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With case law piling up all over the country with differing results post Ahlborn, the US Supreme Court granted the North Carolina Attorney General’s Petition for Writ of Certiorari from a 4^th Circuit decision regarding the application of the Ahlborn decision to NC state law.  In E.M.A., the 4^th Circuit held that NC must have in place procedures that allow a dissatisfied Medicaid beneficiary to challenge the default allocation of a percentage of settlement proceeds to the Medicaid lien.  The 4^th Circuit agreed with the 3^rd Circuit’s holding in Tristani finding that under the circumstances of this case, “North Carolina's statutory presumption must be subject to adversarial testing.”  In other words, there needs to be an Ahlborn type of hearing. 

In it’s Petition for Writ of Certiorari, the following questions were posed for the US Supreme Court to answer:

1.   The Medicaid Act requires participating States to seek reimbursement from third-party tortfeasors for health-care expenditures they made to Medicaid recipients who are tort victims. 42 U.S.C. §§ 1396a(a)(25), 1396k(a) (2006). To enforce that requirement when the recipient and a third-party resolve their tort dispute through judgment or settlement, North Carolina law provides that the State has a subrogation right to, and may assert a lien upon, the lesser of one-third of the recipient’s recovery or the State’s actual medical expenditures. N.C. Gen. Stat. § 108A-57 (2011).

2.   The question presented is whether N.C. Gen. Stat. § 108A-57 is preempted by the Medicaid Act’s anti-lien provision as it was construed in Arkansas Department of Health & Human Services v. Ahlborn, 547 U.S. 268 (2006), an issue on which the North Carolina Supreme Court and the United States Court of Appeals for the Fourth Circuit are in conflict.

Given the confusing state of affairs regarding case law in Florida, the US Supreme Court’s holding in EMA may provide new life to Medicaid lien reductions in Florida. This is an important case and will have a major impact on lien reductions throughout the Country.  It may be for the positive if you are on the plaintiff side or the negative depending on the outcome.  My hope is that states that have been applying their recovery statutes dogmatically such as Florida end up on the wrong end of this decision.  I have seen too many times firsthand cases where the client ends up with virtually nothing after recovery by Medicaid.