Verdicts

Medicaid Expenditures Can Be Recouped Beyond Limitations Period

The Supreme Court of Pennsylvania reversed the Superior Court by holding that the Pennsylvania Department of Public Welfare (DPW) can obtain reimbursement from a tortfeasor for Medicaid expenditures made on behalf of a disabled minor even when a claim by the minor's parents is barred by the statute of limitations. E.D.B. v. Clair, PICS Case No. 09-2198 (Pa. Dec. 29, 2009) McCaffery, J.; Saylor, J. concurring; Baer, J. dissenting.

The disabled child, Emily, was born on Oct. 11, 1985, suffering from severe physical and mental disabilities. Nearly 18 years later, in August 2003, Emily, by and through her parents and guardians, the Bowmasters, filed suit against Centre Community Hospital, where Emily was born, and an attending physician, alleging that their negligence was the proximate cause of Emily's disabilities. The parties reached a negotiated settlement, and the Bowmasters filed a petition for leave to settle an incapacitated person's case. The court of common pleas approved the settlement, which included the establishment of a special needs trust for Emily.

Because Emily had been receiving medical assistance benefits through the Medicaid program, the Bowmasters provided notice to DPW of their suit in March 2004, as required by statute. DPW responded with a statement of claim asserting a lien on any award or settlement resolving the litigation, in the amount that DPW had expended for Emily's medical care. The trial court ordered the trustee of Emily's special needs trust to reimburse DPW from the settlement.

The Bowmasters appealed to the Superior Court, which reversed and remanded, holding that DPW could be reimbursed only for those medical expenses paid on Emily's behalf after she reached the age of majority. The Superior Court reasoned that, under Pennsylvania common law, a claim for medical expenses incurred by a minor because of personal injury rests with the minor's parents, not with the minor herself. However, when the complaint was filed, the Bowmasters were legally barred from seeking reimbursement for medical expenses they had incurred during Emily's minority because the statute of limitations for such a suit had expired. Although Emily could pursue a claim for medical expenses in her own right, such a claim, under common law, would necessarily be limited to expenses incurred after she reached the age of majority. Thus, the Superior Court concluded, the instant litigation could not have resulted in an award or settlement that included the medical expenses Emily had incurred while she was a minor. Accordingly, DPW could not satisfy its lien for Medicaid benefits paid during Emily's minority from the settlement. Soon thereafter, the Commonwealth Court reached the opposite result.

The Supreme Court noted that the Pennsylvania Fraud and Abuse Control Act addresses a variety of matters relating to the Medicaid program, which provides joint federal and state funding of medical care for those who cannot afford to pay, and requires cooperation between the states and the federal government. In order to maintain federal funding, DPW is required to recover from liable third parties the reasonable value of benefits provided under the program. The Act, at 62 P.S. ' 1409(b)(13), defines a beneficiary as “any person who has received benefits or will be provided benefits under this act because of any injury for which another person may be liable. It includes such beneficiary's guardian, conservator, or other personal representative, his estate or survivors.” Thus, under the statute, Emily was a beneficiary. When any beneficiary, whether an adult or a minor, enters into a settlement with his or her tortfeasor, DPW has the right to recover, via a lien asserted on the settlement, the reasonable value of Medicaid benefits provided to the beneficiary.

Justice Saylor concurred, noting that the complaint sought past medical expenses the parents had expended. In dissent, Justice Baer concluded that, under his reading, of the applicable provisions of the Act, Emily was not the beneficiary of medical assistance payments from the Department of Public Welfare (DPW) during her minority years.

Medicaid Expenditures Can Be Recouped Beyond Limitations Period

The Supreme Court of Pennsylvania reversed the Superior Court by holding that the Pennsylvania Department of Public Welfare (DPW) can obtain reimbursement from a tortfeasor for Medicaid expenditures made on behalf of a disabled minor even when a claim by the minor's parents is barred by the statute of limitations. E.D.B. v. Clair, PICS Case No. 09-2198 (Pa. Dec. 29, 2009) McCaffery, J.; Saylor, J. concurring; Baer, J. dissenting.

The disabled child, Emily, was born on Oct. 11, 1985, suffering from severe physical and mental disabilities. Nearly 18 years later, in August 2003, Emily, by and through her parents and guardians, the Bowmasters, filed suit against Centre Community Hospital, where Emily was born, and an attending physician, alleging that their negligence was the proximate cause of Emily's disabilities. The parties reached a negotiated settlement, and the Bowmasters filed a petition for leave to settle an incapacitated person's case. The court of common pleas approved the settlement, which included the establishment of a special needs trust for Emily.

Because Emily had been receiving medical assistance benefits through the Medicaid program, the Bowmasters provided notice to DPW of their suit in March 2004, as required by statute. DPW responded with a statement of claim asserting a lien on any award or settlement resolving the litigation, in the amount that DPW had expended for Emily's medical care. The trial court ordered the trustee of Emily's special needs trust to reimburse DPW from the settlement.

The Bowmasters appealed to the Superior Court, which reversed and remanded, holding that DPW could be reimbursed only for those medical expenses paid on Emily's behalf after she reached the age of majority. The Superior Court reasoned that, under Pennsylvania common law, a claim for medical expenses incurred by a minor because of personal injury rests with the minor's parents, not with the minor herself. However, when the complaint was filed, the Bowmasters were legally barred from seeking reimbursement for medical expenses they had incurred during Emily's minority because the statute of limitations for such a suit had expired. Although Emily could pursue a claim for medical expenses in her own right, such a claim, under common law, would necessarily be limited to expenses incurred after she reached the age of majority. Thus, the Superior Court concluded, the instant litigation could not have resulted in an award or settlement that included the medical expenses Emily had incurred while she was a minor. Accordingly, DPW could not satisfy its lien for Medicaid benefits paid during Emily's minority from the settlement. Soon thereafter, the Commonwealth Court reached the opposite result.

The Supreme Court noted that the Pennsylvania Fraud and Abuse Control Act addresses a variety of matters relating to the Medicaid program, which provides joint federal and state funding of medical care for those who cannot afford to pay, and requires cooperation between the states and the federal government. In order to maintain federal funding, DPW is required to recover from liable third parties the reasonable value of benefits provided under the program. The Act, at 62 P.S. ' 1409(b)(13), defines a beneficiary as “any person who has received benefits or will be provided benefits under this act because of any injury for which another person may be liable. It includes such beneficiary's guardian, conservator, or other personal representative, his estate or survivors.” Thus, under the statute, Emily was a beneficiary. When any beneficiary, whether an adult or a minor, enters into a settlement with his or her tortfeasor, DPW has the right to recover, via a lien asserted on the settlement, the reasonable value of Medicaid benefits provided to the beneficiary.

Justice Saylor concurred, noting that the complaint sought past medical expenses the parents had expended. In dissent, Justice Baer concluded that, under his reading, of the applicable provisions of the Act, Emily was not the beneficiary of medical assistance payments from the Department of Public Welfare (DPW) during her minority years.