Doe v. Vermont Office of Health Access

Medicaid recipient John Doe and the State appealed a trial court's decision allowing the State to partially recover the amount of its lien against Doe's settlement with a third party. In 1992 when Doe was nine years old, he was catastrophically injured and paralyzed in an automobile accident.  Due to Doe's injuries, his mother applied for Medicaid on his behalf in 1994.  Doe later brought suit in New York Supreme Court against the alleged third-party tortfeasors.  He also sued New York State Transit Authority (NYSTA) in the New York Court of Claims.  The State of Vermont notified Doe in January 2001 that it claimed a lien against any award, judgment, or settlement stemming from the accident.  In 2001, Doe settled the lawsuit against the third parties for $8.75 million. Doe's suit against NYSTA went to trial, and in 2004, the Court of Claims awarded Doe approximately $42 million and allocated approximately $2.9 million to Doe's past medical expenses from the date of injury to the date of trial. Between the 2001 and 2006 settlements, the State paid approximately $771,111 in medical expenses for Doe's care, in addition to the medical expenses paid up to the date of the first settlement.  The State claimed a lien on the 2006 settlement for $506,810, which was the difference between the amount the State paid for Doe's medical care under Medicaid and the State's share of litigation expenses. Doe sued the State of Vermont, seeking a declaratory judgment that he satisfied the State's lien by partial payment.  On summary judgment, the court concluded that it would not undo the 2001 settlement because it was an accord and satisfaction of all claims paid for medical expenses incurred to that point in time. The State argued on appeal to the Supreme Court that the trial court should have reduced the Court of Claims' findings of future economic damages to present value before making its lien allocation. Upon review, the Supreme Court concluded the parties' agreement resolved the issues surrounding the State's lien on Doe's first settlement, while leaving open the possibility that Doe would obtain a judgment against or settlement with the NYSTA.. On these facts, the Court agreed with the trial court that there was an accord and satisfaction, and that the State accepted $594,209.03. The case was reversed and remanded to recalculate the State's lien against $771,111 in medical expenses and reasonable attorney's fees, but affirmed in all other respects.  View "Doe v. Vermont Office of Health Access" on Justia Law