Question: I have 2 questions for you about Medicaid. I have tried researching and have come up empty handed. Question 1: Medicaid. Do we have a duty to notify Medicaid of a potential lien in an asbestos case in Michigan? Is there a pre 1980 rule like in Medicare? I could use authority for this? Question 2: IRS. If we believe a client has an IRS lien, do we have a duty to notify the IRS? This lien is more than 10 years old, and there does not appear to be a judgment, but we want to cover ourselves. Thanks so much for your time.
Michigan Attorney
Answer: With respect to Medicaid, there is no pre-1980 rule as “1980” is relevant to the year in which the Medicare Secondary Payer statute was passed. With respect to Medicaid, the rules concerning “notice” are all governed by the state Medicaid statute. Many of those state statutes have been changed in the recent years (after Ahlborn) to require affirmative notice to the state when settlement occurs.
To answer your question, I’ve compiled the following summary:
MCLA §400.106(4) (eff. 11/24/04) places an affirmative duty on a Medicaid beneficiary and/or his/her representative (counsel) to notify the MI Dept of Community Health and Casualty Unit (Medicaid tort recovery unit) anytime a settlement is pending for which injury-related medical expenses were paid for by Medicaid. (See below)
M.C.L.A. 400.106
Michigan Compiled Laws Annotated Currentness
Chapter 400. Social Services
The Social Welfare Act (Refs & Annos)
County Department of Social Services
400.106. Medically indigent individual defined; other definitions; actions wherein state department and/or Medicaid contracted health plan have right to recover expenses, notice, settlements, priority for recovery against proceedsSec. 106. (1) A medically indigent individual is defined as:
(3) An individual receiving medical assistance under this act or his or her legal counsel shall notify the state department when filing an action in which the state department may have a right to recover expenses paid under this act. If the individual is enrolled in a Medicaid contracted health plan, the individual or his or her legal counsel shall provide notice to the Medicaid contracted health plan in addition to providing notice to the state department.
(4) If a legal action in which the state department, a Medicaid contracted health plan, or both has a right to recover expenses paid under this act is filed and settled after November 29, 2004 without notice to the state department or the Medicaid contracted health plan, the state department or the Medicaid contracted health plan may file a legal action against the individual or his or her legal counsel, or both, to recover expenses paid under this act. The attorney general shall recover any cost or attorney fees associated with a recovery under this subsection.
(5) The state department has first priority against the proceeds of the net recovery from the settlement or judgment in an action settled in which notice has been provided under subsection (3). A Medicaid contracted health plan has priority immediately after the state department in an action settled in which notice has been provided under subsection (3). The state department and a Medicaid contracted health plan shall recover the full cost of expenses paid under this act unless the state department or the Medicaid contracted health plan agrees to accept an amount less than the full amount. If the individual would recover less against the proceeds of the net recovery than the expenses paid under this act, the state department or Medicaid contracted health plan, and the individual shall share equally in the proceeds of the net recovery. As used in this subsection, “net recovery” means the total settlement or judgment less the costs and fees incurred by or on behalf of the individual who obtains the settlement or judgment.
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