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Why Is Medi-Cal Causing A Delay In Payment Of My Car Accident Settlement?

Q: Medi-Cal paid some of my medical bills from a car accident. My case settled, but my attorney is saying the other driver’s insurance company won’t cut the check until they hear from Medi-Cal. Is that legit?

A: Yes. If Medi-Cal paid any medical bills related to an accident, then Medi-Cal has a “statutory right of reimbursement.” That means that an attorney is obligated under California law to notify Medi-Cal about the legal claim, and to reimburse Medi-Cal out of the settlement. If the attorney fails to do so and disperses the money to the client, without reimbursing Medi-Cal, then the law firm is personally on the hook to reimburse Medi-Cal.

When there is a Medi-Cal reimbursement claim, the defendant’s insurance company will not cut the settlement check until it receives Medi-Cal’s final reimbursement claim. This can lead to a lengthy delay, and a very frustrated client. If your injuries were serious, causing you to miss time from work, you may be in desperate need of those settlement funds in order to pay your bills. Our advice: share your financial concerns with your attorney. Your law firm may be able and willing to advance you a portion of your settlement proceeds, pending receipt of the final Medi-Cal lien.

There is usually a long delay before hearing back from Medi-Cal regarding their final reimbursement amount. Therefore, when a personal injury lawyer signs up a case involving Medi-Cal-paid medical treatment, the law firm should immediately get the ball rolling by notifying Medi-Cal about the existence of the legal claim and request the itemized reimbursement claim.

Medi-Cal’s final lien amount will not be finalized until it has received notification that the case has settled. And then it can take up to another 120 days, after settlement, to finalize its lien claim.

As frustrating as it is, the defendant’s insurance company won’t cut your settlement check until it receives that letter from Medi-Cal. All you can do is make sure your attorney notified Medi-Cal of the date of settlement. And then you wait…

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If what your lawyer is telling you doesn’t seem right or doesn’t make sense, you are welcome to run the situation by our attorneys and we’ll tell you what we think. We provide free consultations and free second opinions.

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