Question: We have mediation next week in an FTCA baby case pending in the Western District of Pennsylvania. I would like to discuss successful approaches with Pennsylvania Medicaid either in lien reduction or pouring the lien into a Special Needs Trust for repayment upon death or any other successful strategy. If you know anything that would be helpful I would appreciate a minute of your time.
Washington D.C. Attorney
Answer: After the Ahlborn decision last year, many states have scrambled to changes their legislative framework for dealing with liens. A couple months ago, Pennsylvania issued a policy statement which amends Title 55 of the Pennsylvania Code, Chapter 259. The statement explains how the Department will interpret and apply the requirements of 62 P.S. §1409(b) to be consistent with the Ahlborn decision. Pennsylvania believes their existing law is facially consistent with Ahlborn. Therefore, the statement of policy is to formally document the Department’s interpretation and establish procedures. The policy announces that §1409(b)(11), which limits the Department’s reimbursement to one-half of the beneficiary’s net recovery, is consistent with Ahlborn. Other parts of the statement seem to be directed at arguments presumably presented by attorneys to the Department in the aftermath of Ahlborn. Specifically, that the Medicaid “beneficiary generally recovers the Department’s expenses as part of his tort claim unless the Department chooses to intervene in an action of sue separately.” This statement precludes attorneys from arguing that medical expenses were not considered in the settlement, therefore, barring the Department’s recovery under Ahlborn. Additionally, the state has effectively inhibited “equitable apportionment” arguments. The policy asserts that under Pennsylvania law a settlement conclusively establishes the settlement as full compensation for damages. That is the full report as I know it.
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