If you are injured in an accident and your medical care is paid for by a government program like Medicare or Florida Medicaid, you are subject to some of the strictest reimbursement laws in the country. Under state and federal law, the government refuses to pay for injuries that were caused by someone else’s negligence. If you successfully sue the at-fault party and win a settlement, the government is legally entitled to take their money back before you receive a single dollar. This mechanism is known in the legal community as a “Super Lien,” and mismanaging it can result in severe financial penalties and the loss of your settlement funds.
The Medicare Secondary Payer (MSP) Act
Federal law, specifically the Medicare Secondary Payer Act, dictates that Medicare is always a “secondary payer” when another liability insurance policy (like an at-fault driver’s auto insurance) is available.
If Medicare pays for your emergency surgery or ongoing rehabilitation because the auto insurance company is dragging its feet, Medicare is making a “conditional payment.” The condition is simple: once your personal injury case settles, Medicare possesses an automatic, priority statutory lien against those funds.
Federal law requires that anyone involved in the settlement—including you, your attorney, and the defendant’s insurance company—report the settlement to the Centers for Medicare & Medicaid Services (CMS) within 60 days. If your attorney disburses the settlement money to you without paying Medicare back, CMS can sue you, your lawyer, and the insurance company for double damages.
Florida Medicaid’s Aggressive Reach
If you receive benefits through Florida Medicaid, the rules are equally harsh. Under the Florida Medicaid Third-Party Liability Act, the state is automatically subrogated to your rights to collect from a third party. Medicaid’s lien is absolute and takes priority over almost every other claim on your settlement, including your own claim for pain and suffering.
Can Government Liens Be Reduced?
Because “Super Liens” take absolute priority, victims with catastrophic injuries can sometimes find themselves in a situation where the government lien exceeds the entire value of the auto insurance settlement, leaving them with nothing.
Fortunately, there are legal mechanisms to fight back. Experienced attorneys can petition CMS or Florida Medicaid for a compromise or waiver of the lien. The government will occasionally reduce their demand if paying the full lien would cause immense financial hardship, or if they recognize that the plaintiff had to overcome Florida’s 51% Modified Comparative Negligence rule to secure the funds. Never attempt to resolve a case involving government healthcare without first projecting your long-term payout using independent valuation tools.