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As we have noted in the past, “getting the money and keeping the money” are two different and equally difficult issues in personal injury matters. In many cases, there are liens on recoveries, such as when Medicaid pays all or part of a person’s bills.

One issue that often arises is the extent to which a third-party can assert a lien. In Arkansas Dept. of Health and Human Servs. v Ahlborn, 547 U.S. 268 (2006), the United States Supreme Court addressed the issue of what amount of the proceeds of a settlement can be used to satisfy a Medicaid lien. In Ahlborn, the Supreme Court held that the statutory exception to the anti-lien provision in the Medicaid statute, which permits states to enforce statutory liens on settlements, judgments or awards of monies to Medicaid recipients, applies only to the portion of the settlement, judgment or award allocated to past medical expenses.

Since the Ahlborn decision is relatively new, it has not been applied in many reported cases. Recently, however, in Chambers v. Jain, a New York trial court held an evidentiary hearing to determine the full value of the plaintiff’s case versus amount for which it settled, and reduced the Medicaid claim on pro rata basis. Since the government can be very difficult to deal with when it comes to these types of liens, we expect to see more of these evidentiary hearings in the future.

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