The states support the Medicaid program to obtain legal settlements from members


On Monday, 14 states urged the U.S. Supreme Court to allow Medicaid agencies to access any part of a legal settlement designed to pay for medical expenses by registrants.

in a About Friends of the Court The Republican states, led by Ohio and Utah, believe that Medicaid must be able to collect fees from any part of the infringement settlement that is paid on behalf of medical services, whether it is future costs or past treatment costs.

The judges booked Hear the debate on this issue in January, Their decision will set the standard for state Medicaid programs across the country.

The case stems from a complaint filed by Gianinna Gallardo’s parents. Gianinna Gallardo was in a permanent vegetative state after being hit by a truck in the next school bus in 2008. Gallardo’s parents sued the truck owner, driver, and the Li County School Board and eventually reached a $800,000 settlement.

As part of the transaction, Gallardo’s parents prevented the Florida Health Care Administration from collecting any payments for her future care from the settlement. But the state’s Medicaid program stated that it was entitled to receive $300,000 from the transaction, including part of the settlement fund reserved for Gallardo’s future medical needs.

In 2017, U.S. District Judge Mark Walker ruled in favor of parents, stating that the agency can only recover settlement payments related to past medical expenses. The U.S. Court of Appeals for the 11th Circuit overturned this decision and, on the side of FAHCA, ruled that the federal Medicaid Act requires individuals to provide the state with full payment rights before receiving care. The 11th Circuit stated that this rule keeps the Medicaid program financially stable.

In another case, the Florida Supreme Court ruled that FAHCA can only recover settlement funds from past medical expenses.

The states are pushing the courts to support the 11th Circuit, saying that federal laws prevail over state laws and that a ruling in favor of Gallardo could lead to Medicaid bankruptcy.

“read [the Medicaid Act] Otherwise, the parties to the settlement will be authorized to make a ruling around the restorative rights of the states by marking the entire (or almost the entire) settlement as payment for “future care,”” the amicus brief said.

The National Assembly of State Councils, the National League of Cities, the Association of Government Finance Officials, and other agencies also supported the Florida Medicaid Agency with similar amicus curiae briefings.



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