*1 IV. reasons, foregoing we will af-
For judgment
firm the of the District Court. TRISTANI, by through
Rita L. her
Attorney Fact, KARNES; Maria C. Valenta, individually,
Joshua C. similarly situated; behalf of
on others
A.H., individually parents and as guardian A.H.,
natural a minor RICHMAN, her
Estelle in both individ capacity;
ual and official Feather O.
Houston, capacity, in her individual Richman,
Estelle both her individual capacity;
and official Feather O.
Houston, capacity, in her individual
Appellants in 09-3537 Tristani, by through L.
Rita her
Attorney Fact, Karnes; Maria C. Valenta, individually,
Joshua C. similarly situated,
on behalf of others
Appellants in 09-3538. 09-3537,
Nos. 09-3538. Appeals,
United States Court
Third Circuit.
Argued April 2010.
Filed: June *2 [Argued], Lough- Loughren
Patrick J. ren, F. Loughren Loughren, Robert & Rihn, Daley, D. Aaron Robert Peirce & Associates, PA, A. Pittsburgh, Veronica Richards, Richards, Richards & Warren- dale, PA, Appellees/Cross-Appellants. [Argued], Manne Office of Jason W. Counsel, Department of Public General Welfare, PA, Pittsburgh, Appel- lants/Cross-Appellees. SLOVITER, HARDIMAN,
Before: *, Judges District and POLLAK Circuit Judge.
* Poliak, Pennsylva- Court for the Eastern District Honorable Louis H. Senior Dis- nia, sitting by designation. Judge District trict for the United States A
OPINION OF THE COURT HARDIMAN, Judge. Circuit Rita L. Tristani underwent a bunionec- the Social amended *3 tomy in that resulted in pain and for program Act to create a leg. in her surgeon discoloration Her sus- medical poor to assist the with their states deep she was pected suffering known expenses. Through program, thrombosis, re- immediately venous Medicaid, fifty medical pay as ar- hospital. Upon ferred her to the her on beneficia expenses qualified behalf of rival, by Tristani was examined a medical in cir thirty years, For more than
ries.
misdiagnosed
resident who
her condition
cumstances where third
are liable
thrombophlebitis.
superficial
Roughly
as
expenses,
Pennsylva
medical
for such
misdiagnosis,
one
after the
week
Tristani
(DPW)
Department
nia
of Public Welfare
pulmonary
suffered a massive
embolism
recouped
by asserting
expenditures
has
stroke,
partially
which left her
para-
judg
future
liens
settlements
disfigured,
lyzed,
and brain-damaged.
Department
In Arkansas
ments.
Consequently,
facility
Tristani
resides
Ahlborn,
and Human
Health
Services
where she receives full-time medical care.
268,
291-92,
9,
280 n.
