Supreme Court Rules Medicaid’s Secondary Payer Provision Applies to Future Medical Expenses


On June 6, the Supreme Court of Gallardo v. Marstiller resolved an ambiguity in Medicaid law that could have significant ramifications for those seeking to settle personal injury cases involving an applicant who is on Medicaid. The case involved a provision in Medicaid law requiring states to compel Medicaid beneficiaries to assign their rights “to third-party payment for medical care[.]The issue before the Court was whether this provision “permits a state to seek reimbursement of settlement payments awarded for future medical care.”

The case involved a 13-year-old who was permanently disabled after being hit by a truck and, as a result, became a Florida Medicaid recipient. Florida, rather than allowing the state to recover a beneficiary’s entire settlement, limits state recovery to no more than one-half of the settlement or judgment after deducting 25% for fees and expenses. of lawyer. The case ended in a settlement of $800,000, of which $35,367.52 was specifically designated to cover past medical expenses, and the remainder (after deducting attorneys’ fees) was presumably allocated by implication. future medical care. Florida, which had already spent more than $800,000 on medical care when the case settled, asked for $300,000, the full amount it was entitled to under its own law ($300,000 = 50% x 75% x $800,000).

The plaintiff sued the state, arguing that the Medicaid provision only allowed the state to recover past medical expenses and nothing allowed him to seek “recovery” for future medical expenses. The plaintiff argued that express federal legal authorization was required because another provision of Medicaid law prevented a state from placing a lien on any property of a beneficiary unless authorized to do so by federal law.

The Court, in holding that the Medicaid provision encompassed both past and future medical expenses, held that the absence of a limitation on past expenses alone in the statute is evidence that Congress did not intend that such limitation applies. The Court held that if Congress had wanted to distinguish between past and future payments, it could easily have done so, but did not.

The Court noted that the law contained two provisions dealing with civil liability. First, a mandatory provision of the state plan, limited third party liability to payments made in the past by a state health insurance plan: “payment [that] was done under the National Medical Assistance Plan for healthcare items or services furniture to an individual[.]” See 42 USC § 1396a(a)(25)(H). The other, at issue in this case, required a beneficiary to assign its third-party recovery to the state Medicaid plan. This one did not contain such a time limitation. See identifier. at 1396k(a)(1)(A).

Plaintiff-Plaintiff urged the Court to graft the “past tense only” language of the state plan provision onto the separate compulsory surrender provision. The Court not only declined to rewrite the law, but also held that the existence of this limitation elsewhere in the law was proof that Congress knew how to limit attribution to past medical payments and chose not to. in section 1396k(a)(1). )(A). Because the Court found that Section 1396k(a)(1)(A) authorized the recovery of future medical expenses, Florida’s assignment provision falls within the exception to the anti-lien provision.

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