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US Supreme Court Permits States to Seek Reimbursement from Settlement Payments for Future Medical Care

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.