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Federal law requires the States to assert and collect Medicare or Medicaid liens, as a condition of future receipt of funds. See, e.g., 42 U.S.C. § 1396a; 42 C.F.R. § 433.136(3)(1980). Thus, Maryland, Virginia and the District each have enacted statutes to comply with the federal requirement. By statute, in Maryland and the District, a third-party tortfeasor who has notice of such a lien, is liable for the amount of the lien not recoverable by the government, if the funds are disposed of improperly. Virginia law appears to be unclear on that point. A. Maryland Md. Health-General Code Ann. § 15-120 provides that if a recipient of Medical or Pharmacy Assistance Programs has a cause of action against a person, the Department "shall be subrogated to that cause of action to the extent of any payments made by the Department on behalf of the Program recipient that result from the occurrence that gave rise to the cause of action." Effective for any case pending or filed after July 1, 1998, section 15-120(b) provides that an attorney representing a "program recipient" in a cause of action to which the Department has a right of subrogation shall notify the Department prior to "filing a claim, commencing an action, or negotiating a settlement." The attorney "shall" notify the Department in advance of the resolution of a cause of action and shall allow the Department three business days from receipt of the notice to establish its subrogated interest. The statute requires that any Program recipient or attorney, guardian or personal representative who receives money in settlement of or under a judgment or award in a cause of action in which the Department has a subrogation claim, shall, after receiving written notice of the subrogation claim, hold that money for the benefit of the Department to the extent required for the subrogation claim, after deducting applicable attorney fees and litigation costs. A person who, after written notice of a subrogation claim and possible liability under the statute, disposes of the money, without the written approval of the Department, is liable to the Department for any amount that, because of the disposition, is not recoverable by the Department. B. Virginia Va. St. Ann., § 8.01-66.9 establishes a lien in favor of the Commonwealth, its programs, institutions or departments on claim for personal injuries, "for the total amount due for the services, equipment or devices provided at or paid for by such hospital or center operated by the Commonwealth or such Department or institution . . . on the claim of such injured person or of his personal representative against the person, firm, or corporation who is alleged to have caused such injuries." Va. St. Ann. § 8.01-66.5 provides that this lien is not created or effective until a written notice is served on the third-party tortfeasor, or the plaintiff's counsel, or the plaintiff. However, if there is actual notice to the plaintiff's attorney that medical services were provided or paid for by the Commonwealth, such formal notice is not required. Id. C. District of Columbia D.C. Code Ann. §4-602(a) gives the District an independent, direct cause of action against a third party tortfeasor for the unreimbursed value or cost of the health care assistance provided by the District. D.C. Code Ann. § 4-602 (b) provides that as soon as the District begins providing health-care assistance to a beneficiary, it shall become subrogated to any right or claim that the beneficiary has against a third party for the care and treatment it has undertaken to provide or pay for as health-care assistance. It may also require a beneficiary to execute a written assignment of that same right or claim. The District's lien must be satisfied before the beneficiary of free medical services may receive any proceeds from a judgment. Holly v. Godette, 121 WLR 1409 (Super. Ct. 1993). Under 4-603, if the District itself is a defendant, it has a right to a set-off in the amount of its lien. D.C. Code § 4-604 gives the District a number of options in enforcing its right to reimbursement. It may permit the beneficiary to proceed on behalf of the District in prosecuting, in conjunction with his or her own claims, the District's claim; it may intervene or join in any proceeding brought by the beneficiary; it may institute and prosecute a proceeding either alone in its own or the beneficiary's name or in conjunction with the beneficiary; or it may compromise or settle and execute a release of its claim against a third party. If a "beneficiary" retains private counsel, counsel shall be responsible for giving all notices required by section 4-606. A "beneficiary" is defined as any individual who has received health-care assistance from the District, and if applicable, that individual's guardian, conservator, personal representative, estate, dependents, and survivors. Section 4-606(a) in general requires a health care provider that bills the District for services furnished to a beneficiary to give the District written notice of any known or suspected third-party liability. If either the District of the beneficiary files suit or opens settlement negotiations with a third-party tortfeasor, section 4-606(b) requires notice to be given to the other party within 20 calendar days. Section 406(c) imposes a notification obligation on a third-party tortfeasor who is aware that the District may have a claim against a judgment or settlement in favor of the beneficiary. The District is supposed to get 30 calendar days notice before such a third-party tortfeasor satisfies the balance of the judgment or settlement (other than litigation costs and reasonable attorney's fees), in order that the District can determine the appropriateness of a lien under section 4-607 and if appropriate, perfect and satisfy that lien. D.C. Code § 4-607 gives the District a lien upon any judgment or settlement awarded or executed in favor of a beneficiary against a third party for that amount of the judgment or settlement that represents the care and treatment it has undertaken to provide or pay for as health-care assistance. To perfect such a lien, the Mayor, before payment of any part of a judgment or settlement is made to the beneficiary, shall record a written notice of the lien in the Office of the Recorder of Deeds, and send copies of the written notice of lien together with a statement of the date of filing to the beneficiary, the third party, and any insurer of the third-party tortfeasor. After such a lien is perfected, if the District is not paid out of a judgment or settlement, the beneficiary, third party or insurer shall, for a period of 1 year from the date the funds were improperly disposed of, be liable to the District for any amount that, because of the disposition, it is unable to recover. §4-607(e). For further information, see the Center for Medicare and Medicaid Services Coordination of Benefits website. Additional references: 42 U.S.C. sec. 1395y(b)(2)(B)(ii); 42 U.S.C. sec. 1396k(a)(2); 42 U.S.C. sec. 1396k(a)(1)(A); 42 U.S.C. sec. 1396k(b); 42 C.F.R. sec. 411.37.
(Please see our disclaimer with regard to this article. As the law constantly changes, you should consult with a qualified attorney in your home state before taking any action with regard to this subject.) |
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