09/19/2026
MEDICARE, MEDICAID, AND MEDICAL-MALPRACTICE RECOVERIES: WHAT PATIENTS SHOULD KNOW
Winning or settling a medical-malpractice case does not necessarily mean the injured patient receives the entire recovery.
If Medicare or Medicaid paid medical expenses connected to the injury, the program may have a legal right to seek reimbursement from a settlement, judgment, or other payment. Medicare describes certain payments as “conditional” because Medicare may later recover appropriate case-related expenses when another party becomes responsible. "CMS explains the Medicare recovery process here." (https://www.cms.gov/medicare/coordination-benefits-recovery/beneficiary-services)
A hospital or healthcare provider may also claim a lien for unpaid medical bills—but that is a separate issue. Hospital-lien rights depend on the law of the state where the care and legal case occurred. A hospital does not automatically own part of every malpractice claim simply because a lawsuit was filed.
Before accepting or distributing a settlement, patients and families should ask their attorney to:
• Determine whether Medicare, Medicaid, or another benefit program paid case-related expenses.
• Identify every asserted hospital, provider, insurance, or government lien.
• Verify that each claimed charge is connected to the case and legally recoverable.
• Request an itemized statement and final payoff amount.
• Determine whether any lien may be challenged, reduced, or negotiated.
• Explain in writing how the settlement will be distributed before documents are signed.
Do not ignore a lien notice—but do not assume every amount demanded is accurate or final.
Because Medicare recovery rules, Medicaid requirements, and hospital-lien laws are different, anyone facing this issue should speak with a licensed attorney in their state before accepting a settlement or distributing the proceeds.
NMMAA is not a law firm and does not provide legal advice. This information is for public education and patient awareness.
National Medical Malpractice Advocacy Association
https://nmmaa.org
Medicare is a health insurance program designed to assist the nation's elderly to meet hospital, medical, and other health costs. Medicare is available to most individuals 65 years of age and older. Medicare has also been extended to persons under age 65 who are receiving disability benefits from So...
