OPINION
¶ 1 In these consolidated cases we address a question the Supreme Court left open in
Arkansas Department of Health and Human Services v. Ahlborn,
*406 FACTS AND PROCEDURAL BACKGROUND
¶ 2 Southwest Fiduciary, Inc. was appointed conservator of Rhonda Lundy after she was injured severely in an auto accident. Lundy sued third parties in the accident and ultimately settled her case for $842,696. According to a mediator, the “full value” of Lundy’s damages was between $3,000,000 and $4,000,000. Included in that total were past medical bills of $920,000. According to the mediator, Lundy agreed to compromise her claims because of “difficult liability issues.” The Arizona Health Care Cost Containment System (“AHCCCS”), which had paid $268,080 toward Lundy’s medical expenses, filed a lien for that amount against the settlement.
¶ 3 James Flynn was injured in a separate auto accident. Although the estimated value of his damages was $250,000, including billed medical expenses of $138,710, he settled his third-party tort claim for $100,000. AHCCCS, which had paid $51,760 toward Flynn’s medical expenses, sought to enforce a lien for that amount against his recovery.
¶ 4 The settlements that Lundy and Flynn entered into with their respective tortfeasors resolved their claims for all manner of damages, including past medical expenses, future medical expenses, pain and suffering, lost wages and other out-of-pocket costs. As is customary, Lundy and Flynn did not limit their medical-expense claims to the amounts they actually paid or were paid on their behalf, but demanded reimbursement from the tortfeasors of the total amount billed by hospitals and other medical providers that treated them. 1
¶ 5 During separate administrative proceedings, the issue was whether AHCCCS’s lien rights were to be measured by what it actually paid or by the victims’ total billed medical expenses. Although the director of AHCCCS decided in favor of AHCCCS, on appeal, the superior court in each case held AHCCCS’s lien for payments it had made on behalf of the victim would be reduced by the ratio that the settlement amount bore to the victim’s total claimed damages. 2
¶ 6 We have jurisdiction over these consolidated appeals pursuant to Article 6, Section 9, of the Arizona Constitution and Arizona Revised Statutes (“A.R.S.”) sections 12-2101(B) (2007) and 12-120.21 (A)(1) (2007).
DISCUSSION
A. Standard of Review.
¶ 7 AHCCCS challenges the superior court’s interpretation of Arizona’s healthcare lien statute, A.R.S. § 36-2915 (2009), and related federal statutes.
3
Statutory interpretation is a question of law that we review
de novo. Libra Group, Inc. v. State,
B. Medicaid, AHCCCS and Ahlborn.
¶8 Medicaid was established in 1965 to provide medical care to qualified low-income individuals.
See
42 U.S.C. § 1396 (2006). Each state administers its own Medicaid plan, which must conform to federal requirements.
See, e.g.,
A.R.S. §§ 36-2901 to - 2999.08 (2009). In Arizona, AHCCCS administers Medicaid services.
Arizona Ass’n of Providers for Persons with Disabilities v. State,
¶ 9 Federal law requires states to establish procedures by which state Medicaid plans may be reimbursed by third-party tortfeasors for payments the plans make on behalf of injured persons to whom tortfeasors are legally liable. 42 U.S.C. § 1396a(a)(25)(B), (H) (2006);
see also Ahlborn, 547
U.S. at 275-76,
[AHCCCS] is entitled to a lien for the charges for hospital or medical care and treatment of an injured person for which [AHCCCS] or a contractor is responsible, on any and all claims of liability or indemnity for damages accruing to the person to whom hospital or medical service is rendered, or to the legal representative of such person, on account of injuries giving rise to such claims and which necessitated such hospital care and treatment.
¶ 10 Applying federal law, the Supreme Court held in
Ahlbom
that when a Medicaid recipient settles with a tortfeasor for an amount less than her full damages, Medicaid’s share of the settlement may not exceed the portion of the settlement that represents medical expenses.
¶ 11 In
Ahlbom
the issue was whether the state Medicaid plan could recover the entirety of its lien against the victim’s settlement, and the parties stipulated to the amount the state would recover if the Court ruled against the state.
Id.
at 280-81,
¶ 12 This issue arises because of the rule in Arizona that injured persons may sue in tort to recover the full amount of their billed medical expenses caused by the tort, even though they may not have paid that amount or (any amount) of medical expenses. This “collateral source rule” prohibits tortfeasors from avoiding liability for damages in situations in which an injured party has been compensated by a third party.
