If you’ve been injured by a third party, and you pursue a claim and receive money, it is possible that Medicare or Medicaid could have a right to recover some portion of your settlement or your trial verdict.

This comes from a federal law called the Medicare Secondary Payer Act (MSPA). The law allows Medicare and Medicaid to seek repayment out of personal injury settlements and awards if Medicare or Medicaid paid for some of the medical treatment required by the claimant’s injury.

Medicare and Medicaid Liens – Rights to Reimbursement

Medicare’s right to reimbursement is called a “lien.” What the MSPA says is that if you are injured by a third party and you receive medical treatment for those injuries and Medicare or Medicaid pays for that treatment, they have a right to reimbursement of those payments. Those federal programs will then have a lien on your personal injury settlement.

It may sound complicated, but essentially what it means is this: once a case has settled or received a verdict in trial, Medicare and Medicaid will have a right to recover some portion of that money. Settlement funds are held until an agreement is reached and Medicare or Medicaid are paid and the lien is resolved.