SUBROGATION-MEDICAID-STATE PAYMENTS

June 10th, 2022 by Rieders Travis in Miscellaneous

Gallardo v. Marstiller, 2022 U.S. LEXIS 2683 (June 6, 2022) (Thomas, J.)  JUSTICE THOMAS delivered the opinion of the Court. Medicaid requires participating States to pay for certain needy individuals’ medical costs and then to make reasonable efforts to recoup those costs from liable third parties. Consequently, a State must require Medicaid beneficiaries to assign the State “any rights . . . to payment for medical care from any third party.” 42 U. S. C. §1396k(a)(1)(A). That assignment permits a State to seek reimbursement from the portion of a beneficiary’s private tort settlement that represents “payment for medical care,” ibid., despite the Medicaid Act’s general prohibition against seeking reimbursement from a beneficiary’s “property,” §1396p(a)(1). The question presented is whether §1396k(a)(1)(A) permits a State to seek reimbursement from settlement payments allocated for future medical care. We conclude that it does.  The Medicaid Act also sets a limit on States’ efforts to recover their expenses. The Act’s “antilien provision” prohibits States from recovering medical payments from a beneficiary’s “property.” §1396p(a)(1); see also §1396a(a)(18) (requiring state Medicaid plans to comply with §1396p). Because a “beneficiary has a property right in the proceeds of [any] settlement,” the anti-lien provision protects settlements from States’ reimbursement efforts absent some statutory exception. Wos v. E. M. A., 568 U. S. 627, 633, 133 S. Ct. 1391, 185 L. Ed. 2d 471 (2013). State laws “requir[ing] an assignment of the right . . . to receive payments [from third parties] for medical care,” as “expressly authorized by the terms of §§1396a(a)(25) and 1396k(a),” are one such exception. Arkansas Dept. of Health and Human Servs. v. Ahlborn, 547 U. S. 268, 284, 126 S. Ct. 1752, 164 L. Ed. 2d 459 (2006). Accordingly, a State may seek reimbursement from the portion of a settlement designated for the “medical care” described in those provisions; otherwise, the anti-lien provision prohibits reimbursement. Id., at 285, 126 S. Ct. 1752, 164 L. Ed. 2d 459.  To satisfy its Medicaid obligations, Florida has enacted its Medicaid Third-Party Liability Act, which directs the State’s Medicaid agency to “seek reimbursement from third-party benefits to the limit of legal liability and for the full amount of third-party benefits, but not in excess of the amount of medical assistance paid by Medicaid.” Fla. Stat. §409.910(4) (2017).1 To this end, the statute provides that when a beneficiary “accept[s] medical assistance” from Medicaid, the beneficiary “automatically assigns to the [state] agency any right” to third-party payments for medical care. §409.910(6)(b). A lien “for the full amount of medical assistance provided” then “attaches automatically” to any settlements related to an injury “that necessitated that Medicaid provide medical assistance.” §§409.910(6)(c), (6)(c)(1), 409.901(7)(a). Rather than permit the State to recover from a beneficiary’s entire settlement, the statute entitles Florida to half a beneficiary’s total recovery, after deducting 25% for attorney’s fees and costs (i.e., 37.5% of the total). See §409.910(11)(f )(1). This amount presumptively represents the portion of the tort recovery that is for “past and future medical expenses.” §409.910(17)(b). Beneficiaries can rebut that presumption by proving with clear and convincing evidence “that the portion of the total recovery which should be allocated as past and future medical expenses is less than the amount calculated by [Florida’s] formula.” Ibid.  Gallardo argues that the Eleventh Circuit erred by permitting Florida to seek reimbursement for medical expenses from settlement amounts representing payment for future medical care. According to Gallardo, the Medicaid Act’s anti-lien provision in §1396p forecloses recovery from settlement amounts other than those allocated for past medical care paid for by Medicaid. Thus, Gallardo concludes, the anti-lien provision preempts any state law that permits additional recovery. We disagree. Under §1396k(a)(1)(A), Florida may seek reimbursement from settlement amounts representing “payment for medical care,” past or future. Thus, because Florida’s assignment statute “is expressly authorized by the terms of . . . [§]1396k(a),” it falls squarely within the “exception to the anti-lien provision” that this Court has recognized. Ahlborn, 547 U. S., at 284, 126 S. Ct. 1752, 164 L. Ed. 2d 459.  In sum, because the plain meaning of §1396k(a)(1)(A), informed by statutory context, allows Florida to seek reimbursement from settlement amounts representing past or future “payments for medical care,” Florida’s assignment provision falls within the “exception to the anti-lien provision.” Ahlborn, 547 U. S., at 284, 126 S. Ct. 1752, 164 L. Ed. 2d 459.

Attorney Cliff Rieders

Attorney Cliff RiedersCliff Rieders is a Nationally Board Certified Trial Lawyer practicing personal injury law. A large part of his practice involves multi-district litigation, including cases related to pharmaceuticals, vitamin supplements and medical devices. He is admitted in several state and federal courts, as well as the Supreme Court of the United States. Rieders is the past regional president of the Federal Bar Association and is a life member of the distinguished American Law Institute, which promulgates proposed rules adopted by many state courts. He is a past president of the Pennsylvania Association for Justice, formerly Pennsylvania Trial Lawyers Association. As a founder of the Pennsylvania Patient Safety Authority, he served on the Board for 15 years.

Not only has Rieders held many highly esteemed, leadership positions, he authored legislation related to the Patient Safety Authority and the Mcare Act, which governs medical and hospital liability actions in Pennsylvania. He authored texts upon which both practitioners and judges rely, including Pennsylvania Malpractice Laws and Forms, and Financial Responsibility Law Issues in Pennsylvania, the latter governing auto and truck collisions in Pennsylvania. In addition, he wrote several books on the practice of law in Pennsylvania regarding wrongful death and survivor actions, insurance bad faith, legal malpractice claims and worker rights, among others. Rieders also serves as a resource to practitioners as a regular speaker for Celesq, an arm of the world’s largest legal publisher, Thomson Reuters West Publishing.

As recognition of his wide range of contribution to his profession and of his dedication to protecting the rights of his clients, he received numerous awards, among them the George F. Douglas Amicus Curiae Award, the Milton D. Rosenberg Award, the B’nai B’rith Justice Award, and awards of recognition from the Pennsylvania Trial Lawyers. [ Attorney Bio ]

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