Bipartisan Budget Act of 2018: Medicaid Reimbursement Limited

On 2/9/2018, President Donald Trump signed into law the Bipartisan Budget Act of 2018. As a part of the 2018 Act, Section 53102 repeals section 202(b) of the Bipartisan Budget Act of 2013. Section 202(b) was the legislative response to the United States Supreme Court Decision in Arkansas Dept. of Health and Human Services, et. al. v. Ahlborn, 547 U.S. 268 (2006).

Practically speaking, the Supreme Court in Ahlborn ruled that where there is a settlement or judgment of a third party liability claim, federal law limited Medicaid’s recovery to the amount designated as payment of medical expenses. The Bipartisan Budget Act of 2013 altered the federal law the Supreme Court relied on in deciding Ahlborn. By altering the law, Congress provided direction to the Supreme Court and the public that Medicaid could recover up to the amount of settlement or judgment associated with a third party liability claims. The effective date of this change initially was 10/1/2014, but ultimately the change in recovery became effective on 10/1/2017.

The Bipartisan Budget Act of 2018 does away with Section 202(b) of the 2013 Act retroactively as of 9/30/2017 (before the 10/1/2017 effective date). This puts the Supreme Court’s interpretation of the federal law in Ahlborn back in play and may limit Medicaid’s recovery to the amount the settlement or judgment has designated as payment of medical expenses.

As more develops over Medicaid’s reimbursement rights, we will keep you posted.

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