Department of Health and Human Services v. Ahlborn

In Department of Health and Human Services v. Ahlborn, 547 U.S. 268, 126 S. Ct. 1752, 164 L. Ed. 2d 459 (2006), the United States Supreme Court focused on that specific issue, stating: "We must decide whether ADHS can lay claim to more than the portion of the recipient's settlement that represents medical expenses." 547 U.S. at 280, 164 L. Ed. 2d at 471. The holding of the Court was that ADHS could not: The text of the federal third-party liability provisions suggests not; it focuses on recovery of payments for medical care. Medicaid recipients must, as a condition of eligibility, "assign the State any rights . . . to payment for medical care from any third party," 42 U.S.C. 1396k(a)(1)(A), not rights to payment for, for example, lost wages. Id. Even more explicitly: As explained above, under the federal statute the State's assigned rights extend only to recovery of payments for medical care. Accordingly, what 1396k(b) requires is that the State be paid first out of any damages representing payments for medical care before the recipient can recover any of her own costs for medical care. Id. at 281, 164 L. Ed. 2d at 472.