Alabama Workers' Comp Blawg

  • 07
  • Apr
  • 2016

Alabama Settlements Soon to be Subject to Enhanced Medicaid Lien

The Medicaid Secondary Payer Act will take effect on October 1, 2016. The new law substantially expands state Medicaid recovery rights, and these changes will affect settlements of workers’ compensation and liability claims involving Medicaid beneficiaries. 

The Medicaid Secondary Payer Act represents the federal government’s response to the problems facing state Medicaid programs in their recovery efforts. The Affordable Care Act expanded the scope of persons eligible for Medicaid coverage, and at the same time, a state’s recovery efforts remained inhibited by court decisions and anti-lien provisions. In other words, the number of persons covered became disproportionate to the amount of money being recovered. The Medicaid Secondary Payer Act would seemingly strike a balance. 

Under current law, a state’s Medicaid reimbursement rights are limited to portions of a settlement designated as medical expenses. In contrast, the Medicaid Secondary Payer provision allows states to recover from the entire settlement amount. More specifically, this provision eliminates the statutory language the Supreme Court relied on in Arkansas Department of Human Services v. Ahlborn, which limited Medicaid reimbursement rights to portions of the settlement or judgment related to “health care items or services.” The new language allows recovery against “any payments.” As a result, Medicaid will be able to claim 100 percent of its lien from settlements with its beneficiaries. 

Whether you are attempting to settle a workers compensation claim or simply protecting your subrogation lien in a third party settlement, it will soon be more important than ever to determine the existence and extent of any Medicaid liens. 


About the Authors

This blog submission was prepared by Mike Fish and Ashleigh Hunnicutt. Both are attorneys with Fish, Nelson & Holden, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Fish Nelson & Holden is a member of the National Workers’ Compensation Defense Network. If you have any questions about this submission or Alabama workers’ compensation in general, please contact Fish or Hunnicutt by e-mailing then at  or or by calling them at 205-332-1448.



Follow and connect with us!