126 S.Ct.
eligible for
un-
Tristani was
1752,
(2006),
state court cases filed each of the three In January Joshua Valenta was Beneficiaries). plaintiffs (collectively, injured traffic in a accident and suffered settlement, injuries. undisclosed amount. After minor, permanent relatively but $106,306.88 the DPW asserted lien assis- eligible government was Valenta care, less the cost of $15,539.61 reflect her for his tance, the DPW costs. A.H. accident, attorneys’ pro-rata fees Following his expenses.1 lien, validity of the challenged the DPW’s tortfeasor, insur- whose Valenta sued and, directly, paying the lien instead $130,000. case for carrier settled the ance approval court A.H.’s mother obtained sent Valenta’s the DPW April in an escrow ac- disputed funds place that, informing him attorney a letter litiga- of this pending count outcome in a third- recipient for a Medicaid counsel tion.2 action, Pennsylvania law liability tort claim satisfy him to DPW’s required *4 B to his client. making a distribution prior to com- May In Tristani and Valenta sent another August In the DPW in the Dis- putative menced a class action $15,581.56 a lien for asserting letter Richman, against: Estelle B. trict Court settlement, which it re- against Valenta’s Pennsylvania’s Secretary of Public Wel- $10,000 attorneys’ for to account duced Houston, fare; prede- Feather Richman’s mailed attorney promptly fees. Valenta’s cessor; Tristani and and the DPW. Valen- $10,000 satisfy the a check for the DPW sought payments ta a refund their lien. DPW, declaratory as well and in- junctive invalidating relief Medicaid liens They argued that the generally. DPW’s suffered brain young girl A.H. a who prohibited claims were the anti-lien and injuries following to correct con- surgery anti-recovery provisions of the Social Se- The DPW enrolled heart defect. genital 1396p(a)-(b). curity Act. See U.S.C. paid capitation in and fees A.H. an MCO Alternatively, they Pennsyl- asserted $25,095.91 her behalf. The totaling on recouping vania’s scheme for medical ex- pro- health care payments MCO’s A.H.’s recipients was im- penses from Medicaid $171,617.18. The DPW also viders totaled permissible Supreme under the Court’s $1,458.10 on a basis paid fee-for-service holding in Ahlbom.3 In A.H. filed a A.H.’s benefit. June against her doc- Several months after Tristani and Va- malpractice medical claim action, tors, Richman April in 2007 for an lenta commenced their which was settled Tristani, challenging validity was enrolled in a 2. In addition to 1.Unlike Valenta (MCO) organization generally, DPW’s liens A.H. asserts that the managed care that con- practice recouping the medi- provide medical DPW’s cost of tracts with exceeding capitation paid cal care fees it Pursuant to that contractual ar- assistance. impermissible. monthly Court order rangement, the MCO receives a ca- The District member, the DPW is limited to pitation enrolled did not address whether fee for each paid capitation pays recouping the it exchange the MCO health amount for which fees, seek reimbursement or if it could instead providers for the cost of the mem- service payments ex- for the full amount of Although medical care. Valenta was ber's MCO, pended by the MCO. Because this issue was paid DPW the bulk in an enrolled below, we decline to address it not addressed directly. In addition to of his medical fees interlocutory appeal. in this payments, DPW also these direct $1,001.90 capitation Va- fees on the MCO Ahlbom, behalf, ultimately Court reviewed an MCO dis- lenta’s imposition permitted inju- Arkansas law that $42.35 in with his bursed connection by Medicaid benefi- liens on recoveries made ries. to the against third Pursuant ciaries Secretaries) (collectively, for summary judg- the Secretaries’ motion and Houston ment Following two as to Tristani’s Valenta’s claims filed motion to dismiss. relief, injunctive complaint, declaratory but amendments to the Secre- and, regarding to dismiss noted an unresolved issue their again taries filed a motion standing equitable oral the District Court to seek relief. argument, after prejudice. their motion without denied order, After the District Court issued its joint In April parties Richman and Houston filed a motion to add summary judgment. filed a motion for potential standing to cure the prob- day, The next Tristani Valenta filed a lem. permitted The Court summary judgment partial who, motion add A.H. parties agreed, both had (1) they that: sought declaration standing remaining to the respect Pennsylvania’s asserting practice Medic- issues. The District thus amended (2) invalid; ability liens is the DPW’s aid prior deny order to the Secretaries’ recover made payments summary judgment motion for with regard capitation pay- MCOs is limited to validity of 62 Pa. Ann. Stat. (3) State; Pennsyl- made ments 1409(b)(7)- Pennsylvania’s statutory — determining current vania’s method attaching *5 mechanism for liens to recover- of a settlement that constitutes portion ies made Medicaid beneficiaries—and medical costs violates the Court’s granted parties’ motion to certify an holding in Ahlbom. interlocutory pursuant appeal to 28 U.S.C. 1292(b). §
The
issued a comprehen-
District Court
opinion denying
sive
Tristani and Valenta’s
II
partial summary judgment
motion for
and
Although
parties agree
in
that we
granting
part
denying
part
in
have
and
jurisdiction
interlocutory
The
over this
appeal,
Secretaries’ motion.
