Blanton v. DEPT. OF PUBLIC HEALTH SERVICES
2011 MT 110
| Mont. | 2011Background
- Montana Dept. uses §53-2-612 to lien third-party recoveries to recoup Medicaid costs; Medicaid is payer of last resort; lien attaches to payments to the recipient from third parties.
- Terry Blanton filed Feb. 14, 2006 on behalf of a class alleging the Department collected more than entitled from third-party recoveries.
- Ahlborn (2006) held Arkansas-style lien statutes violated federal Medicaid law by reaching all settlement proceeds, not just medical-cost portions, prompting Montana to amend §53-2-612 in 2009.
- District Court held Ahlborn retroactive to uncontested, non-settled class cases not final as of Feb. 14, 1998, and used an eight-year limitations period from §27-2-202(1) to define retroactive reach; ordered data compilation.
- District Court determined interest on overcollections from collection date under §31-1-106; held private insurer could be treated as third party under federal and state Medicaid law; declined to address made whole doctrine on merits.
- This Court holds Ahlborn retroactive to all class members, permits affirmative defenses, adopts a five-year limitations period, upholds data-order, fixes interest from judgment after two years, and defines third party to include private insurers; made whole is immaterial under Ahlborn.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Retroactivity of Ahlborn to class members | Class: Ahlborn retroactive to all class members | Department: retroactivity limited to certain open claims | Ahlborn retroactive to all class members; five-year statute governs defenses against individual claims |
| Data-collection order for class claims | Class: data order appropriate to implement retroactivity | Department: overbroad data reqs | Order to compile data not an abuse of discretion; appropriate to implement retroactivity on remand |
| Interest on overcollections | Interest should run from collection date or under a contractual provision | Interest limited by § 2-9-317; not contractual | No interest from collection date; apply § 2-9-317 on remand; two-year post-judgment window governs |
| Definition of 'third party' in Medicaid liens | Private insurers are not necessarily third parties under Montana law | Statutory definition includes insurers as third parties | 'Third party' includes all sources of medical assistance, including private insurers |
| Made whole doctrine | Made whole should limit Department’s reimbursement | Ahlborn controls; made whole not implicated | Made whole doctrine immaterial under Ahlborn; affirmed focus on medical-cost recovery |
Key Cases Cited
- Ark. Dept. of Health & Human Servs. v. Ahlborn, 547 U.S. 268 (Supreme Ct. 2006) (Medicaid liens limited to medical expenses per Ahlborn)
- Harper v. Va. Dept. of Taxation, 509 U.S. 86 (Supreme Ct. 1993) (federal rules retroactivity in direct-review cases)
- Reynodl vole Casket Co. v. Hyde, 514 U.S. 749 (Supreme Ct. 1995) (new rules apply to all cases pending on direct review)
- Danforth v. Minnesota, 552 U.S. 264 (Supreme Ct. 2008) (all cases pending on direct review)
- Glendive Med. Ctr. v. Mont. Dept. of Pub. Health & Human Servs., 2002 MT 131, 310 Mont. 156, 49 P.3d 560 (Mont. 2002) (definition of 'third party' aligns with federal law)