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Medical Malpractice

state law and invalidated Arkansas’ assertion of its statutory lien against any portion of her award except that intended to compensate for past medical expenses. Because Ahlborn’s settlement had resulted in a recovery

of only one sixth of the total value of her claimed damages, she had recovered only one sixth of each category of damages, and specifically had recovered only one sixth of her claim for past medical expenses. Ahlborn argued that the state’s lien for past medical expenses could be satisfied only out of funds actually recovered by her on the claim for past medical expenses, and that any effort to satisfy the lien out of other portions of her recovery violated federal law. Arkansas countered that the settlement proceeds – at least to the extent of past medical expenses paid by the Program – never became Ahlborn’s “property” as they had been previously and automatically assigned to the state as a condition of Medicaid eligibility before ever reaching her hands. And if the proceeds were never Ahlborn’s property, Arkansas argued, the assertion of a lien against such proceeds did not offend the federal statutory prohibition against liens on the property of a Recipient on account of benefits correctly paid. Te Supreme Court accepted Ahlborn’s argument over that of Arkansas. In the Court’s view, the statutory “assignment” of Ahlborn’s rights

to recover as a condition of eligibility for medical assistance benefits did not change the fact that Arkansas was asserting a lien against Ahlborn’s property.

Te terms that Arkansas employs to describe the mechanism by which it lays claims to the settlement proceeds do not, by themselves, tell us whether the statute violates the anti-lien provision. Although denominated an “assignment,” the effect of the statute here was not to divest Ahlborn of all her property interest; instead, Ahlborn retained the right to sue for medical care payments, and the State asserted a right to the fruits of that suit once they materialized. In effect, and as at least some of the statutory language recognizes, Arkansas has imposed a lien on Ahlborn’s property. Since none of the federal third-party liability provisions excepts that lien from operation of the anti-lien provision, its imposition violates federal law.

Id. at 286 (emphasis added) (citations omitted). Maryland law is similar to Arkansas law in that despite

the “deemed assignment” of “any rights to payment for medical care services from any third party who has the

Continued on page 34



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10-IWP-051-GavelAdResize_V1.indd 1



DATE: 4/12/10 InDesign

TRAFFIC: Vanessa G.

JOB: 10-IWP-051 Erica H.

Trial Reporter / Summer 2010 31 4/12/10 3:01:52 PM


77 North Washington

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