District Court
prohibits
obligation
law
we “have an independent
determined
federal
to de
subject-matter
asserting
jurisdic
DPW from
liens
third-
termine whether
exists,
tion
in the
recoveries obtained
even
absence of a chal
Nevertheless,
lenge
beneficiaries.
the District
party.” Arbaugh v. Y & H
1235,
Corp.,
Court denied Tristani’s and
Valenta’s
U.S.
126 S.Ct.
(internal
(2006)
damages,
for monetary
holding
tioned This issue was included the Dis liens. *6 for petition the Secretaries’ granted ter we interlocutory trict certification for Court’s the Beneficiaries filed interlocutory appeal, judg and constitutes an adverse appeal, in the District cross-appeal a notice may the ment from which Secretaries Court. appellate review.4 properly seek must confront with The first issue we ju Having possess decided that we jurisdiction the respect to our is whether appeal, the we risdiction over Secretaries’ the standing appeal have to Secretaries ju whether we have must now determine general “The of the District Court. order cross-ap the Beneficiaries’ risdiction over may appeal that a party rule is Although they filed a notice of peal. C.I.R., Ryan v. 680 decision.” favorable Court, the cross-appeal the District (3d Cir.1982) 324, (citing Elec. F.2d 325 petition failed to for leave to Beneficiaries Co., v. Thomas & Betts 307 Fittings Corp. appeal in this Court. We must decide 860, 241, 242, L.Ed. 1263 59 S.Ct. 83 U.S. deprives juris us of whether this omission (1939)). Here, the Court although District in their diction over the issues raised that the Medicaid liens asserted held cross-appeal. differently, Stated when an ultimately it impermissible, the were DPW 1166, (1980). 427 To the Supreme Court has S.Ct. 63 L.Ed.2d We note that the also case, appropriate appeal an "[i]n held that extent the otherwise lack stand- Secretaries ruling may adverse col- permitted from an continuing ing, that their interest in we hold at judgment on the merits lateral to litigation, with the outcome of this combined prevailed party who on the behest of the merits, has importance of the District Court’s collat- long as that retains stake so regarding validity determination eral satisfying requirements of appeal law, appropri- makes this Bank, Deposit Guar. Nat’l Jack- III." Art[icle] appellate case review. ate 326, 334, son, Roper, v. U.S. 100 Miss. 445 366 Court, timely District
appellant sought and received the certified order of the has is a obli- appeal, cross-appellant they properly appeal.6 leave to us on are before permission ap- seek gated separately 5 III peal? We exercise review over an plenary Corp., Motor v. Cal- Yamaha U.S.A 199, 205, 619, resolving summary
houn, order cross-motions 133 516 U.S. 116 S.Ct. (1996), Perelman, 414 judgment. Cantor v. F.3d L.Ed.2d 578 1292(b) (3d Cir.2005). explained: 430, the text of indi- 2n. In determin “[a]s 435 cates, jurisdiction appellate applies ing summary judgment appro whether to the court appeals.... order certified priate, apply we the same standard as the [Therefore,] appellate ad- court Cnty. Dep’t Court. Men District Bucks any fairly dress issue included within v. Pennsyl tal Retardation Health/Mental when we Accordingly, certified order.” (3d Cir.2004). vania, 61, F.3d 65 Sum 379 granted petition for leave Secretaries’ granted mary judgment should be when 1292(b), appeal we pursuant ob- is no genu “the movant shows there jurisdiction over tained the entire certified as to dispute ine material fact and the Court, including order of District is entitled to judgment movant as matter portions appel- that were decided in the 56(a). of law.” Fed.R.Civ.P. Transp. lant’s favor. See United Union City Local v. Albuquerque, IV (10th Cir.1999) (Briscoe, F.3d A J., Thus, concurring dissenting). Having jurisdiction lies, extent the issues raised established that cross-appeal
