Medicaid Liens After the Ahlborn Decision

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.

I anticipate that when a Connecticut court is presented with the same issue, that an evidentiary hearing will be ordered as well to determine the full value of the case versus the amount it settled for.