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Medicaid lien on malpractice settlement goes to Supreme Court

When injuries are sustained as a result of medical malpractice, treatment costs can add up quickly. Some victims of medical malpractice receive monetary settlements for their injuries. If the victim received medical services through the state-federal Medicaid program, Medicaid may stake a claim to a portion of the settlement. One family that has been granted a medical malpractice settlement is questioning whether Medicaid can legally stake a claim to part of the settlement. Hartford residents may find this story interesting, because it may directly affect settlements that occur in cases where Medicaid funds were used to provide treatment.

The suit stems from a Cesarean section delivery in 2000 in which the newborn girl sustained injuries that led to a cerebral palsy diagnosis. The child is blind and deaf and has other developmental problems. The doctor who performed the procedure had a history of drug abuse and voluntarily surrendered his medical license in 2000, but he claims he wasn't using drugs at the time of this birth.

In 2006, a $2.8 million settlement was reached. After estimating that Medicaid spent more than $1.9 million on the child, the state asserted a lien on $933,333.33, or one-third of the total settlement, to reimburse Medicaid as permitted by state law where the family lives.

The case is going to the Supreme Court to determine if Medicaid's claim is valid, as federal Medicaid law doesn't allow states to place liens on a Medicaid patient's assets, but pain and suffering funds in a settlement aren't covered as property. In this case, the settlement doesn't specify what portion is for medical care and what portion is for other factors, so it will be up to the Supreme Court to decide if the state's lien is valid.

Source: Hartford Courant, "Supreme Court case involves medical malpractice awards, Medicaid," Michael Doyle, Jan. 7, 2013

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