Medicaid liens and the Supreme Court

The U.S. Supreme Court will determine if a state can impose a lien on a Medicaid recipient’s lump-sum personal injury settlement to recoup some of its expenses.

The justices on Wednesday agreed to take up the case of Delia v. E.M.A., which asks the justice to decide if the Medicaid Act’s anti-lien provision trumps North Carolina law.

Federal law requires participating states to try to recoup some of the health-care expenses paid to tort victims.

To enforce that requirement when the victim wins a settlement or judgment, North Carolina allows the state to assert a lien on one-third of the recipient’s settlement or the state’s actual expenses, whichever is lower.

In the underlying lawsuit, the parents and legal guardian of an infant who was severely disabled during delivery won a $2.8 million medical malpractice settlement.

Due to injuries at birth, the child is legally deaf and blind, and can’t walk, sit, crawl or talk. She is mentally retarded and has a seizure disorder, and requires between 12 and 18 hours of daily nursing care.

The state claimed it was entitled to one-third of that amount, since it had paid $1.9 million in medical and health-care expenses on the girl’s behalf.

But her parents argued that the Medicaid Act’s anti-lien provision bars the state from placing a lien on their settlement.

In its ruling for the secretary of the North Carolia’s Department of Health and Human Services, the federal district court relied heavily on the state Supreme Court’s decision to uphold North Carolina’s third-party liability laws.

The 4th Circuit vacated that decision, however, saying it disagreed with the state high court’s analysis, as adopted by the district court. It ruled that North Carolina’s one-third cap on the state’s recovery “is in fatal conflict with federal law.”

The panel’s decision rested on a 3rd Circuit opinion in a similar case, and on the Supreme Court’s 2006 decision in Arkansas Department of Health & Human Services v. Ahlborn, which rejected third-party liability laws in Arkansas.

The nation’s high court agreed to settle the conflict between the state and federal appellate courts by deciding if North Carolina’s law is similarly preempted by federal law.

via Courthouse News Service.

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