Excerpt from: Shapiro Settlement Solutions (click for full article)
In WOS v. E.M.A., 568 U.S. ___ (March 20, 2013), the Supreme Court affirmed the Fourth Circuit’s ruling that North Carolina’s irrebuttable statutory presumption that 1/3 of a tort recovery was the amount due on state’s Medicaid subrogation claim was invalid under federal Medicaid anti-lien statute and the Court’s 2006 Ahlborn decision. In this case the true value of the damages was estimated to be $42 million and the victim was only able to recover $2.8 million on the malpractice claim for multiple birth injuries. The State of North Carolina sought 1/3 of the recovery. This decision fully adheres to the Court’s 2006 Ahlborn decision which authorized only 1/6 reimbursement of medical bills paid because the tort recovery was only 1/6 the true damages. In Ahlborn the parties stipulated to the value of the claim and allocation related to medical bills. Here there was no stipulation or allocation. Important language from the opinion is quoted in the link above.