Thirteen years ago, North Carolina resident Emily Armstrong was rendered blind, deaf, and mentally handicapped at the hands of the obstetrician who delivered her via Caesarian section. Her family sued the doctor, who had a history of drug abuse, and settled the medical malpractice claim for $2.8 million. Until recently, Medicaid could have seized one-third of that settlement.
Per state law, Medicaid was entitled to recover what it spent on the patient's care or one-third of the medical malpractice settlement, whichever was less. In this case, Medicaid paid $1.9 million for Armstrong's treatment, so it asserted a lien on $933,333.33, which amounted to one-third of the settlement.
In a 6-3 ruling last week, the Supreme Court said not so fast.
"If a state arbitrarily may designate one-third of any recovery as payment for medical expenses, there is no logical reason why it could not designate half, three-quarters or all of a tort recovery in the same way," Justice Anthony Kennedy wrote.
Eleven states, including Florida, Georgia, and Texas, filed briefs in support of North Carolina; however, according to Triangle Business Journal, "[F]our justices of the court’s liberal wing and Samuel Alito, generally considered a conservative, sided with Kennedy."
Now that $2.8 million settlement will go toward taking care of Emily, who has cerebral palsy and will need a nurse 12 to 18 hours a day for the rest of her life.
As Plaintiff's attorneys, we are all aware of the fact that Medicare, Medicaid and other ERISA backed health programs are entitled to recover in situations where the recipient recovers from a tort case. We are not arguing the legality of that here. It is refreshing to see that the US Supreme Court did what was right for this victim and we applaud their ruling.
About the Editors: The Shapiro Lewis Appleton & Favaloro personal injury law firm, whose attorneys work out of offices in Virginia (VA) and North Carolina (NC), edits the injury law blogs Virginia Beach Injuryboard, Norfolk Injuryboard, Eastern Shore Injuryboard, and Northeast North Carolina Injuryboard as a pro bono service.
Rick Shapiro has practiced personal injury law for over 30 years in Virginia, North Carolina, and throughout the Southeastern United States. He is a Board-Certified Civil Trial Advocate by the National Board of Trial Advocacy (ABA Accredited) and has litigated injury cases throughout the eastern United States, including wrongful death, trucking, faulty products, railroad, and medical negligence claims. During his three-decade career, Shapiro has won client appeals before the VA Supreme Court, VA Court of Appeals, NC Supreme Court, SC Supreme Court, WV Supreme Court, TN Supreme Court, and three times before the United States Court of Appeals for the Fourth Circuit, underscoring Shapiro’s trial achievements. In addition, he and his law firm have won settlements/verdicts in excess of $100 million. His success in and out of the courtroom is a big reason why he was named 2019 “Lawyer of the Year” in railroad law in U.S. News & World Report's Best Lawyers publication (Norfolk, VA area), and he has been named a “Best Lawyer” and “Super Lawyer” by those peer-reviewed organizations for multiple years. Rick was also named a “Leader in the Law, Class of 2022” by Virginia Lawyers Weekly (total of 33 statewide honorees consisting of lawyers and judges across Virginia). And in September 2023, Rick was selected as a recipient of the National Board of Trial Advocacy (NBTA) 2023 President’s Award. Although many nominations were submitted from across the country, Rick was just one of eight attorneys chosen by the prestigious National Board which certifies civil trial attorneys across the U.S. Rick was also recently named to Virginia Lawyers Weekly 2024 Virginia’s Go To Lawyers Medical Malpractice. The attorneys awarded this honor are nominated by their colleagues and chosen by a panel from the publication.
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