Overview of new law relating to Ahlborn

Elder law attorney and Medicaid law guru Julian Zweber  sent along this brief summary of  section 202 of the Bipartisan Budget Act of 2013.  This provision of the budget bill addresses states’ ability to recover Medicaid costs from PI settlements.  Here’s his take on the new law:

I’ve reviewed the recent amendments that appear to affect the Ahlborn case and conclude that the Ahlborn is still good law but more MA expenses may now be recovered under the assignment of claims against third parties.   I conclude:

    1.  The changes are mandatory on the states.  See the emphasized language in 1396k(a).  The state plan “shall” rather than “may.”
    2.  The amendments do not change the nature of the assignment of benefits.  See the amendment to 1396k(a)(1)(A).  The Ahlborn court focused on the nature of an assignment as opposed to a subrogation claim.  A recipient of MA continues to assign his or her rights to MA for recovery from liable third parties for expenses paid by MA.
    3.  The state’s right to recovery is expanded from just medical expenses paid by MA, to all expenses paid by MA under the State Plan.  This would include non-medial expenses such as benefits provided under home- and community-based services.
    4.  The expansion of allowable expenses subject to assignment and recovery is the only change made by these amendments.
    5.  An apportionment of any settlement that provides less than full recovery of all damages would still be required to determine which part of the settlement is attributable to claims subject to MA assignment.  To the extent that the MA part of the  settlement pie becomes bigger, the injured party will receive less from the settlement, but the MA claim does not have to be paid in full before the plaintiff recovers.  Ahlborn is not overturned.

Download the text of the legislation.

Thank you, Julian!