A New York trial court does not allow a Medicaid recipient who signed a settlement agreement to reduce Medicaid liens based on the U.S. Supreme Court’s Ahlborn decision because the settlement stipulated that Medicaid liens would be paid in full. Morales v. New York City Health and Hospitals Corp. (N.Y. Sup.Ct., N.Y. Co., No. 101916/05, Dec. 6, 2011).
Delia Morales was injured and received Medicaid benefits to help pay for her medical care. She filed a medical malpractice lawsuit against the hospital and doctors that treated her, and the states of New York and Connecticut filed Medicaid liens. During negotiations to settle her medical malpractice claim against the hospital, she asked for an increase in the settlement proceeds in order to satisfy the Medicaid liens. The increase was granted, and the settlement was approved.
After the settlement was finalized, Ms. Morales asked the court to reduce the Medicaid liens based on Arkansas Department of Health and Human Services v. Ahlborn.
The New York Supreme Court, New York County, denies Ms. Morales's motion, holding that the Medicaid liens cannot be reduced. According to the court, where "the parties stipulated that the settlement requires that all Medicaid liens could be satisfied in full, such an agreement is not violative of Ahlborn." The court notes that "Ahlborn should not be used as a device to collaterally attack the reasonableness of an infant's settlement where a court has already signed an infant's compromise order approving the settlement. In short, if plaintiff's counsel believed that the settlement offer was inadequate, he should not have settled the case."
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