Medicaid Liens: Thwarting Settlements


A settled workers' compensation claim can come undone when liens are discovered after the settlement has been agreed upon. There is always much discussion about Medicare liens in workers' compensation. It should also be remembered that Medicaid can assert liens too.

Medicaid is a state administered healthcare program for individuals who meet certain criteria for eligibility. To be eligible for Medicaid in New Jersey, an individual must be a resident of the state, a US citizen or qualified alien and meet specific standards for financial income. Financial eligibility is based upon Modified Adjusted Gross Income. The specific financial income eligibility can be found at

Just like Medicare, Medicaid is a secondary payer and has the right to seek reimbursement for medical expenses related to a workers' compensation claim. It is very possible for an individual to be receiving Medicaid and Medicare benefits.

Typically, a claim petition is filed with the Division of Workers' Compensation and the injured worker either acknowledges or denies being entitled to Medicaid benefits. If he or she acknowledges being eligible for Medicaid benefits and the claim is denied, a request should be made to the worker's attorney for a Medicaid lien search to be conducted. A request should be made even if the claim was accepted, if there was unauthorized treatment.

Many settlements have unraveled when the injured workers' consent to the settlement is being placed upon the record and the workers acknowledge receiving Medicaid benefits. In order to avoid this issue and prolonging an already settled claim, careful attention should be given to whether an injured worker would be eligible for Medicaid benefits.

While Medicare and Medicaid are both secondary payers entitled to reimbursement, there are differences. The insurance carrier is not required to report a claim to Medicaid whereas with Medicare they must report under Section 111. Additionally, there is no requirement that the insurance carrier obtain the Medicaid lien. Typically this is a search conducted by the injured worker's attorney. As the burden lies on the injured worker to obtain the Medicaid lien, when a file comes across our desk which notes the injured worker is Medicaid eligible we contact his or her attorney and request a Medicaid search be conducted. This can prevent undue delay in settlements.

Just like Medicare, Medicaid has the ability to bring a settlement to a screeching halt when the parties are unaware of Medicaid's lien. On a positive note, Medicaid might provide responses regarding a lien quicker than Medicare.

For more information please contact Vanessa Mendelewski at 973.854.1061 or

Disclaimer: The contents of this post are for informational purposes only, are not legal advice and do not create an attorney-client relationship.



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