US Supreme Court hears oral arguments on federal Medicaid Act
© WikiMedia (Joe Ravi)
US Supreme Court hears oral arguments on federal Medicaid Act

The US Supreme Court Monday heard oral arguments for Gallardo v. Marstiller on whether the “federal Medicaid Act provides for a state Medicaid program to recover reimbursement for Medicaid’s payment of a beneficiary’s past medical expenses by taking funds from the portion of the beneficiary’s tort recovery that compensates for future medical expenses.”

The court agreed to hear this case in July 2021. The case requires the court to interpret the Medicaid Act to determine the extent of a state’s potential entitlement to medical expenses for a beneficiary. The entitlement only applies when the state has paid for past medical expenses for a beneficiary, but then a tort settlement provides the beneficiary with compensation for past and future medical expenses. Thus, the question presented is if the state is able to collect some of the settlement money of a beneficiary because their past expenses were paid for twice.

Under the Medicaid Act, the state may not collect Medicaid payments from the beneficiary or sue to recover them. However, when the medical expenses are covered by a tort settlement, it requires the state to “seek reimbursement” from the third party who committed the tort against the beneficiary.

The parties’ lawyers argued their respective points before the Supreme Court for over an hour on Monday. Florida argued that the state should be able to recover some of the settlement money, including those for future expenses. Gallardo’s lawyers argued that Florida is at least not entitled to future payments.

The case first arose due to a traffic accident in which the plaintiff, Gallardo, was hit by a truck after getting off her school bus and sustained injuries that left her in a persistent vegetative state.