Lopez v. Safeway Stores, Inc.,
¶ 13 Because the parties in Ahlbom stipulated to the relevant formula, that case did not resolve whether the “medical expenses” component of a tort settlement against which a Medicaid lien may be imposed is measured by the payments Medicaid actually made for medical services or by the billed value of those services. Depending on the facts of a particular case, the difference may be significant. In the Flynn case, for example, the negotiated settlement represented 40 percent *408 of the estimated value of the case. 5 Under the formula applied by stipulation in Ahlbom and now urged by Flynn, AHCCCS’s recovery would be calculated by multiplying the amount AHCCCS paid in past medical expenses, $51,760, by 40 percent. The result ($20,704) then would be reduced to $13,043 to account for litigation expenses. AHCCCS, however, argues its lien should be based on the proportion of Flynn’s total damages represented by billed medical expenses. It applies that proportion (56.5 percent) against the net settlement amount (the settlement amount less attorney’s fees and costs), and arrives at a lien of $32,640. 6
C. Federal and State Law Require that AHCCCS’s Lien Recovery Be Calculated Based on What AHCCCS Has Paid, Not on Total Billed Medical Expenses.
¶ 14 The statute under which AHCCCS asserted the liens at issue, AR.S. § 36-2915(A), limits the amount of any such lien to “the charges ... for which [AHCCCS] ... is responsible.” Consistent with 42 U.S.C. 1396a(a)(25)(B), which requires states to enact measures by which a state may seek “reimbursement” for Medicaid assistance payments when a third party is found liable for healthcare services, we interpret “charges ... for which [AHCCCS] ... is responsible” to mean charges actually paid by AHCCCS. Applying that principle to a tort settlement, AHCCCS’s share of a settlement should be calculated based on amounts it has paid for the victim’s medical care, not based on larger amounts reflected in bills issued by medical providers that later agree to accept less than the billed amounts as full payment.
¶ 15 Our conclusion is supported by the statute the Supreme Court labeled the Medicaid “anti-lien” provision.
See Ahlborn,
¶ 16 AHCCCS argues that
Ahlbom
allowed for the possibility of a lien based not on payments made by a Medicaid plan but on billed medical expenses incurred by the Medicaid recipient. It points to the Court’s description of the issue in that case as “whether [the state] can lay claim to more than the portion of Ahlborn’s settlement that represents medical expenses.”
Id.
at 280,
¶ 17 Although the Court did not address the issue, we take from its emphasis on the anti-lien provision the general rule that a state plan may recover from a victim’s tort settlement no more than the portion of the settlement attributable to payments the plan has made on behalf of the victim. The Court recognized that a typical tort settlement may include not only amounts representing medical costs, but also lost wages and other forms of damage.
Id.
at 280,
¶ 18 AHCCCS argues that limiting its lien in such fashion allows a Medicaid recipient an unfair windfall — the amount of the settlement that represents billed medical expenses in excess of AHCCCS’s actual payments. Any “windfall” is a consequence of the collateral source rule, however, and may exist whenever the victim of a tort receives a judgment or negotiates a settlement that includes a component for medical expenses.
See Lopez,
¶ 19 AHCCCS argues that while the collateral source rule justifiably may favor an innocent victim over a tortfeasor, the same logic does not justify favoring the victim over a government payor.
¶ 20 In addressing this contention, we first note that Arizona’s collateral source rule allows a victim whose medical expenses are paid by a government payor to seek recovery of those expenses from a tortfeasor.
Lopez,
¶ 21 Nevertheless, the Arizona legislature narrowed the benefit AHCCCS members may receive from the collateral source rule when it complied with the federal directive by enacting A.R.S. § 36-2915. As we have said, that statute creates in AHCCCS a right to a lien “for the charges ... for which [AHCCCS] is responsible.” Thus, although the collateral source rule would allow an injured person to keep for herself whatever she recovers in a judgment or settlement for medical expenses paid by her private insurer, the same is not true when those medical expenses are paid by AHCCCS.
Compare Allstate Ins. Co. v. Drake,
¶22 AHCCCS argues
In re Matey,
¶23 But the Supreme Court’s precise statement was that “the exception carved out by §§ 1396a(25) and 1396(a) is limited to
payments
for medical care.”
Ahlborn,
¶ 24 AHCCCS’s reliance on
Smith v. Agency for Health Care Administration,
¶ 25 Finally, AHCCCS argues that pursuant to 42 U.S.C. § 1396k(b), when a state Medicaid plan sues to collect payments from a third party for medical expenses, it is entitled to reimburse itself fully before remitting the remainder to the tort victim. But § 1396k is not at issue here. That provision requires states to require Medicaid recipients to assign their rights to recover “payment for medical care from any third party.” 42 U.S.C. § 1396k(a)(1)(A). In these consolidated cases, AHCCCS is not enforcing the victims’ rights by way of any assignment; rather than sue the tortfeasors in the names of the tort victims, it chose instead to enforce its lien rights against settlements the tort victims negotiated for themselves.
Compare
A.R.S. § 36-2915 (AHCCCS lien rights)
with
A.R.S. § 12-962 (2003) (State’s right to recover from tortfeasor the “reasonable
value”
of the “medical care and treatment to a person who is injured”).
