Arkansas Dept. of Health and Human Servs. v. Ahlborn

PETITIONER: Arkansas Department of Health and Human Services, et al.
RESPONDENT: Heidi Ahlborn
LOCATION: Board of Immigration Appeals

DOCKET NO.: 04-1506
DECIDED BY: Roberts Court (2006-2009)
LOWER COURT: United States Court of Appeals for the Eighth Circuit

CITATION: 547 US 268 (2006)
GRANTED: Sep 27, 2005
ARGUED: Feb 27, 2006
DECIDED: May 01, 2006

ADVOCATES:
H. David Blair -
Herbert David Blair - argued the cause for Respondent
Lori Freno -
Patricia A. Millett - argued the cause for Petitioners

Facts of the case

Heidi Ahlborn was injured and permanently disabled in a car accident. She received Medicaid payments totaling $215,645 through the Arkansas Department of Human Services (ADHS) to pay for her medical treatment. In order to be eligible for the Medicaid payments, Arkansas law required Ahlborn to give the ADHS the "right to any settlement, judgment, or award" she might receive because of the accident, up to the amount Medicaid had paid for her treatment.

Several years after the accident, Ahlborn received $550,000 in a settlement with the parties liable for her injuries. The sum covered her medical treatment as well as pain and suffering, lost earnings, and her lost earning potential in the future. Only $35,581 of the settlement was earmarked for her medical treatment, however. When the ADHS demanded that she repay the full $215,645, therefore, Ahlborn refused, and the issue went to a federal district court in Arkansas. The judge sided with the ADHS, ruling that it was not unreasonable for Arkansas to require Ahlborn to agree to repay them fully from any settlement she might receive in order to be eligible, even if the portion specifically allocated for medical treatment was less than the amount demanded by Medicaid.

An 8th Circuit Court of Appeals panel reversed, however, finding that seizing money from her settlement that had not been earmarked for medical treatment would violate federal Medicaid regulations, which forbid state governments from seizing the property of Medicaid recipients in order to recover money spent on treatment. The panel therefore ordered that Ahlborn repay just $35,581 to the ADHS.

Question

Do federal Medicaid statutes limit the amount a state can recover in reimbursement from a third-party payment to the portion earmarked for medical treatment?

Media for Arkansas Dept. of Health and Human Servs. v. Ahlborn

Audio Transcription for Oral Argument - February 27, 2006 in Arkansas Dept. of Health and Human Servs. v. Ahlborn

Audio Transcription for Opinion Announcement - May 01, 2006 in Arkansas Dept. of Health and Human Servs. v. Ahlborn

John G. Roberts, Jr.:

Justice Steven says the opinion in 04-1506, Arkansas Department of Health and Human Services versus Ahlborn.

John Paul Stevens:

This case comes to us on writ of certiorari to the Court of Appeals for the 8th Circuit.

We granted review to decide whether a State can, consistent with federal Medicaid law, assert a lien on a Medicaid recipient’s tort settlement in an amount exceeding the portion of the settlement that represents payments for medical care.

Heidi Ahlborn was severely injured in a car accident in 1996.

Because she was unable to pay all of her medical costs, Arkansas, through its federally subsidized Medicaid program, paid roughly $215,000.00 of medical expenses on her behalf.

Meanwhile, Ahlborn sued the individuals allegedly responsible for her injuries.

Arkansas intervened in that suit to assert a lien on any settlement, but did not actually participate in settlement negotiations that ultimately took place.

She received an unallocated settlement in the amount of $550,000.00.

Although Arkansas stipulated that only about $35,000.00 of that settlement represented payments for medical care, it nonetheless asserts that it’s entitled to full reimbursement in the amount of about $215,000.00 for all costs it paid on Ahlborn’s behalf under the Medicaid system.

In an opinion filed with the Clerk of the Court today, we affirm the 8th Circuit’s ruling that Arkansas is entitled only to the portion of Ahlborn’s settlement that represents payments for medical care, that is, $35,000.00.

Under the federal Medicaid provisions, a State can -- indeed, it must -- require a Medicaid recipient to assign her rights to recovery from third parties of, quote, “payments for medical care,” unquote; but the federal statute neither requires nor authorizes assignment of rights to payment for other items of damage and, in fact, the federal and anti-lien statute affirmatively prohibits Arkansas’s placement of a lien on property of the recipient that does not constitute third-party payments for medical care.

Such property includes the part of Ahlborn’s settlement that represents nonmedical damages.

To the extent Arkansas statutorily inviolates the federal anti-lien provision, it cannot be enforced.

Our opinion is unanimous.