Wos v. E. M. A.

The Medicaid statute’s anti-lien provision, 42 U. S. C. 1396p(a)(1), pre-empts state efforts to take any portion of a tort judgment or settlement not “designated as payments for medical care.” A North Carolina statute requires that up to one-third of damages recovered by a beneficiary for a tortious injury be paid to the state to reimburse it for payments made for medical treatment on account of the injury. E. M. A. suffered serious birth injuries that require her to receive 12 to 18 hours of skilled nursing care per day and that will prevent her from working or living independently. North Carolina’s Medicaid program pays part of the cost of her ongoing care. E. M. A. and her parents filed a medical malpractice suit against the physician who delivered her and the hospital where she was born and settled for $2.8 million, due to insurance policy limits. The settlement did not allocate money among medical and nonmedical claims. The state court placed one-third of the recovery into escrow pending a judicial determination of the amount owed by E. M. A. to the state. While that litigation was pending, the North Carolina Supreme Court held in another case that the irrebuttable statutory one-third presumption was a reasonable method for determining the amount due the state for medical expenses. The federal district court, in E.M.A.’s case, agreed. The Fourth Circuit vacated. The Supreme Court affirmed. The federal anti-lien provision pre-empts North Carolina’s irrebuttable statutory presumption that one-third of a tort recovery is attributable to medical expenses. North Carolina’s irrebuttable, one-size-fits-all statutory presumption is incompatible with the Medicaid Act’s clear mandate View "Wos v. E. M. A." on Justia Law