Kahrs v. SanchezKahrs v. Sanchez
1. On August 1, 1997, this Cоurt filed its opinion in this case. On August 26, 1997, the New Mexico Human Services Department (HSD) filed a motion for rehearing. Thereafter, this Court ordered Plaintiff to file a response to the motion for rehearing, which response was filed on October 17, 1997. We hereby deny HSD’s motion, but we withdraw our opinion of August 1, 1997, and substitute this opinion in its place.
2. In this case we are called upon to interpret HSD’s statutory right to reimbursement of medicaid expenditures from a medicaid recipient’s claim against a third-party tortfeasor. See
FACTUAL AND PROCEDURAL POSTURE
3. Medicaid is a federal and state-funded program administered by the states in accordance with federal law. See
4. Plaintiff applied for medicaid on or about December 26, 1989. As an eligibility requirement, Plaintiff assigned to HSD his right to medical support and other third-party payments.
5. On May 7, 1994 Plaintiff sustained serious and permanent injuries when Sanchez’s automobile collided with the motorcycle that Plaintiff was riding. As a result of the accident, HSD expended at least $35,871.85 for medical assistance on Plaintiffs behalf. Plaintiff alleged that he suffered over $500,-000 in damages resulting from physical pain and mental anguish, physical impairment, and loss of earnings and earning capacity. Although Sanchez had liability insurance of $50,000, she was otherwise judgment proof.
6. HSD discovered that Sanchez was a potentially liable third-party when Sanchez’s insurer contacted HSD to determine the amount of the medicaid claim. Thereafter, HSD notified Plaintiffs counsel of Plaintiffs assignment to HSD. On October 12, 1995 Plaintiff filed an action for personal injury against Sanchez, together with a claim for equitable reduction of HSD’s claim for reimbursement.
7. Plaintiff moved for partial summary judgment on the basis that the claim was comparable to on raised under
8. HSD maintained that its claim was a legal remedy based on
By operation of law, an assignment to the human services department of any and all rights of an applicant for оr recipient of medical assistance under the medicaid program in New Mexico or supplemental security income through the social security administration:
(1) is deemed to be made of:
(a) any payment for medical care from any person, firm or corporation, including an insurance carrier; and
(b) any recovery for personal injury, whether by judgment or contract for compromise or settlement[.]
9. Although the court granted Plaintiffs motion for partial summary judgmеnt on the law, questions of fact regarding damages remained outstanding. The parties were able to resolve the outstanding issues by a stipulation that released Sanchez in exchange for her payment of the $50,000 policy limit. Plaintiff and Sanchez also stipulated that Plaintiff suffered $469,607.29 in damages proximately caused by the accident. HSD specifically did not stipulate to damages because HSD considered the amount of damages to be irrelevant to its statutory right of reimbursement.
10. The court entered judgment in accordance with the stipulation and reduced HSD’s reimbursement to $2,546.19 after concluding that HSD’s right to reimbursement under
DISCUSSION
1.Standard of review.
11. Interpretation of
2. Argument of the parties.
12. HSD does not deny that the remedy provided by
13. Plaintiff, however, maintains that
3.
14. The parties’ differences of opinion signal an ambiguity that we cannot resolve from a plain reading of the statute. See Key v. Chrysler Motors Corp.,
15. It would appear that the legislature’s use of the same language in the context of assignment would lead to the same conclusion. However, HSD argues otherwise, and claims that assignment by operation of law by its very nature рresents a distinct and separate legal remedy to which equitable principles of subrogation do not apply. Here lies the ambiguity.
