Whelan v. Division of Medical Assistance

694 N.E.2d 10, 44 Mass. App. Ct. 663
CourtMassachusetts Appeals Court
DecidedApril 30, 1998
DocketNo. 96-P-1083
StatusPublished
Cited by2 cases

This text of 694 N.E.2d 10 (Whelan v. Division of Medical Assistance) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Whelan v. Division of Medical Assistance, 694 N.E.2d 10, 44 Mass. App. Ct. 663 (Mass. Ct. App. 1998).

Opinion

Kass, J.

Elizabeth Whelan settled a medical malpractice claim [664]*664against her mother’s obstetrician for $2,000,000.2 Over seven years,3 beginning soon after Elizabeth’s birth, the Commonwealth, through the Division of Medical Assistance (the division), had provided Medicaid benefits for her care. Upon receiving notice through a newspaper story of the judgment Elizabeth had obtained, the division filed a lien of $334,178.12 against the settlement proceeds. Elizabeth moved to discharge the Commonwealth’s lien, and the Superior Court judge who presided over the underlying malpractice trial denied that motion. This appeal followed. Elizabeth resists the lien, asserted under G. L. c. 18, § 5G, and a superseding statute enacted in 1993, G. L. 118E, § 22, on the ground that her action against the obstetrician claimed compensation for damages that would accrue after the time during which the division had made Medicaid payments on Elizabeth’s behalf.4 The trial judge ruled that the Commonwealth, under the statutory scheme, is entitled to its lien. On that central question, we affirm his order. We make a minor modification to allow for inquiry into whether the figure of $334,178.12 is accurate.

The theory of Elizabeth’s case against the obstetrician was that his negligence caused her to suffer brain damage at birth and possibly in útero.5 The obstetrician’s defense was that Elizabeth’s deficits were congenital in origin. Elizabeth had, indeed, been bom with .a diaphragmatic hernia that all parties agree was a congenital anomaly and of a kind sometimes associated with brain anomalies. The hernia was surgically repaired.

Under the governing statutes, G. L. c. 18, § 5G, and G. L. c. 118E, § 22, a Medicaid beneficiary is required to notify the [665]*665division6 in writing of the commencement of an action against a third party to recover damages arising out of the injury that called forth Medicaid benefits. Elizabeth did not so notify the Commonwealth.

1. The statutory framework. Any State that chooses to participate in the Medicaid program must “take all reasonable measures to ascertain the legal liability of third parties ... to pay for care and services available under the plan.” 42 U.S.C. § 1396a(a)(25)(A) & (B) (1994). See Harlow v. Chin, 405 Mass. 697, 720-711 (1989); Shweiri v. Commonwealth, 416 Mass. 385, 388-389 (1993). The response of Massachusetts to that requirement first appeared in G. L. c. 18, § 5G, inserted by St. 1977, c. 363A, § 52. Until 1993, the dispensing agent for Medicaid payments and for recovery under § 5G was the Department of Public Welfare.7 Statutes 1993, c. 161, § 1, established the Division of Medical Assistance and conferred on that new agency the responsibility for running Medicaid. Provisions for reimbursement of Medicaid payments from recoveries having their source in third-party liability, analogous to the provisions of § 5G, appeared in § 22 of a new c. 118E, inserted by St. 1993, c. 161, § 17.

When Elizabeth began receiving Medicaid benefits in 1989, G. L. c. 18, § 5G, was the applicable statute. On July 16, 1993, G. L. c. 118E, § 22, became applicable. Those two statutes are the same in design and substantially similar in language. By the time of the verdict, the settlement, and the assertion of its lien by the division in November, 1995, the Legislature had further amended § 5G and § 22 (see St. 1995, c. 38, §§ 33 and 131). It is enough, for the moment, to observe that the 1995 amendments both simplify and refine some of the provisions, and do not alter the reciprocal rights of Elizabeth Whelan and the division. Under all versions of the statute, the division is entitled to recover from a third party liable to a Medicaid beneficiary all Medicaid disbursements to that beneficiary to the extent the Medicaid benefits were provided as a result of an injury that gave rise to the third-party liability. To illustrate, if a person receives Medicaid assistance in connection with a broken leg, that injury having been caused by the negligence of a tortfeasor, then the Commonwealth has a claim, to the extent of its [666]*666Medicaid outlays, against the recovery of the injured party from the tortfeasor. Pertinent provisions of § 5G, in the form applicable in 1989, § 22, as enacted in 1993, and § 22, as amended in 1995, are set out in an Appendix to this opinion.

2. Extent of Commonwealth’s lien. All versions of the statutes also confer on the Commonwealth a lien against proceeds from a third party for Medicaid benefits paid in connection with the injury for which the third party is liable. Elizabeth, as we have noted, contends that her settlement with the obstetrician is beyond the reach of the statutory lien because the damages she recovered did not include past medical expenses. The Massachusetts Medicaid recovery statutes, however, do not carve out any past-future damages distinction. They provide for recovery, in the 1982 and 1993 statutes, of an “amount equal to the benefits provided ... to the extent that such benefits were provided as a result of the . . . injury . . . suffered by the claimant.” The 1995 statutory language is, if anything, more inclusive. It provides for repayment to the Commonwealth of “the total of all public assistance benefits, both financial and medical, provided . . . to or on behalf of the claimant . . . .” The lien is to operate on “any amounts received by the claimant from the insurer or third party.” Shweiri v. Commonwealth, 416 Mass. at 389.

The entire design of the Federal-State statutory apparatus is to replenish Medicaid funds when a benefit recipient recovers compensation for the injury from the person who caused it. Elizabeth’s view that prospective damages limit reimbursement for earlier Medicaid payments allows easy subversion of the statutory purpose. All a lawyer need do, as here, is ignore previous loss and demand of the third party only prospective loss. That, as our English brethren would say, is too clever by half. Elizabeth’s position is the more untenable because she failed to comply with the statutory requirement of notifying the division that she was bringing a third-party negligence action. Had she done so, the division could have intervened and made demand in the malpractice case for past as well as anticipated damages.

Three cases from other States from which Elizabeth seeks support are based either on different statutory language or no applicable statute at all. See and contrast Department of Human Serv. v. Brooks, 412 N.W.2d 613, 616 (Iowa 1987); In re Estate of Jackson, 79 NJ. 517, 527-528 (1979); Baker v. Sterling, 39 N.Y.2d 397, 402-406 (1976). Elizabeth recognized the Com[667]*667monwealth’s call on potential recovery from third parties by subscribing, when applying for Medicaid benefits, to the following:

“If you are applying for or receiving Medical Assistance because of an accident at your job, an auto accident, or any other incident for which you will sue the person responsible for your injury, then by signing this application, you promise to repay that medical assistance out of any money which you receive.”

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Bluebook (online)
694 N.E.2d 10, 44 Mass. App. Ct. 663, Counsel Stack Legal Research, https://law.counselstack.com/opinion/whelan-v-division-of-medical-assistance-massappct-1998.