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In its opinion filed on June 6, 2022, the United States Supreme Court held that the Medicaid Act permits a State (in this case, Florida) to seek reimbursement from settlement payments allocated for future medical care.

Medicaid requires participating States to pay for certain needy individuals’ medical costs and then to make reasonable efforts to recoup those costs from liable third parties. Consequently, a State must require Medicaid beneficiaries to assign the State “any rights . . . to payment for medical care from any third party.” 42 U. S. C. §1396k(a)(1)(A). That assignment permits a State to seek reimbursement from the portion of a beneficiary’s private tort settlement that represents “payment for medical care,” despite the Medicaid Act’s general prohibition against seeking reimbursement from a beneficiary’s “property,” §1396p(a)(1). The question the United States Supreme Court was asked to answer was whether §1396k(a)(1)(A) permits a State to seek reimbursement from settlement payments allocated for future medical care.

To satisfy its Medicaid obligations, Florida enacted its Medicaid Third-Party Liability Act, which directs the State’s Medicaid agency to “seek reimbursement from third-party benefits to the limit of legal liability and for the full amount of third-party benefits, but not in excess of the amount of medical assistance paid by Medicaid.” Fla. Stat. §409.910(4) (2017).1 To this end, the statute provides that when a beneficiary “accept[s] medical assistance” from Medicaid, the beneficiary “automatically assigns to the [state] agency any right” to third-party payments for medical care. §409.910(6)(b). A lien “for the full amount of medical assistance provided” then “attaches automatically” to any settlements related to an injury “that necessitated that Medicaid provide medical assistance.” §§409.910(6)(c), (6)(c)(1), 409.901(7)(a).

Rather than permit the State to recover from a beneficiary’s entire settlement, the statute entitles Florida to half a beneficiary’s total recovery, after deducting 25% for attorney’s fees and costs (i.e., 37.5% of the total). See §409.910(11)(f )(1). This amount presumptively represents the portion of the tort recovery that is for “past and future medical expenses.” §409.910(17)(b). Beneficiaries can rebut that presumption by proving with clear and convincing evidence “that the portion of the total recovery which should be allocated as past and future medical expenses is less than the amount calculated by [Florida’s] formula.”

The U.S. Supreme Court held: “Under §1396k(a)(1)(A), Florida may seek reimbursement from settlement amounts representing “payment for medical care,” past or future. Thus, because Florida’s assignment statute “is expressly authorized by the terms of . . . [§]1396k(a),” it falls squarely within the “exception to the anti-lien provision” that this Court has recognized. Ahlborn, 547 U. S., at 284.”

Source Gallardo v. Marstiller, 596 U. S. ____ (2022).

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