Federal law requires each State to enact statutes to facilitate recovery of medical payments from liable third parties and to collect Medicaid expenditures from the estates of deceased Medicaid recipients. Enacting and enforcing these statutes is a condition to each State’s participation in the Medicaid program and the receipt of Federal funding. However, unlike Medicare which is administered by the same Federal agency everywhere in the country, Medicaid comes with the slight wrinkle of being administered by a collection of 50 different state agencies. This is a natural part of the system because Medicaid is a state administered program, which means that each of the 50 States needs to have its own state Medicaid agency.
Further complicating the inherent administrative variation that comes with 50 state agencies implementing 50 sets of individual rules is the fact that Federal law allows some latitude in how States actually carry out the mandate to recover Medicaid expenditures. In other words, while the Federal requirement to enact recovery statutes is consistent across the country, the statutory scheme that each State has enacted to meet this requirement is different. Perhaps the final complicating factor in resolving Medicaid liens is the effect of case law. Under certain factual circumstances, both State and Federal case law can significantly curtail a State’s ability to recover from a plaintiff’s entire personal injury settlement.