A federal district court rules that a state Medicaid agency may recover the cost of a beneficiary's medical care from the portion of her personal injury settlement that was allocated to medical expenses, regardless of whether the funds were allocated to past or future medical care. Perez v. Henneberry (D. Colo., No. 09-cv-01681-WJM-MEH, April 26, 2011).
Colorado resident Isabelle Perez was seriously injured at birth and subsequently settled a lawsuit against her doctor and the hospital where she was born for an undisclosed amount. The settlement did not allocate specific funds to past or future medical expenses or for pain and suffering. When Ms. Perez settled her case against the hospital, the state asserted a second claim for $736,673.71 in past-due medical expenses. Ms. Perez then filed suit against the state in federal court seeking a declaration that Colorado's Medicaid recovery statute violated the anti-lien provisions of the Medicaid Act and that the state could recover only its costs from the portion of her settlement that was allocated to past medical expenses.
Both sides filed motions for summary judgment, with both claiming that the U.S. Supreme Court's decision in Arkansas Department of Health and Human Services v. Ahlborn (547 U.S. 268, 2006) supported their arguments. Ms. Perez claimed that Ahlborn allowed recovery only from the portion of her settlement that was allocated to past medical expenses, and she proposed using the so-called "Ahlborn formula" to reduce the amount that the state could recover. The state argued that nothing in Ahlborn prevented it from asserting a claim against the entire portion of the settlement that was allocated to medical expenses, regardless of whether those expenses were for past or future care.
The U.S. District Court for the District of Colorado grants the majority of the state's motion for summary judgment. The court finds that "the Department's lien is tantamount to a forced assignment of the right to recover that portion of the settlement that represents payments for medical care, which under Ahlborn, is consistent with both the third party liability provisions and the anti-lien provisions in the federal Medicaid statute." The court also rules that "Ahlborn does not require, as Plaintiff suggests, that in seeking this reimbursement the Department is limited to funds allocated to past medical expenses. The Ahlborn Court made no such distinction. . . Nothing in 42 U.S.C. 1396p indicates that the State may not seek recovery of its payments from a Medicaid recipient's total award of damages for medical care whether for past, present, or future care."
For the full text of this decision, go to: https://attorney.elderlawanswers.com/full-text-of-opinion-in-perez-v-henneberry-d-colo-no-09-cv-01681-wjm-meh-april-26-2011-9164
For an ElderLawAnswers summary of an earlier ruling in the case, click here.
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