Arkansas Dept. of Health and Human Servs. v. Ahlborn, 547 U.S. 268 (2006)
Primary Holding
A state Medicaid agency cannot impose a lien on a tort settlement that exceeds the amount of medical costs paid by Medicaid, as such a lien contravenes federal law and is therefore unenforceable.
In the case of Arkansas Dept. of Health and Human Services v. Ahlborn, the Supreme Court decided that a state Medicaid agency cannot take money from a settlement that a person receives for injuries, if that amount is more than what Medicaid spent on their medical care. This is important because it protects consumers by ensuring they can keep compensation for pain, suffering, and lost wages, rather than having it taken away to pay back Medicaid. This case is relevant for anyone who has received a settlement after an accident and is on Medicaid, as it clarifies their rights to keep the full amount of their settlement.
AI-generated plain-language summary to help you understand this case
In January 1996, Heidi Ahlborn, a 19-year-old college student, suffered severe injuries from a car accident that left her brain damaged and unable to pursue her education or career. Due to her limited financial resources, the Arkansas Department of Health Services (ADHS) provided $215,645.30 in medical assistance under the state's Medicaid program. As part of this assistance, ADHS informed Ahlborn and her attorney about its right to reimbursement from any settlement or award she might receive from third parties responsible for her injuries, emphasizing that it had a claim to the proceeds of any recovery. In April 1997, Ahlborn filed a lawsuit against the alleged tortfeasors in Arkansas state court, seeking compensation for various damages, including medical costs, pain and suffering, and loss of future earnings. Although ADHS was not named as a party in the lawsuit, it was kept informed about the case's developments. In February 1998, ADHS intervened in the lawsuit to assert its lien on any recovery Ahlborn might obtain. The case was ultimately settled in 2002 for $550,000, but the settlement did not specify how the proceeds were allocated among the different types of damages claimed. The Eighth Circuit Court of Appeals ruled that the Arkansas statutory lien imposed by ADHS on Ahlborn's settlement violated federal law, rendering it unenforceable. This decision contrasted with rulings from other courts that upheld similar lien provisions. The Supreme Court granted certiorari to resolve this conflict, leading to the case being presented for review.
Whether Arkansas's statutory lien on a Medicaid recipient's tort settlement, which requires reimbursement of medical costs from proceeds meant to compensate for non-medical damages, is enforceable under federal law.
The judgment is reversed.
- Court
- Supreme Court
- Decision Date
- February 27, 2006
- Jurisdiction
- federal
- Case Type
- landmark
- Majority Author
- Stevens
- Damages Awarded
- N/A
- Data Quality
- high
Commissioner v. Banks, 543 U.S. 426 (2005)
Consumer LostWhen a litigant's recovery constitutes income, the portion of that recovery paid to the attorney as a contingent fee is included in the litigant's gross income under the Internal Revenue Code.
Ayotte v. Planned Parenthood of Northern New Eng., 546 U.S. 320 (2006)
Consumer WonIf enforcing a statute that regulates access to abortion would be unconstitutional in medical emergencies, lower courts may provide narrower declaratory and injunctive relief rather than invalidating the statute entirely.
Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356 (2006)
Consumer LostA fiduciary under the Employee Retirement Income Security Act (ERISA) may sue a beneficiary for reimbursement of medical expenses paid by the ERISA plan when the beneficiary has recovered damages from a third party, as long as the plan contains a valid reimbursement provision.
Will v. Hallock, 546 U.S. 345 (2006)
Consumer LostThe refusal to apply the judgment bar of the Federal Tort Claims Act is not subject to collateral appeal, as it does not constitute a final decision under 28 U.S.C. §1291.