions such as: auto liability, premises liability, and other tort liability actions.”

In other words, the aim of the program is to recover at least a portion of what has been paid for a California resident who receives Medicaid benefits. How does the PI Program do it? In short, it places a lien on the injured party’s recovery. This means that Medi-Cal has ownership rights over a portion of the recovery even before the injured plaintiff receives any money.

How Does Medi-Cal Know I Received a Settlement?

You might be wondering: how does Medi-Cal even know that I received a settlement or a damages award in a personal injury lawsuit? If you received Medicaid benefits to help you recover from your personal injury, you are required by law to report your personal injury claim, in writing, to the California Department of Health Care Services (DHCS). To be clear, the California Welfare and Institutions Code Section 14124.70 requires you to disclose that you are filing a personal injury claim in an attempt to recover financial compensation for your losses.

Then, once you reach a settlement or obtain an award, you will be required to settle up with Medi-Cal based on the lien. Notifying DHCS about a personal injury lawsuit related to prior or ongoing Medi-Cal payments is a condition of Medi-Cal eligibility. If you do not notify DHCS, it can then take legal action against you.

Seek Advice from a California Personal Injury Attorney

In some cases, you may be able to obtain a reduction of a lien. An experienced Fresno personal injury attorney can help with your situation. Contact GJEL Accident Attorneys today.

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Andy Gillin received his Bachelor’s Degree from the University of California at Berkeley and his law degree from the University of Chicago. He is the managing partner of GJEL Accident Attorneys and has written and lectured in the field of plaintiffs’ personal injury law for numerous organizations. Andy is a highly recognized wrongful death lawyer in California.