Capitol Correspondence - 07.06.21

SCOTUS Agrees to Hear Case on Recouping Cost of Medicaid Benefits from Salaries

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We share this InsideHealthPolicy article to keep our members informed of broader policy discussions surrounding Medicaid, which could impact individuals with cross-disability needs.

“The Supreme Court agreed to hear a case on whether state Medicaid agencies can recover costs for Medicaid beneficiaries’ past medical expenses from settlements aimed at compensating them for their future medical costs, and a lawyer for the beneficiary who raised the case said the Supreme Court’s decision will set a uniform standard across states.

The case revolves around a Florida woman named Gianinna Gallardo who has been in a vegetative state since 2008 after being hit by a truck while getting off a school bus. Eventually she received an $800,000 settlement which applied to her medical expenses, as well as other damages, though it only covered a fraction of each category.

The Florida Agency for Health Care Administration wanted to recover about $300,000 from the settlement after its state Medicaid program paid over $860,000 for Gallardo’s care — but only $35,000 of Gallardo’s settlement was earmarked for past medical expenses.

Florida statute says Medicaid can recoup its costs from payments earmarked for future expenses. However, lawyers for Gallardo and her parents argue Florida’s law violates federal Medicaid statute.


This isn’t an issue solely confined to Florida, Gallardo’s lawyer, Bryan Gowdy, said. States have differing laws on whether costs can be recouped from settlements designated for future medical costs, and state Supreme Courts across the country have issued contrasting opinions.

Gowdy argues the policy is ultimately governed by federal law, and statutes should be uniform. Lawyers for both Gallardo and the state say the Supreme Court needs to jump in and decide which interpretation is correct.”