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How Much Must I Reimburse Medicaid From My Accident Claim?

Coping with the aftermath of a serious injury presents an endless stream of challenges. Individuals who received Medicaid payments to cover treatment may face an additional hurdle: the obligation to repay those funds. Understanding North Carolina’s Medicaid rules can help avoid nasty surprises and keep you on the right side of the law.

Medicaid Lien Basics

The U.S. Congress approved the Medicaid program more than a half-century ago to extend adequate medical care to citizens with limited means. While the federal government provides the funds, states handle all of the program’s administration tasks. In North Carolina, this mission falls to the state’s Department of Health and Human Services.

When Medicaid covers injury treatment, a lien attaches to each dollar from the moment of the first expenditure. A lien means that if you receive a settlement payment — with or without taking legal action — you have a legal obligation to reimburse the Medicaid program.

The One-Third Rule

While North Carolina law requires reimbursement, the law also limits the amount you must pay. Medicaid can claim no more than one-third of the settlement proceeds you receive. If you worked with an attorney, the one-third limit applies to the funds remaining after your attorney fees, not the larger total settlement figure.

Is there any way to reduce the required Medicaid lien payment? Thanks to a 2013 state law, the answer is a qualified “Yes.” While the statute allows the NCDHHS to negotiate lien reductions, the law in no way compels this action. The time for this negotiation is when the broad outlines of a settlement agreement take form.

The most persuasive argument for a lien reduction is the need for long-term and expensive medical treatment. Marshaling the evidence for a Medicaid lien reduction does not work for amateurs, especially laypersons who may still face recovery and rehabilitation hurdles. Lien reduction negotiations are one of several compelling reasons to seek the assistance of an experienced personal injury attorney.

Deadlines and Penalties

You have 30 days from the date of your settlement or judgment to repay Medicaid. The law does not require the NCDHHS to send a notification, the responsibility instead falls on you. Failure to meet this obligation is a Class 1 misdemeanor under North Carolina law. While a jail sentence of up to 120 days is possible, a stiff fine is more likely. With a Class 1 infraction, the court may decide on how high your fine may go, a powerful incentive to make a timely payment.

Effective Representation for Durham Area Residents

If you or a loved one now copes with an injury owing to another party’s negligence, the law firm of Mills & Mahoney, P.A., stands ready to help. Call us at (919) 683-2135 or contact us online for a case evaluation.