A thirteen-year-old North Carolina girl who was rendered deaf, blind, and mentally disabled as a result of a mishandled Caesarian section, was the center of a landmark Supreme Court decision. In a 6-3 ruling that affects several states, the Supreme Court ruled that North Carolina’s law allowing the state to take one-third of injury victims’ judgment or settlement to pay for state-funded medical expenses, directly conflicted with the federal Medicaid statute and therefore, “must give way.”
The facts of the case:
- The disabled girl from Taylorsville, North Carolina received a $2.8 million settlement from the obstetrician whose negligence caused her to be born with cerebral palsy.
- The obstetrician worked at Catawba Valley Medical Center in Hickory, NC, and had a history of drug abuse.
- At the time, North Carolina law permitted the state to take the lesser of either the total Medicaid spending on the patient or one-third of the malpractice recovery.
- The state, which provided Medicaid payments of nearly $2 million for the victim’s care, asserted a lien on one-third of the settlement amount for nearly $1 million.
- The girl’s parents contested the lien up to the Supreme Court.
- The Court recognized that the girl would require extensive medical care for the rest of her life, and that she would not be able to work, live independently, or provide for her basic needs.
- Accordingly, the Court declared that North Carolina cannot establish a fixed lien percentage applicable to all personal injury cases. Such an approach is inconsistent with federal law, which bars a state from taking any portion of a settlement or award that is not designated as payments for medical care.
In short, the victim’s $2.8 million settlement was for both medical expenses and pain and suffering. The Court made clear that states are prohibited from taking a portion of the pain and suffering proceeds. The decision was a major victory for clients of NC medical malpractice attorneys, who will be able to deliver a greater recovery amount to personal injury victims.