Are you wondering about Medicare and Can Medi-Cal liens be reduced? Navigating healthcare coverage and financial responsibilities can be daunting, but it’s essential to understand your options. Medicare provides crucial health benefits for seniors and certain individuals with disabilities, covering a wide array of medical services. Meanwhile, Medi-Cal often imposes liens on assets to recover costs for medical care provided. While these liens are generally enforceable, there are avenues to potentially reduce them through legal processes or negotiations. Seeking guidance from experts can help you navigate these complexities effectively, ensuring you make informed decisions about your healthcare and financial future.

What is Medicare?

Congress established Medicare in 1965 as a federal health insurance programme. It covers persons aged 65 and up, as well as people younger than 65 with specific disabilities and people of any age with irreversible renal failure. While it provides minimal coverage for medical bills, it does not cover all medical expenses or the price of most long-term care. Medicare is administered by the Centers for Medicare and Medicaid Services (CMS). Social Security offices, on the other hand, genuinely enroll candidates in the programme and provide you with detailed information about it.

Can Medi-Cal Liens Be Reduced?

Once the defendant’s liability insurance is discovered in a personal injury case, both Medicare and Medi-Cal should be notified of the claim, regardless of whether the plaintiff is a beneficiary. The settlement process will be accelerated if both programmes send a letter declaring that the plaintiff is not a beneficiary. Online reporting is available for both Medicare and Medi-Cal, but it’s probably advisable to retain a paper trail by mailing letters.

When a third-party tortfeasor is accountable for the Medi-Cal beneficiary’s injuries, Medi-Cal is required to recover the payments provided. Unlike Medicare, Medi-Cal has limits on how much it can recover in a third-party liability action.  

Medi-Cal 25% Rule

If the injured person hires an attorney to resolve the claim, the California Department of Health Care Services’ Medi-Cal reimbursement claim will be lowered by 25% under the so-called “25 percent Rule.” This reduction is for Medi- Cal’s share pro rata part of the costs and attorneys’ fees.   

Medi-Cal 50% Rule  

Medi-Cal cannot recover more than the injured person.  California Welfare and Institutions Code section 14124.78 specifies that the so-called “% Rule” must be followed: “[I]n no event shall [the California Department of Health Care Services] recover more than the beneficiary recovers after deducting, from the settlement, judgment, or award, attorneys’ fees and litigation costs.” If the % Rule applies to a personal injury lawsuit, the 25 percent Rule is not available to the beneficiary.  

Furthermore, the Supreme Court of the United States has determined that the State can only recover its Medicaid lien from damages in the settlement that constitute compensation for past medical expenses. DHCS shall be given an itemized list of the attorneys’ fees and costs whenever a settlement has been achieved. A written Request for Statutory Reduction should also be submitted to DHCS.

In addition to the 50% rule, DHCS is entitled to compromise, settle, or dismiss its claim in whole or in part if collecting the claim would cause undue hardship to the injured plaintiff under California Welfare and Institutions Code § 1412.4.71(b).  A statutory reduction as well as a compromise, waiver, or discharge of the claim owing to hardship should be requested by the plaintiff’s attorney. Obtaining full or partial waivers may be the plaintiff’s only chance for recovering any compensation for their injuries, particularly in circumstances when there are several liens with Medi-Cal and Medicare.

Our attorneys can assist you if you would want to understand more about your Medicare alternatives and related health-care coverage difficulties.