Last week, the United States Supreme Court decided Wos v. E.M.A., and struck down North Carolina’s Medicaid reimbursement statute. In Arkansas Dept. of Health and Human Services v. Ahlborn, 547 U.S. 268 (2006), the Court had held that the anti-lien provision of the federal Medicaid Act limited states to obtaining reimbursement for Medicaid services from that portion of a tort judgment or settlement that represented repayment for medical expenses incurred. North Carolina’s reimbursement statute, N.C. Gen. Stat. Ann. §108A-57, requires that up to one-third of any damages recovered by a beneficiary be paid to the State as reimbursement. In Wos, the state argued that the statute was a valid state rule or procedure for allocating tort settlements under Ahlborn.

In rejecting this argument, the Court twice relied on amicus briefs submitted by CCL on behalf of the American Association for Justice. First, the Court concluded that Ahlborn’s reference to “special rules and procedures” was meant to refer to judicial proceedings for allocating settlements, and proved this proposition by pointing to examples of such procedures cited by AAJ in its Ahlborn amicus, which the Court there cited. The Court also rejected North Carolina’s argument that post-settlement allocation proceedings would be “wasteful, time-consuming and costly,” in part by referencing a similar procedure already employed by North Carolina courts in allocating workers’ compensation settlements. AAJ  had alerted the Court to this procedure in its amicus brief in Wos.

The Wos decision, like Ahlborn, will likely prove critically important in protecting injured Medicaid beneficiaries from excessive reimbursement demands from state Medicaid agencies. The AAJ amicus briefs in both cases were authored by CCL Senior Litigation Counsel Lou Bograd.