This article is the first in a series of posts pertaining to the subrogation interests and rights of recovery that are held by various sources of health insurance coverage. That means that if your health insurance paid some or all of your medical bills after an accident, the carrier is probably entitled to some (or in some cases, all) of your recovery. How much depends on the circumstances and the type of carrier you're dealing with.
I'm not sure yet how many articles this series will entail, nor how long it will take me to write them. I've already delved into ERISA plans, and there are several other types of plans left to go over. My thinking is that if you're handling your own claim, you'll need this information, and I want you to know exactly where to find it when the time comes. With that being said, I want to stress, as strongly as possible, that if you get in over your head with this stuff, you need to go talk to an experienced attorney. Please, please, please don't mess up your claim, especially when it comes to subrogation. The consequences can be dire.
Alright Medicaid, let's dance.
Let's start with what Medicaid is, and (just as importantly) what it isn't. Medicaid is a public program, jointly funded by your State and Federal governments, and it was established in 1965 under the supervision of Lyndon Johnson's White House. The Program is designed to provide coverage to low-income individuals, as well as families who can't afford the ever-increasing costs of healthcare. Services covered under Medicaid are wide-ranging, and can include everything from medical bills to vision care, and even home health services. It should go without saying that Medicaid is a critically important program that saves a lot of lives.
Now, for what the Program isn't. First, Medicaid isn't the same thing as Medicare, in ways that will become clear later on. Like Medicare, however, Medicaid is what we call a "secondary payer" Program, meaning that it isn't going to pay for healthcare until all other forms of coverage have been exhausted. Medicaid isn't going to let you off the hook when you recover a settlement for injuries and treatment that the Program has covered. The Program has a subrogation interest in your recovery, and they can make your life a waking nightmare if they don't get what they're owed. Lastly, Medicaid isn't super generous. Remember how most health insurance carriers pay at a steep discount? Well, Medicaid generally gets the steepest discount of all the carriers, paying anywhere between 16 and 20 percent of the actual billed amount. Under North Carolina's Billed-versus-Paid rule, that means that you'll probably see your damages take a steep nosedive once Medicaid steps in to pay your medical bills.
Okay, so where does this subrogation interest come from?
Medicaid's subrogation interest is established by N.C. General Statutes §108A-57 and -59. These statutes, taken together, basically provide that Medicaid has a right to repayment when an injured party receives any third-party recovery (settlement, judgment, etc.) deriving from a third-party source (like liability coverage) or a first-party source (like UM/UIM or Medpay). This is true to the extent that Medicaid has paid for medical treatment related to the accident or injury.
Section 57 applies to third-party recovery where the injured recipient is compensated based on some theory of liability, like negligence. There's no admission of liability required - if a Medicaid recipient gets hurt and later recovers for the injury, Medicaid is automatically entitled to recover whatever they've paid for the related treatment.
Section 59 applies to first-party recovery, or any time that the recipient is getting a "benefit," of sorts, to which the recipient is entitled by a contractual agreement. This is a fancy way of saying that because an insurance policy constitutes a contract, and because that contract is required by North Carolina law to include the provision of UM and UIM coverage, Medicaid is also entitled to recover from a recipient's uninsured, uninsured, or even medical payments coverage. This applied regardless of fault and liability, and it's a prerequisite to receiving Medicaid in the first place. If you are a Medicaid recipient, then you've already assigned that right of recovery over to the Program.
What about other types of recovery?
We've established that Section 57 allows Medicaid to subrogate against your third-party liability recovery, and that Section 59 allows the Program to subrogate against your UM, UIM, and Medpay recovery. But there are other sources of coverage out there that could slip through the cracks, right?
Well, not so much. If you look, for instance, at Worker's Compensation Insurance recovery, it may seem like a great opportunity for a loophole. Alas, however, there isn't one there. Section 57 explicitly permits Medicaid to subrogate against WC recovery.
Same for Wrongful Death recovery, as well. N.C. General Statute §28A-18, the Wrongful Death statute, asserts that medical providers that have treated a patient who later dies can only recover a capped amount of $4,500.00 from a wrongful death settlement. However, case law dictates that this cap does not apply to Medicaid; the Program is still subject to the general limits that we'll talk about on Friday, but it is not subject to the statutory cap provided by §28A-18.
Woof. So basically, there's no way around Medicaid's subrogation rights.
It's true that Medicaid has a long arm when it comes to its subrogation interests. But there are some tools left to recipients of the Program to try and mitigate the amount that the Program can recover. Stay tuned for Part 2 on Friday!