Byte of Prevention Blog

by Jay Reeves |

U.S. Supreme Court Ruling Addresses Medicaid Liens in Tort Settlements

If your practice areas include litigation, insurance or healthcare law, you should know about the recent U.S. Supreme Court opinion in Gallardo v. Marstiller. The ruling, handed down on June 6, 2022, allows states to pursue Medicaid reimbursement for tort settlements that cover future medical expenses. Funds in the settlement agreement designated for future medical care could be subject to a Medicaid lien.

Lawyers Mutual issued a Risk Management Alert notifying North Carolina lawyers of the ruling.

Read the full opinion in Gallardo v. Marstiller, Sec’y of the Fla. Agency for Health Care, 2022 U.S. Lexis 2683.

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US Supreme Court Permits States to Seek Medicaid Reimbursement for Future Medical Care

Following is the full text of the Lawyers Mutual Risk Management Alert: 

On June 6, 2022, the US Supreme Court issued its opinion in Gallardo v. Marstiller, Sec’y of the Fla. Agency for Health Care, 2022 U.S. Lexis 2683, and held that the Medicaid Act permits States to seek reimbursement from settlement payments allocated for future medical care. The full opinion can be read here.

The case involved a settlement of $800,000 for injuries a minor received when she was hit by a truck after stepping off a school bus. Under Florida’s statutory formula, the State’s presumptive allocation was $300,000 of the settlement amount. The State had already paid approximately $862,000. The settlement allocated $35,367.52 to past medical expenses and no specific amount to future medical expenses. Florida argued that it could seek reimbursement from settlement monies for both past and future medical expenses and was not limited to the $35,367.52 allocated for past expenses. The Supreme Court held that Florida Medicaid could seek reimbursement from any settlement funds representing payment for medical expenses-whether past or future medical expenses.

North Carolina attorneys should be cognizant of this new opinion and understand that any monies designated for future medical care in a tort settlement could be subject to a Medicaid lien. Specifically allocating part of a settlement to past medical expenses will not necessarily limit a State’s claim for Medicaid reimbursement. If you suspect your client is a Medicaid beneficiary, write to the North Carolina Department of Human Resources, Third-Party Recovery Section, to determine if there is lien and, if so, the amount of the lien. If you contend there are any unrelated payments, you can contest those charges and try to negotiate the amount of the lien with the Third-Party Recovery Section. 

Sources: Person v. Marstiller, Sec'y of the Fla. Agency for Health Care (


US Supreme Court Permits States to Seek Reimbursement from Settlement Payments for Future Medical Care - Lawyers Mutual Insurance Company (


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About the Author

Jay Reeves

Jay Reeves practiced law in North Carolina and South Carolina. He was Legal Editor at Lawyers Weekly and Risk Manager at Lawyers Mutual. He is the author of The Most Powerful Attorney in the World, a collection of short stories from a law life well-lived, which as the seasons pass becomes less about law and liability and more about loss, love, longing, laughter and life's lasting luminescence.

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