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Preserving Entitlement To Medicaid in Brain Injury Lawsuits

De Caro & Kaplen partner Michael V. Kaplen, a three-term president of the Brain Injury Association of New York State, and professorial lecturer at law, teaching a course in brain injury law at the George Washington University Law School, discusses the importance of preserving the right to Medicaid services on settlement of brain injury lawsuits.

How can the settlement of a brain injury case impact an individual’s ability to continue to receive Medicaid services?

Important considerations for Medicaid Recipients Settling a Brain Injury Lawsuit:

The eligibility to receive Medicaid services may be affected by any settlement of a brain injury lawsuit because of financial eligibility requirements.

What does federal law require Medicaid recipients to do with their settlement funds?  

Federal Law required Medicaid recipients to reimburse Medicaid for the services they have provided and caused by their brain injury from the funds received in any brain injury lawsuit settlement. If an individual receives a sum of money as the settlement of a personal injury lawsuit, that individual may exceed the Medicaid threshold or income level causing ineligibility for future Medicaid benefits.

What do attorneys and brain injury clients need to do before they settle a brain injury case involving care paid by Medicaid?

  • Client must be notified of Medicaid lien and payback requirements.
  • Attorney and client must determine if the amount of the settlement is sufficient to satisfy any Medicaid lien and its impact on future eligibility for Medicaid benefits.   
  • Attorney must carefully review Medicaid bills to determine if they are related to lawsuit brain injury claims.

How can an individual protect the right to receive future Medicaid benefits when settling a personal injury lawsuit?

  • Creation of a “Supplemental Needs Trust” or a “Special Needs Trust”, which is available to individuals under the age of 65.
  • Lawsuit settlement are placed in a special trust to continue eligibility for Medicaid benefits with the trust paying for services that are not Medicaid reimbursable.

What type of services and benefits can be provided in a supplemental or special needs trust?

Enhanced accommodations in the home, special transportation services, recreational services, therapeutic services are examples of services not provided for by Medicaid which can be paid for by the trust.

What are important considerations in establishing a Medicaid Supplemental Needs or Medical Special Needs Trust?

  • Trust must be established before receipt of personal injury settlement funds.
  • Medicaid must be paid back for all back benefits.
  • If a trust is created and funds remain when the trust recipient passes away, Medicaid must be paid back from the remaining funds.
  • Medicaid must be notified of the trust’s creation.

About The Author

Michael V. Kaplen

Michael V. Kaplen represents victims of vehicle collisions, unsafe buildings and construction sites, and medical malpractice, and is a preferred attorney of The Brain Injury Association of America.

Michael is board certified as a Civil Trial Advocate and board certified in medical malpractice litigation. He is a Professorial Lecturer in Law, The George Washington University Law School, The Legal Aspects of Traumatic Brain Injury.

Michael is past chairman of the American Association for Justice (AAJ) Automobile, Highway and Premise Liability Section, past chairman of the AAJ Traumatic Brain Injury Litigation Group, three term president of the Brain Injury Association of New York State served two terms as chair of the New York State Traumatic Brain Injury Services Coordinating Council and vice-president, New York State Academy of Trial Lawyers.

He was invited by President Obama to participate in the White House Healthy Kids & Safe Sports Concussion Summit.

He is admitted to courts in New York, Florida, and Washington, DC. He has been selected as a New York Super Lawyer and recognized by Best Lawyers of America and U.S. News and World Report in personal injury law.

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