Beneficiaries’ included we proceed principal were substantive Appeals Congress may 5. The Courts the Second determine a lower federal 1292(b) subject-matter Tenth have held jurisdiction.” Circuits re court's Kontrick 452-56, quires separate cross-application for leave Ryan, 124 S.Ct. cross-appeal. Prey, (2004). to file a See Tranello v. 157 L.Ed.2d (2d Cir.1992); 962 F.2d 247-48 United Transp. holding respect jurisdiction City Albuquer Local 6. Our our Union 1745 v. *7 of Cir.1999) 1292(b) (10th que, § 178 be F.3d 1114 under should not understood to 1292(b), (finding jurisdiction § imply cross-appeals may no under but be that omitted with exercising appellate jurisdiction); pendent impunity. Appellate Federal Rule of Proce- cf. King, 5(b)(2) Roth v. 449 1292(b) F.3d 1282-83 requires § putative dure a (D.C.Cir.2006) (recognizing the tension be cross-appellant application to file a cross filing requirements tween the Rule 5 and of days petition 10 "within after the [initial] 1292(b), jurisdiction granted by § but 5(b)(2) jurisdic- served.” Because Rule is not avoiding engage problem declining to however, tional, by party. it must a be raised review). discretionary 443, 452-56, Ryan, See Kontrick (holding court-adopted 906 S.Ct. We note both the Second and Tenth processing be claim rule "can ... forfeited if analyses part Circuits based their on Feder- party asserting long the rule waits too to 5(b), Appellate al Rule of Procedure point”). appeal, raise the In this the Secre- governs appeals permission, provides 5(b)(2) argu- forfeited taries have their Rule cross-petition that a for a leave to file cross- Although they a ment. make one-line refer- appeal may days filed be within 10 after the impropriety petition ence to of the Beneficiaries' initial is served. At these the time decided, appeal opening in a their cases were it cross footnote to was understood that brief, again jurisdictional. recently, reply in a to their Rule 5 was footnote More however, brief, they we also concede that have "discre- Court has clarified non-statutory procedure presented by rules of cannot tion” consider the Ben- to issues regarded jurisdictional "[o]nly cross-appeal. be as because eficiaries in their made, except limited circumstances issue, namely, [in the lawfulness of DPW’s be or practice imposing judgments of liens on Id. not- at issue at case].” that Medicaid beneficiaries ob- settlements This the “anti- 1396p(b)(l). § is known as an begin tain third with from We recovery” provision. statutory provi- applicable
overview sions. B that, as provides Act The Social Pennsylvania has enacted detailed assis- receiving a condition to com- statutory attempt framework in an to tance, require “to states must individuals requirements ply with the of the Social any rights ... to assign State [to] Security Act. Consistent with the federal medical payment ... and to for support 1404(b) mandate, pro- Pa. Stat. Ann. any care individual [the has] as- acceptance vides that of medical “[t]he 1396k(a)(l)(A). 42 U.S.C. party.” an as- operate sistance benefits shall as requires to “ascertain the Act also DPW], by signment operation [the ... for legal liability pay of third law, recipient’s rights of the assistance ... and, under “in plan” and services care any care from payment medical liability is legal case where such a party.” found to exist after medical assistance has beneficiary [, Although Medicaid must ... to] made seek reimbursement been portion of liability.” assign recovery relating her legal to the extent such 1396a(a)(25)(A)-(B). State, Pennsylva- §Id. to medical costs statutory provides nia’s framework However, significance ap- to this beneficiary options number of peal, provides: the Act also prosecuting the remainder of her claim against imposed No lien party. example, a third For after to his property prior individual DPW, notice to providing account of death on beneficiary may elect not to include medi- paid or to be on his behalf damages as in her lawsuit cal costs plan, except— the State party. a third See Pa Stat. Ann. (A) judgment of a pursuant 1409(b)(5).7 