Medi-Cal lien

What it is

When Medi-Cal pays for care related to an injury someone else caused, the state can recover those payments from the member's settlement or judgment. The Department of Health Care Services (DHCS) runs the recovery through its personal injury program.

The California rule

The program is governed by Welfare and Institutions Code sections 14124.70 and following. DHCS says the member or the member's attorney must notify it in writing within 30 days of filing a claim or action, and notify it again at settlement, before disbursing. DHCS then issues its lien. The statute reduces DHCS's recovery for its share of the attorney fees and costs spent obtaining it; practitioners cite a 25 percent reduction for fees under section 14124.72. Federal law sets an outer limit. In Arkansas Department of Health and Human Services v. Ahlborn (2006), the U.S. Supreme Court held that a state can't take more than the part of the settlement that represents payment for medical care. When the parties disagree about that allocation, the question can be put to the court.

Why it matters to a plaintiff firm

Medi-Cal members are a large share of many California injury caseloads, and a missed notice can complicate a settlement. Firms ask about Medi-Cal and managed care enrollment at intake, send notice promptly, request the itemized payment list, dispute care unrelated to the injury, and compare the lien with the medical portion of the recovery before agreeing to a figure.