Supreme Court Splits 4-3 In Medicaid Lien Case

Yesterday, in Andrews v. Haygood, the NC Supreme Court (reviewing a divided COA decision) split 4-3 on this issue: when a Medicaid beneficiary settles with a tortfeasor for a lump sum and the settlement terms don't establish the portion allocated to past medical expenses (versus future medical expenses, pain and suffering, etc.), can the State, consistent with federal Medicaid law, assert a lien on the settlement proceeds for the full amount of past medical expenses it paid under Medicare? Or must there be a determination of what portion of the settlement is attributable to past medical expenses, with the lien limited to that amount? Really the case came down to how to read Arkansas Dep't of Health & Human Servs. v. Ahlborn, 547 U.S. 268 (2006), which held that Arkansas violated federal Medicaid law by imposing a lien on a settlement in amount greater than the stipulated amount of medical expenses.

In yesterday's case, the majority, in an opinion by Justice Newby, held that Ahlborn "does not mandate a judicial determination of the portion of a settlement from which the State may be reimbursed for prior medical expenditures." Justice Hudson, joined by Justices Brady and Timmons-Goodson, disagreed. The dissent concluded that when settling parties haven't allocated settlement proceeds to medical expenses, "the only way to ensure that the application of the statute complies with Ahlborn is to provide for such an allocation."

This might be one for the U.S. Supreme Court to resolve.