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U.S. Supreme Court Hears Med Mal Lawsuit Related to State Medicaid Expenses

The legal system is complex. When working with local families on these issues, each Chicago medical malpractice lawyer at our firm often explains the basic procedural elements of the case. In learning about the process many community members are most surprised by the challenges that remain even after a judgement or settlement is secured. While reaching a specific damage amount might seem to be the end of the mattter, sometimes it is only half of the battle. That is because there is much work to be done between earning the award on paper and actually ensuring as much of it as possible actually goes to those harmed.

Part of the problem arises from actually collecting the funds from insurance companies or the defendants themselves. Another part of the problem stems from protecting the award from others who may claim to have a stake in it.

In fact, the U.S. Supreme Court will soon hear a case on just that issue, related to the rights of certain states to take large amounts of an award for re-payment for Medicaid programs.

Med Mal SC Case
The underlying case involves a birth injury. A family filed suit after their daughter was born with severe medical issues that they claim was caused by mistakes made by medical professionals during her delivery. The girl is now twelve years old, and is deaf, blind, and unable to perform any basic functions for herself. Eventually that particular case was settled on the family’s behalf for $2.8 million.

However, that settlement did not end the matter. As a legal saga, it was just the beginning.

That is because the family in the case was using Medicaid services at the time. After the judgment, the state where the family lives claimed that nearly one million dollars, or one-third of the total award, was spent on the care up to that point for the girl. They put a lien on the judgement award. Fortunately, the family decided to fight back against this significant intrusion. The case has gone back and forth in court, and this week arguments will be made in front of the U.S. Supreme Court to settle the matter.

The underlying legal issues are somewhat complex. Essentially the plaintiff’s attorneys are arguing that the state law which allows the state to take such a massive share of the award contradicts federal law which does not allow state Medicaid programs to place liens on the property of the program participants. A judgement award is property.

However, adding a layer of complexity, one recent U.S. Supreme Court ruling clarified that the federal law only applies to liens on awards for pain and suffering, not medical expenses. In this case, though, the settlement does not clearly specify which part of the award is for medical expenses and which part is for pain and suffering.

So who get to decide? The state argues that they know how much they spent and so they should be free to take whatever that amounts to under the law. For their part, the family’s attorney suggest that the state’s drive to take as much of the settlement as possible, regardless of the consequences, cannot comply with federal law. The attorney summarized, “The threat that states may lose some Medicaid reimbursement funds would provide little comfort to the Medicaid beneficiary who is rendered homeless by a state statute that contravenes the Medicaid Act.”

It will be interested to follow the final resolution of this case, as depending on how the court rules, other states may take different looks at how they handle these reimbursement issues. Basic concepts of fairness and long-term stability for involved families may be on the line.

See Other Blog Posts:

Possible New Rules for IL Med Mal Contingency Fees

New Levin & Perconti Illinois Med Mal Settlement