Medicaid Systems Able to Pursue Full Settlement Amounts on Oct. 1

As the result of a federal law effective October 1, state Medicaid systems will likely intensify their efforts to collect money they’re owed from workers’ compensation settlements. 

As of now, per the ruling in Arkansas Department of Human Services v. Ahlborn, Medicaid can only try to collect the portion of a workers’ comp. settlement that represents payment for past medical expenses. However, a provision in the federal Bipartisan Budget Act of 2013 rescinds that ruling, and allows states to recover Medicaid costs from the full amount of a settlement. This provision is scheduled to go into effect on October 1 of this year, but the Medicare Advocacy Recovery Coalition (MARC) is working with lawmakers to postpone its effective date. The current extension is included in Section 220 of MACRA, the Medicare Access and CHIP Reauthorization Act.

Many state Medicaid systems are strapped for cash, and are making strides to avoid paying for medical treatment that others are responsible for. Should the provision take effect, it’s likely that Medicaid systems will start aggressively pursuing full settlement amounts, which could significantly impact workers’ compensation claims.