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U.S. Supreme Court to address states' share of malpractice awards

Our readers may have heard that South Carolina and 10 other states support North Carolina in a pivotal case on a state's ability to mitigate expenses with their Medicaid programs by receiving a share of monetary awards from private malpractice lawsuits. The U.S. Supreme Court recently heard oral arguments in this case on whether North Carolina can obtain reimbursement from a $2.8 private medical malpractice settlement.

This case started when a family sued a physician and a medical center in 2003 for malpractice during the birth of their infant, who suffered severe injuries and a diagnosis of cerebral palsy. The parties settled the case with $2.8 million payment to the family without specifying whether the payment addressed medical care for the infant. However, North Carolina spent $1.9 million in Medicaid funds for the child's medical care.

North Carolina law allows the state to recover reimbursement for the lesser of the total Medicaid payment for medical care or one-third of a medical malpractice lawsuit. Federal law prohibits states from imposing liens on Medicaid parents' property. However, the Supreme Court earlier ruled that this ban applies to payments for pain and suffering and other items that do not cover medical care.

North Carolina asserted a claim of one-third of the settlement, $933,333, even though the settlement does not designate the portion allotted to medical care. The family in the lawsuit challenged North Carolina's reimbursement law as violating federal law. North Carolina argued that it can determine how much it can take or parties would shield malpractice awards from reimbursement by claiming that the awards covered pain and suffering or other matters besides medical care.

Settling or litigating malpractice cases involving a surgical error or other errors is complex and often requires medical expertise. Plaintiffs in these cases must show that the doctor's or other health care practitioner's deviation from the standard of care led to harm. Defendants may have different liability. Medical experts may need to determine fault or deviation from proper care. Time periods may limit when a legal malpractice action may commence.

Source: The Miami Herald, "Supreme Court case involves medical malpractice awards, Medicaid," Michael Doyle, Jan. 7, 2013

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