Gallardo v. Marstiller

The Medicaid Act provides that, when a person recovers damages in a tort action and some portion of the damages is compensation for medical expenses, a state can assert a lien over the portion of the tort recovery that is properly allocated to medical expenses paid by Medicaid. In this case, the Florida Medicaid program paid for medical expenses incurred by a child who was hit by a bus and left in a persistent vegetative state. She later received a tort settlement that covered a variety of categories of damages, including both past and future medical expenses, but did not fully compensate the victim for any of the damages she suffered. To recover for past Medicaid expenses, the State of Florida then asserted a lien over the part of the settlement that reflected compensation for past medical expenses (which had been paid by Medicaid) and the part that compensated for future medical expenses (which had not been). The U.S. Court of Appeals for the Eleventh Circuit held that the State could recover its past expenditures from the amount of the settlement intended to cover future medical expenses that the State had not paid.

Public Citizen, serving as co-counsel for the plaintiff in the U.S. Supreme Court, filed a petition for certiorari asking the Court to resolve between the court of appeals’ decision and decisions of a number of state supreme courts on the meaning of the relevant provision of the Medicaid Act. The Court granted the petition and heard argument in the Fall of 2021. In June 2022, the Court affirmed the Eleventh’s Circuit’s decision in a 7-2 opinion, holding that the plain text of the Medicaid Act permits a State to seek reimbursement from settlement payments allocated for future medical care.