MARC Successful in Repealing Murray/Ryan Legislation: Medicaid Third Party Liability Fairness Returns
Heather Sanderson
February 12, 2018

As we have discussed in numerous blogs and webinars, Medicaid Third Party Liability (TPL) operates at a state level. For a more detailed explanation on Medicaid TPL, click here. In summary, the Centers for Medicare & Medicaid Services (CMS) has required each state to implement TPL legislation and regulation surrounding the recovery of medical payments made by Medicaid, where a primary payer such as a workers’ compensation, liability or no-fault plan had responsibility to pay for the medical treatment.

While the nuance of Medicaid TPL is governed by state regulation, the ability to control to what extent that each state Medicaid agency can recover liens from a primary payer has been controlled by Federal law/case law. On May 1, 2006, the Supreme Court ruled in Arkansas v. Ahlborn that state Medicaid agencies can only recover from the portion of the settlement attributed to medical expenses. However, in 2013, legislation was passed known as the Murray/Ryan budget deal which essentially allowed Medicaid to recover 100% of their lien from the settlement amount as of October 1, 2017, effectively overturning the Ahlborn case.

Ever since the Murray/Ryan legislation was enacted, the Medicare Advocacy Recovery Coalition (MARC), of which Franco Signor is a founding member, has been a fierce advocate to overturn this legislation in Washington. If Medicaid can recover 100% of its lien, and not just from the portion of the settlement attributed to medical expenses, a Medicaid beneficiary may have no incentive to bring the claim in the first place, if its entire settlement would have to be paid back to Medicaid. A financially disadvantaged Medicaid beneficiary may have to return money recovered for pain and suffering, lost wages, etc. to Medicaid, essentially not making the Medicaid beneficiary whole for his/her loss.

We are pleased to announce that as of February 8th, MARC has repealed Murray/Ryan, and Medicaid agencies may now only recover from the medical portion of settlements. For more information on the repeal and MARC’s press release, click here.

It is important to note that this repeal does not eliminate state Medicaid agencies’ abilities to recover their liens, and this does not mean that primary payers should become complacent and not be concerned about Medicaid liens. We have seen states such as California just recently step up their Medicaid lien recovery efforts (Medi-Cal), and states such as Rhode Island recently enacted requirements for electronic reporting of claims with Medicaid beneficiaries by primary payers. Each state has its own Medicaid TPL requirements, and some states even have penalties for failure to notify Medicaid of a claim with a Medicaid beneficiary. We expect these individual state Medicaid TPL requirements to continue to evolve and it is important to stay abreast of these individual state TPL laws.

In the meantime, we applaud and congratulate the MARC Coalition in re-establishing fairness in the Medicaid TPL process. As always, we encourage involvement in the MARC Coalition to improve Medicare and Medicaid Secondary Payer Efforts. More information on the MARC Coalition can be found here. For more information on Franco Signor’s Medicaid lien services, please contact us.