This week the Supreme Court of the United States ruled 7-2 in Person v. Marstiller, Sec’y of the Fla. Agency for Health Care that states can take money Medicaid beneficiaries win in personal injury litigation for future medical expenses to recoup payments the program made for their prior care.
Justice Thomas delivered the majority 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,” 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.
In dissent, Justice Sotomayor, joined by Justice Breyer, disagreed with the majority’s interpretation of the Medicaid Act:
These provisions constitute a limited exception to the Act’s default rule prohibiting a State from imposing a lien against the beneficiary’s property or seeking to use any of that property to reimburse itself. Accordingly, a State may claim portions of the beneficiary’s tort award or settlement representing payments for the beneficiary’s medical care, but not those representing other compensation to the beneficiary(e.g., damages for lost wages or pain and suffering). . . . This statutory structure recognizes that it would be “‘fundamentally unjust’” for a state agency to “‘share in damages for which it has provided no compensation.’” . . . Today, however, the Court permits exactly that. It holds that States may reimburse themselves for medical care furnished on behalf of a beneficiary not only from the portions of the beneficiary’s settlement representing compensation for Medicaid-furnished care, but also from settlement funds that compensate the Medicaid beneficiary for future medical care for which Medicaid has not paid and might never pay. The Court does so by reading one statutory provision in isolation while giving short shrift to the statutory context, the relationships between the provisions at issue, and the framework set forth in precedent. The Court’s holding is inconsistent with the structure of the Medicaid program and will cause needless unfairness and disruption. (Emphasis added)
The dissent also notes that the ruling may reduce beneficiaries’ incentive to bring tort claims, may lead to states recovering fewer overall expenses, and also “undercuts Congress’ choice to allow Medicaid beneficiaries to place their excess recovery funds in Special Needs Trusts, protecting their ability to pay for important expenses Medicaid will not cover.”
Background in the case according to the syllabus: “Petitioner Gianinna Gallardo suffered catastrophic injuries resulting in permanent disability when a truck struck her as she stepped off her Florida school bus. Florida’s Medicaid agency paid $862,688.77 to cover Gallardo’s initial medical expenses, and the agency continues to pay her medical expenses. Gallardo, through her parents, sued the truck’s owner and driver, as well as the Lee County School Board. She sought compensation for past medical expenses, future medical expenses, lost earnings, and other damages. That litigation resulted in a settlement for $800,000, with $35,367.52 expressly designated as compensation for past medical expenses. The settlement did not specifically allocate any amount for future medical expenses.”
The full decision is available at: https://www.supremecourt.gov/opinions/21pdf/20-1263_g2bh.pdf
June 9, 2022 – K. Kertesz