Medicaid no longer subject to Ahlborn reductions.

By Michael Laffey, October 2, 2017

Medicaid Third Party Lien Recovery  Rights Reinstated.


Finally effective October 1, 2017  legislative amendments to address the US Supreme Courts allocation of third party settlement monies have become effective.


In a series of legislative changes as more fully described below, Medicaid has effectively amended those portions of the Social Security Act that the Ahlborn Court (  said limited its rights to 100% recovery from Third party settlements.  These amendments first passed in 2013 have finally become effective.  While many states have amended their TPL statutes to account for the Ahlborn Impact, many have not and require first repayment of Medicaid prior to payment to the participant.


The Bipartisan Budget Act of 2013. Section 202 stated that:

SEC. 202. STRENGTHENING MEDICAID THIRD-PARTY LIABILITY. (a) PAYMENT FOR PRENATAL AND PREVENTIVE PEDIATRIC CARE AND IN CASES INVOLVING MEDICAL SUPPORT.—Section 1902(a)(25) of the Social Security Act (42 U.S.C. 1396a(a)(25)) is amended—(b) RECOVERY OF MEDICAID EXPENDITURES FROM BENEFICIARY LIABILITY SETTLEMENTS.— (1) STATE PLAN REQUIREMENTS.—Section 1902(a)(25) of the Social Security Act (42 U.S.C. 1396a(a)(25)) is amended— (A) in subparagraph (B), by striking ‘‘to the extent of such legal liability’’; and (B) in subparagraph (H), by striking ‘‘payment by any other party for such health care items or services’’ and inserting ‘‘any payments by such third party’’. (2) ASSIGNMENT OF RIGHTS OF PAYMENT.—Section 1912(a)(1)(A) of such Act (42 U.S.C. 1396k(a)(1)(A)) is amended by striking ‘‘payment for medical care from any third party’’ and inserting ‘‘any payment from a third party that has a legal liability to pay for care and services available under the plan’’. (3) LIENS.—Section 1917(a)(1)(A) of such Act (42 U.S.C. 1396p(a)(1)(A)) is amended to read as follows: ‘‘(A) pursuant to— ‘‘(i) the judgment of a court on account of benefits incorrectly paid on behalf of such individual, or ‘‘(ii) rights acquired by or assigned to the State in accordance with section 1902(a)(25)(H) or section 1912(a)(1)(A), or’’. (c) EFFECTIVE DATE.—The amendments made by this section shall take effect on October 1, 2014.

The effective date however had been delayed until October 1, 2017 by the  MEDICARE ACCESS AND CHIP REAUTHORIZATION ACT OF 2015, 114 P.L. 10 , enacted April 16, 2015 which provided:


Section 202(c) of the Bipartisan Budget Act of 2013 (division A of Public Law 113-67; 42 U.S.C. 1396a note), as amended by section 211 of the Protecting Access to Medicare Act of 2014 (Public Law 113-93; 128 Stat. 1047) is amended by striking “October 1, 2016” and inserting “October 1, 2017”.



 Health Plans administering Medicaid and Personal injury attorneys everywhere should check with their state Medicaid agency’s to see how these new laws will effect their clients rights.