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The Obligation of Lawyers and Clients to Reimburse State Government for Public Benefits

Public Benefits

The Obligation of Lawyers and Clients to Reimburse State Government for Public Benefits

Date Posted: 
04/24/2017

ABSTRACT

One of the common issues that arise for attorneys doing personal injury work is the obligation of an attorney to reimburse the state Department of Human Services (DHS) out of funds obtained for a personal injury client. For Medicaid, or Medical Assistance (MA), as it is sometimes known in Pennsylvania, the relevant state statutory provisions are in the Human Services Code (formerly the Public Welfare Code) at 62 P.S. §§1409 and 1409.1 (2010), which provide that, in cases where DHS has made Medical Assistance expenditures as a result of injuries sustained for which another person is liable, an attorney has an obligation to provide DHS with the notice of the institution of legal proceeding, notice of settlement of any such lawsuit and certain other details discussed below. In light of two decisions by the Pennsylvania Supreme Court which held that failure of attorneys to abide by the requirements §1409 was not actionable in any way, Commonwealth of Pennsylvania, Department of Public Welfare v. Portnoy and Commonwealth of Pennsylvania, Department of Public Welfare v. Thomas, the General Assembly amended the statute in 1994 and again in 2008. The amended provision creates an obligation, enforceable by civil and criminal penalties against both plaintiffs and lawyers, to satisfy the interest of the Department for reimbursement for MA spent because of the injury. Recent developments have made things more difficult for tort plaintiffs and their counsel.

This article (below) will address both federal and state issues of which attorneys must be aware in these situations.

 

 

 

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