A New York trial court rules that New York City's Medicaid agency cannot assert a lien against a personal injury settlement between a Medicaid recipient and the city because the city failed to allocate any portion of the settlement proceeds to past medical expenses. Fried v. City of New York, Sup. Ct. N.Y. (Kings Cty.), No. 28770/02, Feb. 29, 2012.
Shlomit Fried was seriously injured when a van she was driving fell off of a pier owned byNew York City. After the incident, Fried began to receive Medicaid benefits from the New York City Department of Social Services (DSS). In 2002, Ms. Fried's mother, on her behalf, filed a lawsuit against the city and a host of other defendants, alleging that vehicle barriers should have been positioned on the perimeter of the pier. When the city settled the lawsuit without allocating a specific portion of the proceeds to past medical expenses, DSS asserted a $1.3 million lien against the settlement for Medicaid services provided to Ms. Fried.
Ms. Fried moved to set aside the lien, arguing that DSS did not provide proper notice, that DSS was not allowed to assert the lien directly against a personal injury claimant, and that the lien was invalid because DSS and the city were essentially the same parties and therefore the amount of the city's settlement offer would, by necessity, account for DSS's outstanding claim because DSS could not be expected to assert a claim against the city.
The Supreme Court of New York, Kings County, throws out most of Ms. Fried's claims but agrees with her final contention, finding that "it is reasonable to assume that the City as the settling party would adhere to policies regarding settlement instituted by DSS, another City agency . . . [T]here is no risk that counsel for the City would not include DSS as part of the settlement negotiations in order to deprive DSS of enforcement of its lien . . . [a]ccordingly, [the motion] is granted . . . to the extent that any settlement proceeds . . . are determined not to include compensation for past medical expenses to which any Medicaid lien could attach."
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