Sometimes a client may receive payments under a personal injury settlement or from a third party such as an insurance company. The payment, or payments, counts as income in the month received and as an asset the month after receipt. Certain expenses are usually deducted from the total settlement amount before the individual receives payment.
If the settlement is being received because the person was injured and the individual has been receiving Medicaid, report the settlement to the Office of Recovery Services as soon as you become aware that the individual may be receiving a settlement. ORS may place a lien against the settlement to recoup Medicaid expenses that have been paid on behalf of the individual. If you do not learn of the settlement until after the payment has been made, immediately report this to ORS.
For Medicaid, the following expenses can be deducted from the total settlement before counting the settlement as income. Other expenses may be deductible. Request a copy of the court documents, or settlement agreement to determine the amounts that can be deducted. Contact the BEP Program Specialist if you need help deciding what can be deducted.
Generally, the court or settlement agreement will show the exact amounts to be paid out for expenses, and the remaining amount that will be paid to the individual. If the court or settlement agreement specifically indicates that other payments will be paid out before any payments are made to the individual, we may be able to deduct those expenses, too. An example may include payments to someone who has provided personal care and assistance to the injured individual. However, if you are not sure whether some expenses should be allowed as a deduction before counting the remainder as income, contact a BEP Health Program Specialist.
If the individual places the settlement funds in a trust, or indicates that the funds are not available for some reason, and you need help deciding if it is available, send a copy of the trust and the settlement or court papers to the BEP Program Specialist to review. If the individual is disabled, and the trust is set up to meet the criteria for an exempt special needs trust, the settlement amount may not count as income or as an asset. If you need help deciding if it is available, send the relevant paperwork to the BEP Program Specialist to decide if the trust meets the criteria for an exempt special needs trust.
When a worker learns that a client will be receiving a settlement, make sure ORS knows about the settlement. ORS may be able to place a lien against the settlement for Medicaid expenses paid on behalf of the individual.