§ 994.2.Medicaid Recovery - Oklahoma Health Care Authority Recovery - Calculations

Chapter 15: Appeal and Error · Not amended since adoption on record · Last verified August 3, 2026

In one sentenceSection 994.2 requires the Oklahoma Health Care Authority to reduce its Medicaid recovery from a judgment or settlement by a proportional share of the procurement costs the recovering party paid, with separate formulas depending on whether Medicaid's payment is less than, equal to, or greater than the recovery.

Full Text of § 994.2

Text sizeJump to: (A) (B) (C) (D) (E) (F) (G) (H)

A. Recovery against the party that received payment.

1. General rule. Medicaid reduces its recovery to take account of the cost of procuring the judgment or settlement, as provided in this section, if:

a. procurement costs are incurred because the claim is disputed, and

b. those costs are borne by the party against which the Oklahoma Health Care Authority seeks to recover.

2. Special rule. If the Oklahoma Health Care Authority must file suit because the party that received payment opposes the Authority's recovery, the recovery amount is as set forth in subsection E of this section.

B. Recovery against the third-party payer. If the Oklahoma Health Care Authority seeks recovery from the third-party payer, the recovery amount will be no greater than the amount determined under subsection C, D or E of this section.

C. Medicaid payments are less than the judgment or settlement amount. If Medicaid payments are less than the judgment or settlement amount, the recovery is computed as follows:

1. Determine the ratio of the procurement costs to the total judgment or settlement payment;

2. Apply the ratio to the Medicaid payment. The product is the Medicaid share of procurement costs;

3. Subtract the Medicaid share of procurement costs from the Medicaid payments. The remainder is the Medicaid recovery amount.

D. Medicaid payments equal or exceed the judgment or settlement amount. If Medicaid payments equal or exceed the judgment or settlement amount, the recovery amount is the total judgment or settlement payment minus the total procurement costs.

E. The Oklahoma Health Care Authority incurs procurement costs because of opposition to its recovery. If the Oklahoma Health Care Authority must bring suit against the party that received payment because that party opposes the Authority's recovery, the recovery amount is the lower of the following:

1. Medicaid payment; or

2. The total judgment or settlement amount, minus the party's total procurement cost.

F. Medicaid recovery worksheet. The amount to be recovered from the beneficiary is the amount Medicaid paid, less a proportionate share of the costs of procuring the judgment or settlement. The amount to be refunded is determined as follows:

If the Medicaid payment is less than the amount of judgment or settlement: a. determine the ratio of the Medicaid payments to the total amount of the judgment or settlement,

b. apply this ratio to the costs of procuring the judgment or settlement, including attorney fees, and

c. subtract the Medicaid share of procurement costs from Medicaid payments. The remainder is the amount of reimbursement to be refunded to the Medicaid Program.

Step 1:

$__________________ / $___________________ = ___________________

Medicaid Payment Judgment/Settlement Ratio Carry out 6 digits

Step 2:

___________________ X $___________________ = ___________________

Ratio from Step 1 Carry out 6 Procurement Costs Medicaid Share of digits Procurement Costs

Step 3:

$__________________ - $___________________ = ___________________

Medicaid Payment Medicaid Share of Refund to Medicare Procurement Costs

G. If the Medicaid payments equal or exceed the amount of the judgment or settlement, subtract the total procurement costs from the judgment or settlement. The remainder is the amount of reimbursement to be refunded to the Medicaid Program. The individual will not be required to refund more than the liability insurance payment minus the procurement costs.

$__________________ - $___________________ = $__________________ Judgment/Settlement Procurement Costs Refund

H. The Oklahoma Health Care Authority is authorized to seek from the Centers for Medicare and Medicaid Services any waivers or amendments to existing waivers or to amend the state Medicaid plan in order to accomplish the purposes outlined in this section.

Amendment History

Added by Laws 2013, c. 14 s. 2, eff. 9/10/2013.

Note

Text formerly resided under repealed Title 12, § 994.1, which was derived from Laws 2009, c. 228, § 10, which was held unconstitutional by the Oklahoma Supreme Court in the case of Douglas v. Cox Retirement Properties, Inc., 2013 OK 37, 302 P.2d 789 (Okla. 2013).

Plain-English Summary

When Medicaid has paid medical expenses that a later judgment or settlement also covers, the Oklahoma Health Care Authority's recovery isn't the full Medicaid payment — it's reduced to account for the cost of getting that judgment or settlement, but only when the claim was disputed and the party the Authority is recovering from bore those procurement costs.

The formula depends on how the numbers compare. If Medicaid's payment is less than the judgment or settlement, the Authority's recovery is the Medicaid payment minus Medicaid's proportional share of the procurement costs, calculated by the ratio those costs bear to the total recovery. If Medicaid's payment equals or exceeds the recovery, the Authority instead recovers the total judgment or settlement minus the total procurement costs. And if the Authority had to sue because the party who received the payment opposed recovery, subsection E caps the recovery at the lower of the Medicaid payment or the recovery minus that party's procurement costs. The section spells out the same math as a fill-in-the-blank worksheet and authorizes the Authority to seek federal waivers or state plan amendments to carry the section out.

A compiler's note explains why this section exists as written: its predecessor, former Section 994.1, came from a 2009 law the Oklahoma Supreme Court struck down as unconstitutional in Douglas v. Cox Retirement Properties, Inc. — the same case that forced the rewrite of Section 993 — and this section reenacted the formula in 2013.

Frequently Asked Questions

Does the Oklahoma Health Care Authority always recover the full amount Medicaid paid?

No — its recovery is reduced to account for a proportional share of the procurement costs the recovering party incurred, if the claim was disputed and that party bore those costs.

How is the recovery calculated if Medicaid's payment is less than the settlement?

The Authority determines the ratio of procurement costs to the total recovery, applies that ratio to the Medicaid payment to find Medicaid's share of those costs, and subtracts that share from the Medicaid payment.

What if Medicaid's payment equals or exceeds the judgment or settlement?

The recovery amount is the total judgment or settlement minus the total procurement costs.

Why does the compiler's note mention a struck-down predecessor section?

Because this section's formula previously lived in former Section 994.1, derived from a 2009 law the Oklahoma Supreme Court declared unconstitutional in Douglas v. Cox Retirement Properties, Inc.; this section reenacted it in 2013.

Source & verification. Section text is reproduced verbatim from Title 12 of the Oklahoma Statutes, enacted by the Oklahoma Legislature. Last verified August 3, 2026. · Official source

Also known as: Medicaid recovery Oklahoma procurement costs formula12 O.S. § 994.2Oklahoma Health Care Authority subrogation calculationMedicaid lien reduction Oklahoma settlement