Supreme Court weighs case of disabled child and medical malpractice award

McClatchy NewspapersJanuary 8, 2013 

— Emily Armstrong remained in her specially equipped Taylorsville, N.C., home on Tuesday while Supreme Court justices wrangled over a legal dilemma entangling her and which defies easy solution.

As her mother, Sandra; sister, Kelsey; and father, William, a prison guard, watched in the courtroom, the justices seemed genuinely split over when and how states can take a share of medical malpractice payments awarded Medicaid beneficiaries like Emily.

“How do we know what’s fair and appropriate?” Chief Justice John Roberts Jr. asked at one point.

Profoundly disabled since an allegedly botched caesarian-section delivery, Emily turns 13 next month. She is deaf, blind and largely immobile. She does not talk. She suffers seizures and periodically requires suctioning of her airway. She needs, the family’s Raleigh-based attorney William Bystrynski said following the hearing, “a tremendous amount of personal care.”

A vexed-sounding Justice Stephen Breyer said that “the question here is how to figure” a patient’s medical expenses, while Justice Antonin Scalia cautioned, “I don’t know how you go about determining how much of a settlement is attributable to medical expenses” and therefore potentially subject to a state claim.

The court’s eventual answer, expected in June, will shape how North Carolina and other states reclaim at least some of the Medicaid funds spent on a patient’s care. North Carolina’s current law allows the state to claim one-third of a medical malpractice settlement or judgment awarded a Medicaid patient.

“The state is saying that, as to the amount of Medicaid benefits provided, the state has the right of recovery,” North Carolina Solicitor General John F. Maddrey told the court.

But attorneys for the Armstrongs, allied with the Obama administration, contend North Carolina’s automatic one-third share may be excessive. They argue that while the state might set a presumption that a one-third share is appropriate, individual hearings should determine specific allocations.

“The very problem here (is) that this statute takes one-third of a settlement or judgment regardless of the true facts of the case,” Raleigh-based attorney Christopher G. Browning Jr., who also represents the Armstrongs, told the court.

But save for Browning’s brief reference to Emily’s “absolutely horrendous injuries,” the hour-long oral argument Tuesday morning centered on the technical, rather than the poignant or personal. The name Emily was never even mentioned, in keeping with court policy concerning juveniles, and the Armstrong family members declined to comment afterward.

Emily was born in February 2000, at what’s now called the Catawba Valley Medical Center, in Hickory, N.C. Her severe injuries during childbirth led to a diagnosis of cerebral palsy.

The Armstrongs sued the obstetrician, the medical center and others, and initially pegged total damages at more than $42 million. The obstetrician, who had a history of drug abuse, voluntarily surrendered his North Carolina medical license.

North Carolina state health officials subsequently estimated that they’d spent more than $1.9 million in Medicaid funds providing medical care for Emily.

In a 2006 lawsuit settlement, the Armstrongs received $2.8 million. North Carolina officials asserted a lien on $933,333.33, one-third of the total. The state law permits North Carolina to take the lesser of either the total Medicaid spending on the patient or one-third of the court-ordered malpractice payment.

“How can you predict, particularly with a statute that wasn’t based on any empirical data, that 30 percent is normally the right amount?” asked Justice Sonia Sotomayor, the most persistent critic of North Carolina’s position. “You just picked it out of the air? You could pick 40, 50, 60. How do we draw the line?”

Justice Elena Kagan, likewise, raised pointed questions about whether North Carolina’s one-third rule was arbitrary, though she acknowledged that “the advantage of bright-line rules is they are cheap and effective.” Efficiency was also on the minds of Scalia and several other justices, who voiced skepticism about an individual hearing’s ability to nail down medical expenses.

The federal Medicaid law prohibits state governments from imposing liens on Medicaid patients’ property. However, a prior Supreme Court ruling specified that the ban on Medicaid liens applies only to the portion of a settlement that doesn’t cover medical care, such as payments for pain and suffering.

The Armstrongs’ settlement doesn’t specify how much is for medical care and how much is for other factors.

Email: mdoyle@mcclatchydc.com; Twitter: @MichaelDoyle10

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