U.S. Supreme Court to weigh Florida Medicaid fight

The case, which justices will hear Jan. 10, has drawn attention from officials across the country.

The U.S. Department of Justice has lined up with the parents of Gianinna Gallardo, who was left in what attorneys described as a “persistent vegetative state” after the accident. Meanwhile, 14 states and groups such as the National Conference of State Legislatures are backing the Florida Agency for Health Care Administration, which runs the state’s Medicaid program.

The case centers on how much money the Medicaid program should be able to recover after it paid $862,688 for Gallardo’s medical care after the accident, which happened when she was 13. Gallardo’s parents filed a lawsuit against the truck’s owner and driver and the Lee County School Board and ultimately reached an $800,000 settlement.

Under a formula in state law, the Agency for Health Care Administration said it was entitled to recoup $300,000 from the settlement. That included money in the settlement allocated for past and future medical costs.

But the Gallardo attorneys contend that the Medicaid program should only be able to recover money for past medical costs that it paid — not from the portion of the settlement for future medical expenses. A U.S. district judge agreed with the parents, but the 11th U.S. Circuit Court of Appeals overturned that decision and ruled for the state.

In a September brief, the parents’ attorneys wrote that “third-party” provisions in federal law “give a state no right to payments for medical expenses Medicaid has not paid.”

“In this case, Florida paid for petitioner’s past medical expenses, but not for her future medical expenses,” Justice Department attorneys wrote in another September brief. “The third-party-liability provisions thus entitle Florida only to the portion of petitioner’s tort settlement that represents past medical expenses. Yet Florida has imposed a lien even against the portion that represents future medical expenses.”

But attorneys for the state wrote in a brief last month that only $35,367 in the settlement was allocated for past medical care. The state argued that federal law allows recouping part of the settlement designated for future medical expenses.

“Because health care is expensive, when a person suffers a sudden and acute injury, Medicaid often steps up to cover the medical costs,” the state’s brief said. “At the same time, Congress has made Medicaid the payer of last resort, meaning that other sources available to pay medical expenses must be exhausted before Medicaid pays for care. Consistent with that structure, state Medicaid programs must recover their costs from third parties who owe payments for medical care to the beneficiary.”

Other briefs supporting Florida also pointed to potential implications of a ruling against the state.

“In sum, petitioner is requesting that the (Supreme) Court further limit the available payments that the state is entitled to reach,” said a brief filed last month by the National Conference of State Legislatures, the National League of Cities, the U.S. Conference of Mayors and the Government Finance Officers Association. “Petitioner’s reading is contrary to both the statutory text and the intent of Congress, and would severely limit the state’s ability to recover its Medicaid expenditures.”