The US Supreme Court recently heard oral arguments in a North Carolina case that could decide how 34 states recover for Medicaid benefits when the Medicaid recipient obtains a financial recovery from a negligent third party (Delia v. E.M.A., No. 12-98 (U.S. argued Jan. 8, 2013).
The North Carolina case involved a 13 year old little girl who suffered catastrophic injuries at birth as the result of medical negligence. The case settled for a discounted value ($2.8 million) in part due to the doctor’s limited insurance coverage. Her lawyers argued that the girl’s damages exceeded $42 million. Medicaid successfully argued that they were entitled to one-third of the little girls’ recovery as reimbursement for money they had paid toward her medical care. The little girl’s attorneys argued that Medicaid was not entitled to assert a lien against the recovery based on Federal preemption.
The case is significant for anyone who is a Medicaid recipient and who suffers injury as a result of someone else’s negligence. In tort cases where there is a Medicaid lien, there is often a battle over how much does the recipient have to pay back to Medicaid. In most cases where North Carolina Medicaid has paid benefits, the injured person ends up having to pay back all of the money that North Carolina Medicaid paid toward the injured person’s medical expenses. In cases where the amount recovered by the injured person is less than the full value of the case (e.g. where there is not sufficient insurance coverage), the Medicaid Lien is reduced to one-third of the recovery based on the North Carolina Lien Reduction Statute.