CALIFORNIA MEDI-CAL HEALTH LIEN REDUCTION: What the heck is an "Ahlborn Reduction," and why or how is it relevant to my personal injury case settlement?

 

An "Ahlborn Reduction" is an argument a good injury lawyer will use on a client's injury case to reduce any MediCal health lien interest that needs to be paid back to MediCal at time of a personal injury settlement.  The more the lawyer can reduce the MediCal lien interest, the more the injured client will net in monetary recovery from the settlement.  So it is very important and very relevant to a personal injury case that utilized MediCal funds to pay for part or all of the medical care (for an injured person).  If this is you, then this FAQ is very important to be aware of!

LEGAL AUTHORITY FOR AN "AHLBORN REDUCTION"

 

As you know, the Supreme Court’s holding in the Ahlborn case was codified in California in W&I 14124.76. Said section provides in pertinent part that, “Recovery of the director’s lien from an injured beneficiary’s action or claim is limited to that portion of a settlement...that represents payment for medical expenses...” (emphasis supplied).

AHLBORN CALCULATION (THE FORMULA)

The following is a case example: 

"Given a total value of $11.3 million, it is a simple calculation to determine what percentage of his total injuries that Mr. XX actually recovered, as follows:

Total Settlement/Total Value (you divide the two numbers together), or

$465,000/$11.3 million = .0412

In other words, Mr. XX recovered no more than 4.12% of his total damages. It therefore stands to reason that he only collected 4.12% of his medical expenses paid by Medi- Cal. Therefore, Medi-Cal’s lien must be reduced to:

Total Lien X Percentage of recovery, or

$157,980 X .0412 = $6,509
 

This is the exact amount of Mr. XX’s medical expenses that Medi-Cal paid that he recovered in his settlement. Notably, Mr. VV already offered to pay this amount in his last letter. Also, please note that if we had used the $15 million total value figure expressed by Mediator Justice Dossee (Ret.), versus the more conservative average figure of $11.3 million, the Ahlborn figure would be more than 25% lower.

 

We agree with Medi-Cal’s position as stated in its letters that no further reduction is allowable for attorneys fees or costs, per W&I 14124.785.

Medi-Cal has routinely granted large reductions in Medi-Cal liens to this office, when they are supported by the evidence. Attached as Exhibit 5 is a redacted letter from Supervisor Diana Ghilarducci confirming an 85% reduction of a lien based upon a jury verdict finding plaintiff 75% comparatively negligent. Attached as Exhibit 6 is redacted recent letter from Medi-Cal agreeing to a 69% reduction of its lien for a woman who had recovered $8.56 million in settlement. In that case, the evidence supported and we had requested a 71% reduction. In another case, we obtained from the court the 84% reduction we had proposed when Medi-Cal failed to stipulate to same.

For all of these reasons, we are offering the sum of $6,509 in full satisfaction of Medi-Cal’s lien against our client. This offer will remain open for 20 days from the date of this letter. If we have not reached a satisfactory settlement within that period, we will file a motion with the court."

Conclusion:

An "Ahlborn Reduction" is just another way a California personal injury attorney can advocate for their clients position when negotiating a reduction to MediCal for an injured party(s) personal injury case.  For more information, you can check other articles and blog postings on the subject or call me directly at (619) 813-7955.


Mark C. Blane is a San Diego Auto Accident Attorney, and the managing lawyer of the Law Offices of Mark C. Blane, a San Diego, California Personal Injury Law Firm devoted to representing families of injured persons of automobile accidents. If you or someone you love, has been injured or killed in San Diego County, or Southern California, due to the negligence of another, please order your FREE copy of Mr. Blane's book, The 10 Secrets You Need To Know About Your Injury Case, BEFORE You Call A Lawyer. It is full of helpful information, insights, and secrets that will help you protect your legal rights.  It normally sells for $16.95; however, it is free to all California residents, or those injured in a California accident.

 
Mark Blane
Founder of The Law Offices of Mark Blane, APC