Florida can recover money from a settlement award won by an injured Medicaid patient, the U.S. Supreme Court ruled Monday.
The 7-2 decision written by Justice Clarence Thomas ruled the federal Medicaid Act allows states to recover settlement awards for future medical expenses. Although the federal law prohibits states from placing a lien on a patient’s “property,” there is an exemption for settlements involving awards for medical expenses. Thomas rebutted arguments that the exemption only applies to damages for past medical expenses, not for future medical expenses.
“The plain text of (the Medicaid Act) decides this case,” Thomas wrote. “Nothing in this provision purports to limit a beneficiary’s assignment to ‘payment for’ past ‘medical care’ already paid for by Medicaid.”
Justice Sonia Sotomayor wrote a dissent, backed by Justice Stephen Breyer, arguing the majority ruling unfairly allows states to receive money for future expenses that might not be covered by Medicaid.
“The Court’s holding is inconsistent with the structure of the Medicaid program and will cause needless unfairness and disruption,” Sotomayor wrote.
The case centered on a Lee County student, Gianinna Gallardo, who was 13 in 2008 when she was hit by a truck as she exited a school bus. She endured catastrophic injuries and is permanently disabled. Florida’s Agency for Health Care Administration, which runs the state’s Medicaid program, paid $862,688.77 for Gallardo’s initial medical care after the incident and continues to pay for her medical expenses.
Gallardo’s parents sued the truck’s owner and driver, and the Lee County School Board, winning a settlement of $800,000, with $35,367.52 expressly for prior medical expenses. AHCA put a lien on Gallardo’s settlement award for $300,000, or 37.5% of the award, according to state law allowing the state to recover benefits from liable third parties.
AHCA routinely recovers settlement awards to pay for Medicaid expenses and the opinion confirms its practices surrounding Medicaid settlement liens.
“The Agency feels the Supreme Court opinion speaks for itself,” AHCA spokeswoman Kayla McLaughlin wrote in an email.
Gallardo’s family sued Florida, arguing the federal Medicaid Act prohibits the state from recovering money from a settlement intended to pay for future medical expenses to pay for past medical expenses. A district court sided with Gallardo, but the 11th Circuit Court of Appeals reversed the decision. Monday’s ruling upheld the appellate decision.