A baby girl born at a medical facility in Hickory, North Carolina, in early 2000 was delivered via a cesarean section that went badly, resulting in severe birth injury complications for the infant. Following her birth and over the years since, the state Department of Health and Human Services has paid nearly $2 million through the North Carolina Medicaid program in support of her health and care.
In 2003, the girl's parents brought a medical malpractice lawsuit against the obstetrician and medical center, which ultimately resulted in a settlement of $2.8 million on behalf of their daughter.
The state subsequently acted under state law to assert a lien of $933,000 --- one-third of the recovery amount -- on the settlement, arguing that taxpayers had a recovery right for the money expended on the girl's care through Medicaid.
That claim is not unique to North Carolina. Other states, also, claim a legal right to seek medical reimbursements from malpractice settlements.
The family has challenged the move, though, arguing that it overreaches and that it conflicts with federal law, which bans state governments from placing liens on assets beyond medical costs. The family contends that part of the settlement is comprised of payments relating to pain and suffering, which the state has no right to touch.
The United States Supreme Court has agreed to hear the case, with oral arguments likely being heard early next year. Commentators note that the case will be closely watched and could have material consequences for how states across the country view their legal rights concerning malpractice settlement recoveries.
Source: The News Tribune, "Supreme Court will hear case on North Carolina malpractice settlement," Michael Doyle, Sept. 25, 2012
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