Don’t Let Medicaid Reimbursement Impact Settlements – SCOTUS Rules Medicaid Can Seek Reimbursement for Future Medical Expenses

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Information about Don’t Let Medicaid Reimbursement Impact Settlements – SCOTUS Rules Medicaid Can Seek Reimbursement for Future Medical Expenses

Phil Puccio

The US Supreme Court recently expanded states’ ability to reimburse accident victims’ healthcare costs under the Medicaid Act. The case, Gallardo v. Marquise, concerned injuries sustained by a plaintiff when she was struck by a motor vehicle while getting off a school bus in Florida. Florida’s Medicaid agency paid $862,688.77 for Ms. Gallardo’s initial medical expenses. Ms. Gallardo, through her parents, sued the owner and driver of the vehicle and the county school board that controlled the school bus. This lawsuit was eventually settled for $800,000.00. The settlement agreement specifically stated that $35,367.52 of the settlement was intended as indemnification past medical expenses. No amount was earmarked for this future medical expenses. Florida argued that the Medicaid Act extends to medical expenses that the state is likely to pay in the future. The Supreme Court agreed, ruling that states can also seek reimbursement from settlements future Medical expenses that you have not yet paid.

The Medicaid law requires participating states to pay for the medical expenses of eligible individuals and then use reasonable efforts to recover those expenses from liable third parties. Following Gallardoa state Medicaid program can now seek reimbursement for medical expenses it has paid or likely to pay in the future on behalf of an injured party, a portion of any compensation allocated to “medical expenses” – even future medical expenses that the state’s Medicaid program has not yet paid (and may never pay).

In addition to the federal Medicaid statute, the Supreme Court relied on Florida’s Medicaid Third-Party Liability Act to interpret the facts. Florida law uses a formula that assumes that 37.5% of a total bill represents the portion for “past and future medical expenses” with no clear and convincing evidence that the portion should be lower. The result a Gallardo was that the Florida Medicaid program was entitled to $300,000 in lieu of the approximately $35,000 listed in the Settlement Agreement. As a result, the cash actually accrued to the plaintiff was significantly reduced by comparison.

Why is that important?

From the plaintiff’s or the defendant’s perspective, a party’s goal in reaching a settlement is to fully resolve the underlying dispute. As far as that Gallardo By creating uncertainty about how much money will actually get to a plaintiff, the case is likely to impact settlement negotiations. At the very least, an informed attorney should be familiar with it Gallardo and the applicable state law for Medicaid reimbursement in developing language in a settlement agreement.

If a plaintiff has received Medicaid benefits, parties seeking to settle a dispute should include appropriate language in any settlement agreement Everyone Medical expenses, both in the past and in the future. In states that have adopted a contingent formula for these expenses, the parties should be familiar with the formula and carefully negotiate settlement agreements to achieve the desired outcome for the parties.

What is the impact in Nebraska?

Nebraska’s equivalent of Florida’s Third-Party Liability Act places the onus of payment on the third party to pay the Department of Health and Human Services directly upon receipt of notification that a plaintiff has received medical care funds. See Neb. Rev. Stat. §§ 68-716, 921-925. By claiming these funds, a plaintiff grants the state a right of recourse. ID. This puts the duty on the defendant to certify the amount that the State is claiming from him and possibly the amount that the State will demand for future expenses and to set aside settlement funds that will go directly to the State for that amount to settle.

Importantly, Nebraska’s statute does not contain a formula similar to Florida’s, which removes the presumption of a set amount as reasonable. Nevertheless, the lawyer should be aware of the obligations under Gallardo and Nebraska law to ensure that there will be no problems with Medicaid reimbursement funds after the settlement agreement is signed.

What is the impact in Iowa?

The Iowa equivalent of Florida’s Third-Party Liability Act contains language that the Iowa Department of Human Services has a lien on any monetary claim a Medicaid recipient has against a third party. Iowa Code § 249A.54. The state must register the lien with the clerk of the district court and send a notice to the plaintiff’s attorney. ID. Importantly, Iowa law requires that a notice be sent prior to the final settlement between the parties. ID. The state can then assert its lien against any liable third party. ID.

As in Florida, the Iowa statute contains a formula for calculating the amount paid to the state. Attorneys’ fees and costs are deducted from the total amount received by the plaintiff, then one-third of the remaining amount is paid to the plaintiff. Iowa Code § 249A.54(5). The state is then paid from the remaining amount after the deductions. ID.

Conclusion

The take away from Gallardo is that reimbursement to state Medicaid funds can greatly affect the actual dollars a plaintiff receives as a settlement. In addition, states often burden defendants with the payment of outstanding balances. In resolving a case, all parties attempt to bring a dispute to a final resolution. understanding Gallardo is an essential tool to successfully achieve this result.

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Original Source: https://www.ldmlaw.com/2022/06/dont-let-medicaid-reimbursement-impact-settlements-scotus-rules-medicaid-can-seek-reimbursement-for-future-medical-expenses/
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