9
In any event, the Supreme Court held in
Ahlbom
that even under the federal assignment statute, “the State’s assigned rights extend only to recovery of
payments
for medical care.”
D. Resolution of These Cases.
¶ 26 Having held that AHCCCS may enforce its lien rights only against that portion of a tort settlement attributable to its pay- *411 merits on behalf of the victim, we must determine the applicability of that rule to these cases.
¶ 27 AHCCCS directs us to
Russell v. Agency for Health Care Administration,
¶ 28 In the cases before us, however, AHCCCS does not argue that the settlements disproportionately undervalued the medical payments AHCCCS made on behalf of Lundy and Flynn. Its only argument, which we have rejected, is that it should be reimbursed from settlement amounts representing billed medical expenses for which neither it nor the tort victims are liable. Under the circumstances, we cannot conclude the superior court erred in presuming that the settlements in these eases should be attributed proportionately to their various components. In Lundy’s case, the court concluded that because the settlement represented 24 percent of the value of her ease, AHCCCS was entitled to recover 24 percent of what it paid toward her medical expenses, and in Flynn’s case, 40 percent.
See Lima v. Vouis,
¶29 When the proper allocation of the settlement amount to the damage component represented by AHCCCS payments is disputed, the better course is to seek the intervention of the court.
See Ahlborn,
E. AHCCCS Did Not Abuse Its Discretion in Refusing to Reduce Its Lien Against the Lundy Settlement.
¶ 30 Southwest argues on cross-appeal that the director of AHCCCS abused his discretion by not eliminating the agency’s lien against the Lundy settlement pursuant to A.R.S. § 36-2915(H) and (I). These provisions require AHCCCS to consider compromising its lien based on “[t]he nature and extent of the patient’s injury or illness,” available “insurance or other sources of indemnity,” and “[a]ny other factor relevant for a fair equitable settlement under the circumstances of a particular ease.” AHCCCS is required to compromise a claim “if, after considering the factors ..., the compromise provides a settlement of the claim that is fair and equitable.” A.R.S. § 36-2915(H).
¶ 31 We will reverse the director’s refusal to compromise AHCCCS’s claim only if “it is arbitrary, capricious, or an abuse of discretion.”
Thompson v. Ariz. Dep’t of Econ.
*412
Sec.,
CONCLUSION
¶ 32 For the reasons stated, we hold that AHCCCS’s lien rights pursuant to A.R.S. § 36-2915 are limited to that portion of a tort settlement that represents recovery of medical expenses actually paid by AHCCCS. AHCCCS does not' dispute that in such circumstances, its lien should be reduced by a proportionate amount to account for litigation expenses. Accordingly, on the records presented, we affirm the superior court’s orders. We grant Flynn’s request for reasonable attorney’s fees pursuant to A.R.S. § 12-348(A)(2) (2003) and grant Flynn and Southwest them costs on appeal contingent on compliance with Arizona Rule of Civil Appellate Procedure 21.
Notes
. Hospitals and other medical providers frequently negotiate with government programs and private medical insurers to accept lower amounts in satisfaction of their billed charges.
See Banner Health v. Med. Sav. Ins. Co.,
. Thus, if a hypothetical victim had settled with the tortfeasor for one-half of her total claimed damages, the superior court’s formula would allow AHCCCS to recover from the settlement only one-half of the amount it had paid on behalf of the victim.
. Absent material revisions, we cite a statute’s current version.
. The stipulation in
Ahlbom
resulted in the equivalency that the superior court applied in these cases: The plaintiff settled her case for roughly one-sixth of her full damages, and the state Medicaid plan was reimbursed for roughly one-sixth of what it had paid for her care.
. AHCCCS does not dispute Flynn’s assertion that his total damages (calculated pursuant to the collateral source rule) were some $250,000.
. Applying the Ahlbom formula in the Lundy case would result in a Medicaid lien of $35,221 (i.e., $842,696/$3,500,000 = 24% times $268,000 = $64,320, reduced to account for litigation expenses). By contrast, using the same formula it employed in the Flynn case, AHCCCS asserts it is entitled to a lien of $115,000 against Lundy’s recovery.
. According to the record, a hospital filed a lien against the settlement negotiated in Lundy's case but eventually agreed to release the lien. Our record does not disclose the extent, if any, to which Lundy’s settlement included compensation for any amount she herself may have paid toward her medical bills. The parties’ briefs seem to assume that AHCCCS was the only payor in both of these consolidated cases, and our analysis presumes that to be true.
Cf. Ahlborn,
. AHCCCS does not argue in these cases that it is entitled to recover from any portion of these settlements that may have been designated for future medical expenses, and we express no opinion on the merit of such an argument.
. As the Supreme Court observed, it is not clear that the Medicaid assignment statute, 42 U.S.C. § 1396k, "applies in cases where the State does not actively participate in the litigation.”