In Aldona Wos, Secretary of North Carolina Department of Health and Human Services v. E.M.A., a minor, by and through her guardian ad litem, Johnson, et al. (decided March 20, 2013) the United States Supreme Court held that a North Carolina statute creating an irrebuttable presumption that the State is entitled to 1/3 of injury settlements received by Medicaid recipients was pre-empted by the federal Medicaid statute. In that case, a child was born with multiple birth injuries that require her to receive 12-18 hours of skilled nursing care daily. North Carolina Medicaid pays part of the cost of the ongoing care.
State Used Arbitrary 1/3 Allocation
When a settlement was reached in a medical malpractice case, the State claimed that it was entitled to 1/3 of the settlement without any determination of what portion of the settlement was allocated to payment of medical expenses under a North Carolina statute. The Supreme Court held that this law ran afoul of a provision in the Medicaid law that allowed a state to recover a portion of a recovery that represents payments for medical care, but prohibits attachments or encumbrances on the rest of the recovery. It is anticipated that the North Carolina General Assembly will revise the statute to provide a means for determining the amount to be allocated to medical expenses and subject to lien by the state.
Ongoing War Against Injury Victims
This is a small victory in an ongoing war by the North Carolina legislature against the rights of injured people. Under the guise of tort reform, the General Assembly has been making it more difficult for injured citizens to recover compensation for their injuries and easier for insurance companies and corporations to avoid liability for their wrongful acts and the acts of their representatives and insureds. These laws have included provisions placing an arbitrary limit on the amount that a person permanently injured with constant pain and even paralysis can recover, no matter how young the victim is, and a law creating a confusing and costly procedure for introducing medical bills into evidence at trial.