Congress Delays Anti-Ahlborn Medicaid Lien Amendment

Congress has delayed by two years a provision in last year's budget bill that gives states the ability to recover Medicaid costs from a beneficiary's full personal injury settlement or award. The law, which negates the U.S. Supreme Court's decisions in Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268 (2006) and Wos v. E.M.A, 568 U.S. 2 ___(2013),  was set to go into effect on October 1, 2014, but now has been delayed until October 1, 2016.

In December 2013, Congress's budget compromise unexpectedly contained language that amended the Social Security Act to give states the right to recover from Medicaid beneficiaries' entire settlements and to place a lien on those settlements or awards. Last month Congress passed – and President Obama signed -- HR 4302, which postpones pending Medicare physician payment cuts by one year.  But tucked into the legislation is a one-sentence provision (Sec. 211) that delays the effective date of the anti-Ahlborn provision for two years, until Oct. 1, 2016. This means that Medicaid will continue to be able to recover only from the portion of a personal injury settlement or award that was allocated to medical expenses.

The original budget bill amendment was passed with no notice and advocates did not have a chance to challenge it. Advocates worry that the result of the new law will be that Medicaid recipients will receive less in personal injury settlements because their full recovery will be subject to a Medicaid lien. The American Association for Justice (formerly the Association of Trial Lawyers of America) has been working to eliminate the provision.

Another noteworthy piece of legislation did not make it into the final physician payment bill -- The Fairness Act, which would allow mentally competent people with special needs to create their own speical needs trusts.  The Act was included in a Senate bill to permanently fix Medicare's physician payment scheme, but lawmakers chose not to include it in the one-year "patch" measure. 

To read the full text of HR 4302, click here.

To read our earlier coverage of the amendment to the Social Security Act, click here.