On February 8, 2018, the U.S. Senate announced a budget deal that will fund the government for two years. On February 9, H.R. 1892 became law: The Bipartisan Budget Act of 2018. Deep within the bill, at Section 53102(b)(1), there is a complete repeal of the Medicaid changes that were included in the 2013 budget bill, which extended the Medicaid lien to reach the entire settlement proceeds effective October 1, 2017. As of that date, Medicaid could arguably collect on 100% of its lien, regardless of the settlement amount, and regardless of whether any part of that settlement included a past medical component.
Precision Resolution’s position is that this 2018 repeal of the 2013 amendments, effective retroactive to September 30, 2017, does far more than restore the Ahlborn allocation principle. As many of you know, prior to the effective date of the “Ahlborn repeal” on October 1, 2017, our office had always taken the position that Medicaid liens cannot exist against the property of a plaintiff. This position is rooted in the unambiguous terminology of the federal Anti-Lien Statute (42 U.S.C. § 1396p(a)(1):
No lien may be imposed against the property of any individual prior to his death on account of medical assistance paid or to be paid on his behalf under the State plan, except…
This is not to say that the Medicaid agency does not have recovery rights, however. We have always argued that the Medicaid right is limited to subrogation by means of “automatic assignment” of the medical component of the case. That is because the Medicaid act also mandates:
(a) For the purpose of assisting in the collection of medical support payments and other payments for medical care owed to recipients of medical assistance under the State plan approved under this title [42 USCS §§ 1396 et seq.], a State plan for medical assistance shall–(1) provide that, as a condition of eligibility for medical assistance under the State plan to an individual who has the legal capacity to execute an assignment for himself, the individual is required—
(A) to assign the State any rights, of the individual or of any other person who is eligible for medical assistance under this title [42 USCS §§ 1396 et seq.] and on whose behalf the individual has the legal authority to execute an assignment of such rights, to support (specified as support for the purpose of medical care by a court or administrative order) and to any payment from a third party that has a legal liability to pay for care and services available under the plan; 42 USCS § 1396k (emphasis added).
In Ahlborn, 547 U.S. 268 (2006), when the Arkansas Medicaid agency sought recovery of the entire amount of its lien on a limited recovery, Ms. Ahlborn fought back. In doing so, she acknowledged that Arkansas had a lien, but that it was limited to the “automatically assigned” medical component of the claim. The United States Supreme Court agreed, but appeared to want to go further. Justice Stevens wrote for a unanimous Court:
Read literally and in isolation, the anti-lien prohibition contained in § 1396p(a) would appear to ban even a lien on that portion of the settlement proceeds that represents payments for medical care. Ahlborn does not ask us to go so far, though; she assumes that the State’s lien is consistent with federal law insofar as it encumbers proceeds designated as payments for medical care. Her argument, rather, is that the anti-lien provision precludes attachment or encumbrance of the remainder of the settlement. Ahlborn, 547 U.S. at 284 (emphasis added).
The 2013 Bipartisan Budget Act therefore not only legislatively overruled Ahlborn, but also gutted the plain language and intent of the federal anti-lien statute. Ironically, for a few short months the revised “Anti-Lien statute” actually created a lien that had previously not existed.
The 2018 repeal of those Medicaid provisions in the 2013 Act not only restored the “Ahlborn allocation” but also restored the original congressional intent of the Medicaid Act (Social Security Act) signed into law by President Johnson in 1965 that states, “No lien may be imposed against the property of any individual prior to his death on account of medical assistance paid or to be paid on his behalf under the State plan.” 42 USC § 1396p.
