## Facts

- Lester Homan was seriously injured in a head-on collision caused by an uninsured driver who crossed the center line.
- Because the tortfeasor was uninsured, Homan pursued recovery under his mother’s supplemental uninsured/underinsured motorist (SUM) coverage.
- The SUM claim settled for the $25,000 policy limit.
- The County Department of Social Services (DSS) paid Homan’s accident-related medical costs through Medicaid and asserted a statutory Medicaid lien against any recovery connected to the injuries.
- The settlement release purported to allocate the SUM proceeds solely to bodily injury and conscious pain and suffering, not medical expenses.
- Homan moved in Supreme Court for an order declaring DSS’s Medicaid lien null and void as to the SUM proceeds, relying in part on Arkansas Department of Health & Human Services v. Ahlborn.

## Issues

1. Whether a Medicaid lien can be defeated by drafting a settlement and release allocating the recovery solely to pain and suffering rather than medical expenses.
2. Whether Ahlborn bars DSS from enforcing a Medicaid lien against UM/SUM insurance proceeds or limits DSS to subrogation against the tortfeasor only.

## Decision

- The Supreme Court denied Homan’s motion and upheld DSS’s Medicaid lien as enforceable against the SUM recovery.
- The court held that a lien cannot be nullified by counsel’s characterization of settlement proceeds as pain and suffering only.
- The court rejected the argument that Ahlborn eliminates the lien or restricts DSS to subrogation against the tortfeasor.

## Legal Principles

- A Medicaid lien under New York law cannot be avoided solely through unilateral settlement language allocating all proceeds to non-medical damages.
- Federal Medicaid anti-lien limits, as described in Ahlborn, restrict Medicaid’s recovery to the portion of a settlement fairly allocable to past medical expenses, but do not permit total avoidance of the lien by labeling a settlement as pain and suffering only.
- Ahlborn does not confine a local Medicaid agency to subrogation against the tortfeasor; the agency may assert a statutory lien against the injured recipient’s recovery, including UM/SUM proceeds, subject to the federal allocation limitation.

## Conclusion

The court upheld DSS’s Medicaid lien against the $25,000 SUM settlement, ruling that settlement drafting cannot extinguish the lien and that Ahlborn limits Medicaid reimbursement to the medical-expense component of a recovery without barring enforcement of the lien against UM/SUM proceeds.


Homan v. Cnty. of Cattaraugus Dep’t of Soc. Servs., 901 N.Y.S.2d 899 (Sup. Ct. Cattaraugus Cnty. 2009)