Effective June 24, 2013, Maryland made changes to its Medical Assistance (“MA”) lien recovery regulations that set forth the manner in which the amount of the lien will be reduced in medical malpractice and other personal injury claims for attorney’s fees incurred by the MA recipient. Prior to the change, Maryland Medical Assistance would demand full reimbursement of the amount of its lien for medical payments made on behalf of MA recipients that were related to the medical malpractice/personal injury claim, which often led to major hardship for MA recipients. In fact, under prior Maryland law, only if the MA recipient could prove “substantial hardship,” which was undefined and difficult to prove, would the MA lien be reduced or waived.
The Maryland regulations with regard to Medical Assistance specify that: A. The Department [the Maryland Department of Health and Mental Hygiene] may not pay medical claims that are payable by a third party. B. The Department is assigned any and all rights to payments by any third party that result from medical care received by the recipient, together with the rights of any other individuals eligible for [Medical Assistance] Program benefits for whom the recipient can make assignment. This assignment shall be effective to the extent of the amount of medical assistance actually paid by the Program. C. If a recipient has a cause of action against a third party, including a claim under Insurance Article, §19-509 or 19-510, Annotated Code of Maryland, the Department shall be subrogated to that cause of action to the extent of any payments made by the Department on behalf of the recipient that result from the occurrence that gave rise to the cause of action. D. The Department’s subrogation claim shall be limited to that portion of the claim that represents compensation for the medical expenses paid by the Program until the date of an award, settlement or judgment.
The regulations provide that the Department is entitled to recover the lesser of the full amount of past medical costs paid by Medical Assistance or 50% of the judgment, award or settlement less attorney fees, litigation costs, and other deductions required by law.
The new Maryland regulation (COMAR 10.09.83.02) requires that the MA lien “shall be reduced by one-third of the amount of the attorney’s fees incurred by the recipient in bringing the case, unless the Department files a petition to intervene in a case in which it has a subrogation interest, is independently represented by counsel and has been provided the notice required by §E(3) of this regulation.”
The Department is required to provide the recipient written notice of the amount of the subrogation claim it proposes to recover and of the recipient’s right to request a fair hearing to present evidence of a different allocation of medical expenses. If the recipient files a request for a hearing, the recipient shall bear the burden of proof. Unless the recipient files a timely request for a hearing within 30 days of receipt of the written notice, the Department shall recover the amount of the subrogation claim set forth in the written notice to the recipient.
As to the allocation of medical expenses from an award or settlement, the Maryland regulations require that (1) A recipient may not agree, in settlement of the recipient’s cause of action, to an allocation of medical expenses less than the amounts set forth in §F of this regulation, without prior approval of the Department. (2) If an action decided by the court does not determine the allocation of medical expenses in such action, the allocation shall be determined in accordance with §F of this regulation. (3) Provided that the Department is provided at least 10 days advance written notice of any hearing at which the allocation of medical expenses shall be heard, the Department shall defer to the court’s determination of the allocation of medical expenses.
If you or a loved one may be the victim of medical malpractice in Maryland, you should promptly contact a Maryland medical malpractice attorney who may investigate your possible malpractice claim for you and file a claim on your behalf, if appropriate.
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