Medicaid Recovery From Tort Settlement Not Shielded by Ahlborn

In this case of first impression, a New York court finds that the Department of Social Services may use settlement proceeds stemming from a fatal car crash to recover unrelated Medicaid assistance it paid on the elderly decedent's behalf, and that limitations on recovery rights against a Medicaid recipient's tort action that the U.S. Supreme Court outlined in Ahlborn do not apply. In the Matter of the Estate of Ramirez(N.Y. Sur. Ct., No. 283-M/o6, Nov. 29, 2006).

Virginia Ramirez died in a car crash at age 87. Her heirs sought to accept a settlement for Ms. Ramirez's personal injury and wrongful death from the defendant driver's insurance carrier. The New York Department of Social Services (DSS) objected and asserted that it was entitled to recover from Ms. Ramirez's estate for Medicaid assistance it had paid on her behalf for unrelated medical care between 1995 and 2005. The administratrix of Ms. Ramirez's estate filed a motion for summary judgment, asserting that since the proposed tort action settlement did not include any recovery for medical expenses, under Arkansas Department of Health and Human Services, et al v. Ahlborn, 547 U.S. ____ (2006), DSS' claim was barred by the anti-lien provision of federal Medicaid law.

The surrogate Court of New York denies the motion for summary judgment and rules that federal estate recovery law requires DSS to seek recovery of medical assistance paid to an individual age 55 or older. "DSS," the court writes, "would be required to assert its claim against the decedent's estate...regardless of whether the estate's assets arose from a personal injury recovery, a lottery, or other source." However, because DSS is limited to relief only from the personal injury settlement, not the wrongful death portion, the court directs the parties to appear to consider factual issues regarding allocation of the settlement.

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