Supreme Court to Determine Medical Malpractice Awards for Medicaid Beneficiaries

The Supreme Court is faced with a significant case involving medical malpractice payments awarded to Medicaid beneficiaries. The complicated case centers on a now 13-year-old child who suffered severe birth defects from an improper caesarian section delivery. Medical malpractice attorneys highlight the importance of this verdict, and will continue to report on its developments.

The child was born in 2000 at what is now the Catawba Valley Medical Center in Hickory, North Carolina. She suffered severe injuries during childbirth, which led to a cerebral palsy diagnosis. Cerebral palsy is a group of disorders involving brain and nervous system functions, and is caused by injuries or abnormalities of the brain. Due to doctors’ negligence, she is now deaf, blind, unable to talk, suffers seizures, requires periodic airway suctioning, and is largely immobile. The obstetricians involved in this case had a long history of drug use, and voluntarily surrendered his medical license in 2000.

The case brought before the Supreme Court pertains to state’s share in payments awarded to Medicaid beneficiaries in medical malpractice lawsuits. The child’s family, the Armstrong’s, was awarded $2.8 million in a 2006 settlement with the responsible obstetrician and medical center. At present, states are able to reclaim either one-third of a medical malpractice settlement or judgment awarded to a Medicaid patient, or the total Medicaid spending on the patient, whichever is lesser. In this case, Medicaid is requesting a payment of more than $900,000 as one-third of the settlement, although it estimated it spent over $1.9 million providing for the child. The settlement does not detail the exact amounts spent on the child’s medical care.

The Supreme Court will determine how much of the $2.8 million the Armstrong family will be able to keep. If the Court decides the amount to be anything other than the one-third share already asserted by Medicaid, the state’s existing laws will be called into question and ultimately reshaped. The Armstrong family is confident, especially after receiving the backing of the AARP and, surprisingly, the U.S. Department of Justice. The Obama administration and others in the Armstrong corner are arguing that the one-third claim in this case is excessive and arbitrary, and that cases of this type should be heard individually to determine specific allocations, rather than pre-determined by blanket regulations.

Justice Sonia Sotomayor seems to agree. Sotomayor argued that this one-third statute was not based on any empirical data. Several other justices, however, voiced skepticism that individual hearings can properly determine exact medical expenses, and that the one-third statute provided for efficiency in state malpractice cases.

Further complicating the issue, federal Medicaid laws currently forbid state governments from requesting claims from Medicaid patients’ personal property, which medical malpractice settlement amounts are considered to be. A former Supreme Court case, however, ruled that Medicaid is able to request claims from patient property, but only in the amount to cover medical care. As stated previously, the Armstrong’s settlement did not specify the amount spent on medical care. If the Armstrong’s are successful, North Carolina, along with officials in other eleven states supporting their case, fears that Medicaid patients will attempt to mask all their medical malpractice awards from state claims by classifying the amounts as anything other than medical care. Thus, the state would lose out on Medicaid reimbursements funds, which would send already-struggling states like North Carolina into further debt.

Needless to say, the Armstrong family found this argument to be impractical, uncompassionate, and unjust. Ultimately, whatever the Supreme Court decides will have an immense effect on the Armstrong’s, the North Carolina Medicaid program, and on similar present and future cases throughout the United States.

Our medical negligence attorneys at Pintas & Mullins Law Firm will continue to closely follow the developments of this case, which is expected to conclude in June. The rights of Medicaid beneficiaries deserve to be reviewed on a case-by-case basis, and the unique facts of each individual claim should always be considered.