Traffic Accident Involving Florida Girl Leads to Medicaid Reimbursement Dispute


Monday’s argument in Gallardo vs. Marstiller presents a simple question of statutory interpretation, examining whether a state Medicaid program can take funds that a Medicaid beneficiary receives as part of a third party tort settlement that injured the beneficiary. More precisely, when the state has paid pass medical expenses of the beneficiary, but the tort settlement compensates the beneficiary for the future medical expenses, can the State take the share of the compensation attributable to these future medical expenses to compensate for payments he has already made for pass expenses?

At this point, the statutory problem is relatively straightforward. The framework begins with the general rule that the state can do nothing to recover Medicaid payments from the beneficiary – it cannot impose a lien on the beneficiary’s property or otherwise sue to recover them. The main exception to this rule – the subject of Gallardo – intervenes when the beneficiary’s medical expenses result from an offense suffered at the hands of a third party. In this case, Medicaid law requires the state to “seek reimbursement” from the person who committed the offense, and it requires (in 42 USC § 1396k (a) (1) (A)) the recipient to award to the State “” no right… to the payment of medical care by a third party. Another provision (42 USC § 1396a (a) (25) (H)) explains that whenever “a payment has been made under the state plan for medical assistance … when a third party has the legal obligation to make payment for such assistance ”, the State acquires the rights to such payments.

The case is how to interpret these two provisions in the current situation where a current tort settlement includes compensation for past and future expenses – the past expenses that the state Medicaid plan has already paid for and the future expenses that it has already paid. has not yet paid. If the settlement amount provides less than the full payment of expenses (which is typical), then the settlement will not be sufficient to pay all of the recipient’s expenses. Previous Supreme Court decisions have made it clear that the state is only entitled to the portion of the settlement attributable to medical costs. This case will determine how these provisions will apply specifically to future medical expenses.

The Medicaid patient in the case, Gianinna Gallardo, was 13 when she was hit by a van after getting off a school bus in 2008. She suffered catastrophic injuries and remains in a persistent vegetative state. The Florida Medicaid program paid more than $ 862,000 for his medical care. Gallardo’s parents sued on his behalf, naming the driver of the truck, the owner of the truck and the school board, and they received a settlement of $ 800,000 (of which approximately $ 35,000 was awarded for medical expenses. earlier). The question now is how much of the total Florida settlement can recover.

Gallardo’s lawyers argue that Florida is not entitled to the portion of the settlement that is for future medical expenses because it makes no sense for Medicaid to be reimbursed for expenses it did not pay. They rely heavily on a reference to subsection (a) (25) (H) which limits state recovery to payments for “health items or services” for which “payment has been made in within the framework of the State plan ”. The federal government (which administers the Medicaid program) strongly supports this position.

Florida, on the other hand, points to the explicit statement in subsection (a) (1) (A) attributing to the state any “payment for medical care by a third party”. Because a payment for future medical care is clearly a “payment for medical care,” Florida maintains that it is within its rights to take that money, at least to the extent necessary to offset the payments it makes. has already done.

Florida argues that Medicaid law gives the state two distinct and overlapping rights: the right to an assignment of payment entitlements, which is more broadly framed to cover future expenses (in (a) (1) (A )); and the right of subrogation to recover payments it has already made, worded more narrowly and limited to past expenditures (in (a) (25) (H)). That one is broader than the other is not surprising in a law as complex and heavily amended as Medicaid. Gallardo and the federal government, on the other hand, find it illogical to interpret the provisions as so different in substance, insisting that a “holistic” reading of the law would give the two provisions the same substantive, narrower scope.

I would put this at the bottom of the list of cases that are likely to lead judges to violent disagreements, and at the top of the list of cases that can be resolved quickly. Both sides have at least one colorable textual argument, and the judges will likely see the underlying dynamic as equally balanced – between pressing state budget concerns and the plight of injured Medicaid patients. Perhaps the argument will shed some light on a likely resolution.

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