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Can States Take Part of Your Medical Malpractice Recovery Award?

Medicaid beneficiaries who are the victims of medical malpractice or other type of personal injury accident may now be able to retain more of their damage awards in light of a recent U.S. Supreme Court ruling.

In Wos v. E.M.A., the U.S. Supreme Court overturned a North Carolina law that created an automatic reimbursement rate for tort awards in which the victim received Medicaid benefits. As a result, states will no longer be able to set automatic liens on personal injury damage awards, including medical malpractice damage awards, for Medicaid reimbursement without a determination of how much of the ultimate damages were attributed to medical expenses.

In Wos, the plaintiff was a child who had suffered multiple birth injuries as a result of medical malpractice. The personal injury lawsuit sought damages for medical expenses, pain and suffering, lost wages to the child's parents, emotional distress, and other injuries. The lawsuit ultimately settled for $2.8 million without a judicial determination regarding the portion of the damages that were attributed to medical expenses. Nonetheless, the trial court ordered that $933,333 - or one-third of the settlement - be paid to the state as reimbursement for the $1.9 million in Medicaid benefits the child had received.

In a 6-3 ruling, the Supreme Court held that, pursuant to the Court's holding in Department of Health and Human Services v. Ahlbor, states are prohibited from taking any part of a Medicaid beneficiary's tort judgment or settlement that is not attributed to medical expenses. Accordingly, by enforcing a lien on a portion of the plaintiff's settlement without a determination of the amount of medical expenses, the state had violated federal judicial precedent.

Plaintiff advocates laud the Court's decision as "fair and equitable," according to this article in LegalNews. Many experts disagree with the states' fears that the requirement of judicial determination regarding apportionment of a personal injury award would be burdensome on the states and encourage plaintiffs to underestimate medical expenses. In fact, according to Louis M. Bogard, senior litigation counsel for the Center of Constitutional Litigation in Washington, "Now plaintiffs will have more of an economic incentive to bring suits [and] settle cases."

The Chicago medical malpractice lawyers at Steinberg, Goodman & Kalish are committed to helping the victims of medical malpractice or other type of personal injury accident obtain full and fair compensation for their injuries. If you have been injured by in a personal injury accident or have been the victim of medical malpractice, contact the Chicago medical malpractice lawyers at Steinberg, Goodman & Kalish to schedule a free consultation to discuss a possible personal injury or medical malpractice claim.

Steinberg Goodman & Kalish  ( is dedicated to protecting victims and their families.  We handle medical malpractice, product liability, personal injury, wrongful death, auto accidents, professional negligence, birth trauma, and railroad law matters. Contact us at (800) 784-0150 or (312) 782-1386.

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