Arkansas Dept. of Human Services v. Ahlborn
Ahlborn sued the Arkansas Department of Human Services (ADHS) in a dispute concerning the extent to which the money she received as damages from a tortfeasor may be taken by ADHS as reimbursement for the cost of medical care provided to Ahlborn by the Medicaid program. Ahlborn was seriously injured in an accident that left her permanently disabled. She applied for medical benefits under the Arkansas Medicaid program, which required her to assign to ADHS her “right to any settlement, judgment, or award” she might receive from third parties, “to the full extent of any amount which may be paid by Medicaid for the benefit of the applicant.” Ark. Code Ann. ยง 20-77- 307(a). In total, ADHS provided Medicaid benefits to Ahlborn in the amount of at least $215,645.30.
Ahlborn sued the tortfeasor for damages, including the cost of her past medical care, loss of earnings and working time, pain and suffering, and the permanent impairment of her ability to earn in the future. She eventually settled with the tortfeasor for a lump sum of $550,000, which did not allocate damages among Ahlborn's claims. The ADHS, which was not a party to the settlement, asserted a lien against Ahlborn's settlement for the full amount of Medicaid benefits provided.
Ahlborn sued, arguing that ADHS can only recover that portion of her settlement representing payment for past medical expenses. The sole issue in the case was one of statutory construction: whether federal Medicaid statutes, which provide for the assignment of rights to third-party payments, but prohibit placing a lien on a Medicaid recipient’s property, limit ADHS ’s recovery to the portion of the settlement for medical expenses.The parties stipulated that an estimate of Ahlborn’s total damages was $3,040,708.12 and agreed that ADHS would recover $215,645.30 if it prevailed on the statutory construction issue, but only $35,581.47 if Ahlborn prevailed. The district court granted summary judgment for ADHS. The Eighth Circuit Court of Appeals reversed, holding that Ahlborn’s right to a settlement that may be received from a third party, which the Arkansas statute required her to assign to the ADHS, was her “property"; that the federal anti-lien statute is intended to protect all of Ahlborn’s nonassigned property from recovery by ADHS; and finally that the Arkansas statutes were invalid to the extent that they required Ahlborn to assign her rights to recover third party liability payments for matters other than the cost of her medical care and services.
Question Presented:
Whether federal Medicaid law, which requires that a medical assistance recipient assign to the state any right to payment from a third party who is liable
for the recipient's medical expenses, and which also prohibits the placement of a pre-death lien upon a recipient's "property," entitles the state to full reimbursement from personal injury
settlement proceeds of Medicaid benefits paid on the recipient's behalf, regardless of what portion of the settlement proceeds are designated as compensation for medical care?
