Supreme Court: Some Plaintiffs Can Retain More Of Award

Good news to injured people who rely on Medicaid for payment of their medical bills: today the United States Supreme Court invalidated a North Carolina law that required that one-third of the total tort recovery had to be paid to the state for expenses it paid.

The Court relied upon its prior ruling in 2006 where Heidi Alhborn, 19, had been severely injured in an automobile collision in Arkansas. Part of her medical bills was paid by Medicaid. The case settled for $550,000.00, the limits of available insurance policies, and far less than the stipulated value of $3 million. Even though it had done nothing to procure the award, the state asserted a lien and demanded full repayment. Ms. Ahlborn appealed. The Supreme Court held that the state could only recover a percentage allocated to medical expenses.

Before the Ahlborn decision, state governments refused to reduce their reimbursement (subrogation) interests — even if that took most or even all of the victim’s recovery.

Today’s decision, WOS v. E.M.A., 568 U.S. ___, could have reversed or curtailed the effects of Ahlborn. This medical malpractice case was catastrophic (a brain damaged baby who requires lifetime round-the-clock medical care). The true value of the damages was estimated to be $42 million. However due to limited insurance policies, huge medical bills and other expenses, the victim’s family recovered $2.8 million. The State of North Carolina sought one-third of the total award and the family appealed.

The Supreme Court followed Ahlborn and authorized only a 1/6 reimbursement of medical bills. The decision, written by Justice Kennedy, was decided on a 6-3 vote supported by the liberal wing as well as by Justice Alito. Chief Justice Roberts filed a dissenting opinion and was joined by Justice Scalia and Justice Thomas. The oral arguments were spirited, especially with the questioning by the newest member of the Court, Justice Sotomayor.

I follow the decisions of the federal and state courts to make sure that my clients get the money they deserve. We recently reduced a Medicaid lien using the Ahlborn formula.

Please contact my office if you have been injured in a Dallas-Fort Worth area motor vehicle collision and have any questions about your claim.

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