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Supreme Court Ruling Allows States to Recoup Health Care Costs from Medicaid Accident Victim

June 14, 2022

Gianinna Gallardo was hit by a truck after getting off her school bus, and she remains in a persistent vegetative state. Florida’s Medicaid agency paid $862,688.77 to cover Gallardo’s initial medical expenses and continues to pay for her medical expenses. Her parents sued and recovered about $800,000 in a court-approved settlement, with $35,367.52 expressly designated as compensation for past medical expenses.

The Medicaid Act allows states to make a reasonable effort to recoup care costs from liable third parties. In Florida, the statute includes a formula that would allocate $300,000 – 37.5% – of $800,000, the percentage the statute sets as presumptively representing the portion of the tort recovery that is for “past and future medical expenses.” Gallardo argued that anything above the $35, 367.52 would be taking reimbursement for future medical expenses and therefore was improper.

Gallardo v. Marstiller went all the way to the Supreme Court, where Justice Thomas reasoned that one subsection of Section 1396k of the Medicaid Act explicitly limits the state’s recovery to medical expenses which Medicaid has already paid. However, the part of the Act that Gallardo was relying on lacks that explicit language, even though it was drafted later. Thomas reasoned that if Congress intended to limit the State’s right to cover costs only to medical expenses already paid, it would have expressly said so. Since that language is lacking, there is no distinction between past and future medical expenses. Further, Thomas states that the relevant distinction is thus “between medical and nonmedical expenses,” Wos v. E. M. A., 568 U. S. 627, 641, not between past and future medical expenses. The result is the state Medicaid program was entitled to recoup the full 37.5% – in this case, $300,000.

Make sure your personal injury attorney is familiar with this case if you are receiving any form of Medicaid.