Medicaid Law Bars Hospital Liens on Patients’ Lawsuit Winnings

Arizona hospitals may not claim money low-income patients get from settlements or damage awards to make up for bills not fully paid by Medicaid, a state appeals court said.

The Medicaid program is the “payer of last resort” for eligible patients, the Arizona Court of Appeals, First Division, said March 12. That means once it pays a health-care provider, the provider can’t supplement that payment by seeking money from anyone else, the court said.

The Arizona court joined sister states and federal courts that unanimously have held that federal Medicaid law preempts state laws allowing hospitals to place liens on ...