How to Petition Medicaid for a Lien Reduction in North Carolina

When you receive a settlement or tort judgment, that settlement or judgment must pay not only attorney’s fees, but also medical liens. Often, this means that health insurance companies get part of the pie. If you are a Medicaid beneficiary, Medicaid may have paid for your medical care. N.C.G.S. §108A-57 outlines Medicaid’s subrogation rights and lien amounts.

N.C.G.S. §108A-57 places presumptive limitations on Medicaid’s recovery to either one-third of the gross recovery amount or 100% of the payments made by Medicaid, whichever is less. This statute also gives Medicaid recipients the ability to seek a reduction of these presumed lien amounts by judicial hearing.

Judicial Determination of a Medicaid Lien

An attorney may apply to a court for a lien reduction below the presumptive statutory reductions, according to N.C.G.S. §108A-57(a2) if they believe that the presumptive reductions in Medicaid’s lien result in Medicaid getting part of the beneficiary’s gross recovery that does not represent compensation for the Medicaid claim.

When do you have to decide to file a petition?

There is a 30-day deadline from the execution of a settlement, court approval of a settlement, or entry of judgement for a timely filing.

What is a Hearing on an Allocation Reduction Petition?

N.C.G.S. §108A-57 calls for “an evidentiary hearing” regarding the allocation reduction petition. These follow a “motions hearing” format, where the lawyers make arguments and produce documents for the judge’s consideration.

The Attorney General’s office asserts that under the label “evidentiary hearing” the AG reserves the right to call witnesses and take depositions of any experts the Medicaid beneficiary may rely upon in their petition hearing.

Who has the Burden of Proof?

N.C.G.S. §108A-57(a2)(1) states that the Medicaid beneficiary has the burden of proving by clear and convincing evidence that the portion of the beneficiary’s gross recovery that represents compensation for the Medicaid claims is less than the portion presumed under subsection (a1).

What Factors do Courts Consider?

N.C.G.S. §108A-57(a2)(2) and (3) indicate that attorneys cannot meet their burden just by presenting evidence that the settlement is insufficient to make the claimant whole.

Some factors that a court may consider are:

1. The total amount of the settlement.

2. The theoretical total value of the claim.

3. The amount of the claimed Medicaid lien.

4. The amount of medical bills and costs not paid by Medicaid.

5. The claimant’s future medical bills due to the at-fault-party’s negligence.

6. The likelihood that the defendant can satisfy a judgement more than the available insurance policy limits.

7. The likelihood of success of the claim if it had to be litigated to a judgment.

8. Any available defenses.

9. The costs of the litigation and any predicted future costs if the matter were to go to trial.

10. Pro-rata payments due to “claims of all others having medical subrogation rights or medical liens against the amount received or recovered.”

11. Any other factors that the court deems just and reasonable.

Additionally, the attorney arguing for a reduction in the Medicaid lien will need to present to the court a proposed formula or basis for the reduction.

If the claimant fails to rebut the presumptive payments set out in N.C.G.S. §108A-57(a1) then the presumptive payments will apply.

Do you need help with a Personal Injury?