4. We do not interpret “assignment” as requiring full reimbursement under our statutory scheme.
16. HSD relies on Gutierrez v. City of Albuquerque,
17. We do not think that assignment in the context of medicaid reimbursement is as clear a signal of legislative intent. The Worker’s Compensation Act reflects a deliberative balance between the interests of employers and employees. See Singhas v. New Mexico St. Highway Dep’t,
18.When thе Gutierrez court examined the entire Act, and compared our assignment provision to those within the laws of other states, the Court found support for a plain reading: If the legislature had intended otherwise, the legislature would have prescribed a formula for equitable reduction in keeping with other portions of the Act. Id. Finally, Gutierrez distinguished White in part because White concerned our state’s implementation of a federal mandate thаt was silent with regard to the amount of reimbursement. See id.,
19. Therefore, we look for other indicia that the legislature may have intended for assignment to create a new remedy distinct from subrogation when a medicaid recipient recovers funds from liable third parties. Our goal is to ensure that we do not construe the statute to mean something other than what it says. See id. (principle underlying plain meaning rule). We begin with the purpose of the statute, sеe Montoya v. Mentor Corp.,
20. First and most importantly, both parties agree that the assignment provision was enacted for consistency with federal law. In 1984, Cоngress required state plans to incorporate assignment of rights as a condition of receiving federal approval of the plan and federal funding. See
21. As HSD notes, assignment of rights became federal law after White. See White,
22. Further, before the enactment of
23. Regulatory amendments in 1989 required medicaid recipients to “assign their rights to recovery of any third party insurance to the state as a condition of eligibility for assistance.” See Third Party Liability, N.M. Human Serv. Dep’t MAD-Rule 304.81 (filed Nov. 8,1989). Plaintiff was required to assign his right to recover from Sanchez when he applied for. medicaid in 1989. Thereafter, assignment continued to be an eligibility requirement. See Medical Assistance Program Manual, N.M. Human Serv. Dep’t MAD-Rule 810.09 (filed SRC 1/1/90), 1 N.M. Reg. No. 3, at 12 (Feb. 15, 1990) (to be eligible, medicaid applicants/reсipients required to assign their rights to medical support and payments). The State was required to pursue recovery on the assignment “where the amount of the third party reimbursement the State can reasonably expect to recover exceeds the cost of such recovery.” MAD-Rule 810.10. Enactment of
24. Second, as Plaintiff contends, we must presume that the legislature was aware of existing law, and enacted a statute consistent with existing law, because the notion of repeal by implication is disfavored. See Citation Bingo, Ltd. v. Otten, 1996 NMSC 003, ¶ 21,
25. Additionally, as Plaintiff maintains, we must read
26. HSD notes that assignment in this cаse is not an assignment of a cause of action but an assignment of Plaintiffs recovery of settlement proceeds from his personal injury action. Section 27-2-28(G) clearly provides for this assignment. However, we disagree with HSD’s position that Section 27-2-28(G) is limited to the assignment of proceeds as opposed to the assignment of other related rights. When we read this section in conjunction with the federal medicaid mandate, and our state medicaid regulations and statutory provisions concerning third-party liability, we assume without deciding that the scope of Section 27-2-28(G) is not restricted to the actual funds recovered.
27. We believe Section 27-2-28(G) aids in the implementation of Section 27-2-23. See Romero Excavation v. Bradley Constr., 1996 NMSC 010, ¶ 6,
28. Also, by virtue of assignment, HSD’s right to reimbursement receives greater protection. Once rights are assigned, they cannot be revoked without HSD’s permission. See Romero v. Earl,
29. Assignment and subrogation are equally capable of providing reimbursement. However, as the facts of this case demonstrate, not every medicaid recipient will notify HSD of a claim against a third party. By virtue of the assignment, a liable third party with notice, such as Sanchez’s insurer, was required to contact HSD. Otherwise, the third party would have been liable to HSD if Plaintiff had been paid in violation of the assignment. See Romero,
30. Finally, the two statutory provisions must be reconciled for consistency with our medicaid scheme. Once Congress mandated assignment of rights to ensure that states would seek reimbursement from third parties, the total amount of reimbursement to the states was expected to increase. See
5. Our conclusion finds support in comparable medicaid schemes in other states.
31.When we consider similar arguments made in the context of comparable legislative schemes, see Gutierrez,
32. By contrast, in those states where the legislature intended for assignment to provide full reimbursement, the statutory language is very explicit. For instance, after Underwood, the Florida Legislature amended its statute in 1990 to provide thatr
Medicaid is to be repaid in full from, and to the extent of, any third-party benefits, regardless of whether a recipient is made whole or other creditors paid. Principles of common law and equity as to assignment, lien, and subrogation are to be abrogated to the extent necessary to ensure full recovery by Medicaid from third party resоurces....
Agency for Health Care Admin. v. Associated Indus.,
33. Likewise, the Indiana Legislature amended its medicaid statute after Indiana v. Cowdell,
34. As in Larson, the statutory lien appears to be a common means of ensuring complete reimbursement of medicaid еxpenditures in every ease. See, e.g., Riddell v. California,
35. Considering the purpose of Section 27-2-28(G), its relation to our statutory scheme, еxisting law at the time of its enactment, corresponding federal law, and other states’s construction of similar legislative schemes, we conclude that “assignment” conveys no right to full reimbursement in every case. Therefore, in this case, the trial court did not err in reducing HSD’s claim for reimbursement under the facts presented.
6. Plaintiffs damages.
36. We summarily address HSD’s claim that the trial court’s finding on damages is not supported by substantial evidence. The claim presents a question оf law as opposed to an issue of fact. See Martinez v. Southwest Landfills, Inc.,
37. During the hearing on Plaintiffs motion for partial summary judgment, HSD indicated that it was willing to attempt a stipulation on the facts to avoid a trial on damages because HSD maintained that the actual amount of damages was immaterial to its claim. The stipulation enabled the court to enter final judgment and to expedite HSD’s appeal on the law. Although HSD submitted proposed findings of fact and conclusions of law in support of its legal position, HSD did not address the matter of damages.
38. By declining tо pursue its right to an evidentiary hearing on damages, we conclude that HSD waived its right to challenge the sufficiency of the evidence relied on by the court to reduce HSD’s claim. See Cockrell v. Cockrell,
39. Alternatively, we conclude that the stipulation was sufficient evidence to support the trial court’s finding because it was the only evidence available to the court once the parties agreed not to proceed to trial. Without this evidence, the trial court could not have proceeded to judgment. Thus, the finding is affirmed. See Strata Prod. Co. v. Mercury Exploration Co.,
CONCLUSION
40. Based on the foregoing, we affirm the trial court.
41. IT IS SO ORDERED.