Reimbursing Medicaid Out of Settlement Funds

On August 22, 2019, the Utah Supreme Court issued an important decision about reimbursing Medicaid out of settlement funds. In the case, a gentleman named Mr. Latham sued a hospital for malpractice because the hospital failed to properly test for and diagnose the gentleman’s stroke, causing further, permanent brain injury. The gentleman’s claim was worth over $7 million but he settled for about $700,000. Medicaid paid about $100,000 in past medical bills, and the gentleman expected about $600,000 in future medical bills. Medicaid asserted it could recoup (or put a lien on) both the past and future medical payments, which would eat up virtually all of the settlement funds; but the settlement funds were meant to compensate the gentlemen for pain and suffering and lost wages–not just for past and future medical bills.
The Utah Supreme Court ruled that Medicaid (the Office of Recovery Services or ORS) could only recoup what Medicaid had already paid in past medical bills–nothing else.
This is a great benefit for Clients who have been injured in car accidents or in industrial accidents at work. This decision gives us clarity because we can fairly easily determine the past medical bills while future medical costs are difficult to determine. In short, this ruling means the injured Medicaid recipient will be able to keep a larger portion of the settlement funds and still get future treatment from Medicaid.
At Tim Daniels Law Services, we handle these types of issues on behalf of our clients. Our goal is to get Medicaid (and Medicare) issues resolved so we and our Clients can have peaceful resolution of the case. If you have any questions, you may reach Attorney Tim Daniels at (435) 592-1235.

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