If the Oregon Health Plan has paid for some or all of the medical bills resulting from an injury caused by a third party (such as an auto accident injury caused by the negligence of another driver), it is likely that the State of Oregon will seek reimbursement from any settlement. The first thing an attorney should do when learning that the Oregon Health Plan has paid medical bills is to put the payor on notice of your representation. This notice is required by ORS 416.530. If you fail to provide notice, you expose your client to being sued for failing to reimburse the State of Oregon. See ORS 416.610.
Keep in mind that the Oregon Health Plan goes by many names and is administered and collected by many entities. It is federal Medicaid money that the Department of Human Services (DHS) of the State of Oregon administers under Care Oregon. In a recent case of mine, a private company (Columbia Pacific CCO, a “coordinated care organization”) paid the medical care provider. So, I sent my notice under ORS 416.530 to Columbia Pacific CCO, although it may have been a better practice to have copied DHS with the notice as well. Further, as the case progressed and the Oregon Health Plan sought reimbursement, it did so through a company called SCIO Health & Analytics and later through a company called EXL (who bought out SCIO).
I am only going to write about two bases for lowering or extinguishing a Medicaid/Care Oregon lien. The first is a Supreme Court case, Arkansas Dept. of Health and Human Servs. v. Ahlborn, 547 U.S. 268 (2006). This case applies when a case settles for a fraction of what it might be worth (because of liability problems or insufficiency of insurance coverage). Let’s say that a case has total economic and non-economic damages of $200,000 settles for $50,000 (either because there was only $50,000 insurance coverage or because of problems with causation or liability). And let’s say that Care Oregon paid for $12,000 of medical bills. According to the Ahlborn case, the plaintiff in this hypothetical would only have to reimburse the State of Oregon $3000, rather than the full $12,000. Because the case settled for one-quarter of its worth, the State of Oregon is only entitled to recover one-quarter of what it paid out. (Now, the State of Oregon may argue that Alborn should not apply like that, and it might cite to an Idaho case to support its argument as it did in my case, but I believe that Idaho case can be distinguished and that Ahlborn applies.)
The second basis for extinguishing the State’s lien is the State’s failure to perfect its lien. ORS 416.550(1)(b) requires the State to send by certified or registered mail, a copy of its notice of lien, “[p]rior to the date of satisfaction of the judgment or payment under the settlement or compromise.” If the State fails to do that, its lien no longer exists and it has no right to obtain reimbursement. It does not matter that the State has an “automatic” lien on settlement or judgments under ORS 416.540(1), the State must still “perfect” its lien prior to the payment of a settlement or the satisfaction of a judgment.