• Home
  • /
  • Blog
  • /
  • Here’s a Guide To Understanding Medi-Cal Liens

Here’s a Guide To Understanding Medi-Cal Liens


A personal injury settlement or judgment can help you obtain compensation for medical bills, expenses, and lost income. Most personal injury cases take time to resolve and can lead to questions regarding what that means for your government benefits and the need for information on Medi-Cal liens.

While you wait for your case to wrap up, Medicaid or Medi-Cal will pay for your treatment. When you finalize your case, Medicaid or Medi-Cal will seek reimbursement to cover the expenses they paid on your behalf.

Handling the proceeds of your settlement can be tricky. Beyond having a right to be reimbursed, Medicaid and Medi-Cal are assistive programs with income limits. What happens if you get thousands or even millions of dollars in a settlement? Are you still eligible for Medicaid or Medi-Cal (California’s form of Medicare)?

What Is a Medicaid or Medi-Cal Lien?

California law gives Medi-Cal members the right to get reimbursed from personal injury settlements.

If you file a personal injury lawsuit as a Medi-Cal member, you must notify the California Department of Health Care Services (DHCS) within 30 days of filing the suit. You are also required to notify DHCS as soon as you get your settlement and when your medical treatment ends. A personal injury attorney and their team can help you navigate this process. 

Once you notify the DHCS, you can begin to create a Medi-Cal lien. A lien gives the government the right to collect – a kind of I.O.U. to be paid later. Medi-Cal’s right to collect allows the organization to request a refund from personal injury settlements for treatment funds. 

Under California law, the DHCS can recover Medi-Cal payments up to the date of your settlement or once all legal actions related to your injury are completed. After that, you can create a special needs trust out of which future payments will be taken.

A Medi-Cal lien can only affect the part of your settlement that compensates you for medical expenses. So it cannot affect any damages you get for lost wages or pain and suffering. The lien is limited by the original amount Medi-Cal paid for your treatment. Additionally, the DHCS has the power to compromise, settle, or waive its lien claim. For example, Medi-Cal’s claim may be reduced if you have attorney’s fees or litigation costs.

Medi-Cal can’t take more than 50% of your settlement.

If you fail to notify the government that you’re filing a lawsuit, the DHCS can take legal action against you to obtain Medi-Cal reimbursements. This can lead to more time in court – and cost you a lot more than simply notifying the DHCS – so you should inform the DHCS as soon as possible if you file a personal injury suit. 

How to Stay Eligible for Medi-Cal After a Personal Injury Settlement

After a personal injury settlement, the last thing you want is to lose your Medicaid or Medi-Cal benefits. But depending on the amount of compensation you get in your personal injury settlement, you may exceed the income limits that make you eligible for these programs.

It’s important to consider that injuries can have long-lasting effects which take years or even decades to treat. Even if you settle for hundreds of thousands or millions of dollars, remaining on Medi-Cal can help ensure that your treatments remain covered. 

You have a couple of options when it comes to remaining Medi-Cal eligible after your settlement: Spending down your settlement proceeds (not always the best option) or creating a special needs trust.

A special needs trust can hold money without those resources counting towards your income. As a result, the money in the trust won’t exceed Medi-Cal income limits. You can continue using money from the trust to pay for any medical expenses beyond what your Medi-Cal coverage pays. 

Don’t Pay for Someone Else’s Mistakes

You shouldn’t be on the hook for someone else’s negligence or have to choose between the settlement you deserve and remaining on Medi-Cal. A skilled personal injury attorney can help you manage your settlement payout in a way that:

  • Keeps you eligible for Medicaid and Medi-Cal government benefits,
  • Cuts down on the fines you must pay out of your settlement, and
  • Sustains your treatment long-term as much as necessary.

This ensures you get the greatest possible benefit out of your settlement. To work with one of our personal injury lawyers here at Wilshire Law Firm, contact us online or give us a call at (800) 501-3011