The tragic case of one North Carolina family was recently deliberated before the U.S. Supreme Court in an important test of how states will handle medical malpractice cases for Medicaid beneficiaries. The case involves a couple, Sandra and William Armstrong, and their 12-year-old daughter who was left blind, deaf, mute and immobile after a botched delivery by, what the parents said, was a negligent doctor. According to an article in the Charlotte Observer:
The case is known as Delia v. E.M.A. and asks the justices on the High Court to decide how much of $2.8 million medical malpractice settlement the Armstrongs are allowed to keep and how much the states, like North Carolina, can be reimbursed for Medicaid expenses.
The young girl, Emily, was born in 2000 in Hickory, NC. The doctor in charge, Dr. James Barnes, Jr., delivered her by cesarean section which did not go well. The girl suffered serious injuries and was eventually diagnosed with cerebral palsy as a result. The parents sued the doctor, the hospital and others. The lawsuit revealed that the doctor had a history of drug abuse and prescription fraud and had voluntarily surrendered his medical license for a period.
The State of North Carolina said that they spent nearly $2 million caring for Emily through the use of the state’s Medicaid funds. After a verdict in 2006 awarded the family $2.8 million, the state tried to get a large chunk of the money. Currently, state officials have a lien for $933,333.33, or exactly one-third of the total award. They say that state law is clear that the government should be reimbursed from Medicaid beneficiaries who ultimately receive money from medical malpractice lawsuits.
The family is challenging the lien based on a federal law which prohibits state governments from placing liens on Medicaid patients’ property. They argue that the medical malpractice payout is property and thus immune. The state claims that the federal law only applies to the portion of the award for pain and suffering. The problem is that in this case the award was never itemized.
The worry of state officials is that if the Armstrongs prevail, future patients will just make sure that the entire settlement amount is categorized as for pain and suffering to avoid having to give the state any portion of the award.
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