beneficiary If the chooses on account of incorrect- court benefits part include of her not to medical costs individual, on ly paid behalf damages, the State will not be involved in (B) in the case of the real prosecution of her claim. nursing [who is in a individual— required by spend home and law beneficiary a Medicaid chooses When expenses, own income on those his costs, pursue damages howev- *8 reasonably expect- and who cannot er, transferring portion method of the to return ed home.] recovery vary will de- of the the State § 1396p(a)(l). Id. at This is known as the pending on whether the State is involved provision. “anti-lien” If prosecuted in the lawsuit. action is the alone, beneficiary the Medicaid after by equal importance, provides the Act Of litigation of and payment expenses the at- adjustment recovery of that or “[n]o fees, “the torneys’ agency court or shall correctly paid medical assistance on behalf judgment of the or award between plan an individual the State allocate 1409(b)(5) declaratory Although injunctive § until and 7. was not enacted seek relief. 2008, it is relevant the Beneficiaries because portion payments other made their behalf. damages the medical and sistance on The further that the Su- DPW] and shall allow first lien DPW asserts [the Ahlbom, preme of the Court’s decision in portion judg- the medical award, deciding amount which the Court assumed without ment of [in the] [the or exists, exception that such demon- an for the benefit of the expenditures DPW’s] liens strates that its are valid. beneficiary under the medical assistance 1409.1(b)(1).8 By § program.” Id. con- The Court that the Penn District held trast, jointly prosecuted by if claim is the sylvania authorizing statute Medicaid liens DPW, beneficiary pay- and the after by was preempted federal law. The Dis litigation expenses attorneys’ and ment of recognized trict between Court the tension fees, agency or shall allocate the “the court plain of the and anti- language anti-lien the medical judgment or award between recovery provisions Security of the Social portion damages other shall make Act, prohibit recouping which states from an of the [the award to out medical DPW] payments medical made on be assistance portion judgment or award [in] beneficiaries, half of Medicaid on [the] amount of benefits behalf of assignment pro forced beneficiary medical under the assis- Act, require visions of the states to 1409.1(b)(2). program.” tance Id. recover medical made payments on Relying behalf of beneficiaries. on dic
C
decision,
ta in
the Ahlbom
District
prac-
The Beneficiaries claim the DPW’s
that
determined
Medicaid beneficia
ries,
asserting
tice of
despite having
liens on recoveries made
their
assigned
recov
State,
by
recipients
ery
the anti-
violates
of medical costs to
retain an
anti-recovery
lien
provisions
enduring property
portion
interest
in this
Security
Despite having
recovery.
Social
Act.
as- of their
See Tristani
Rich
(W.D.Pa.
man,
signed
Pennsylvania
portion
F.Supp.2d
their
2009) (“Since
costs,
recovery relating
Pennsylvania
permitted
to medical
law
claim
they
property
Beneficiaries
retain
Tristani
and Valenta
recover
entire
action,
interest in their
including
damages (including
choses
amounts of their
expenses. Thus,
their
payments
by
amounts of
made
the DPW to
1409.1(b)(1)
they
provide
assistance),
claim
per-
them with medical
—which
mits
to take
lien on the
entire
their ‘prop
settlement awards were
Ahlborn,
erty.’”
settlement
(citing
constitutes
369
terms,
reasonably plain
parties.9
expressed
liable third
been
directly pursuing
ordinarily
regarded
‘that
must
be
language
the District Court
approach,
Based on
”
Con
v. Oceanic
as conclusive.’
1409.1(b)(1)
preempted
§
Griffin
that
held
tractors,
Inc.,
564, 570, 102 S.Ct.
458 U.S.
As we shall ex-
provision.
anti-lien
(1982)
3245,
Con
(quoting
Medicaid beneficiaries
clause
used,
bility
party]
general
may
a third
is found
exist.”
to
words
be
but
[of
1396a(a)(25)(B).
42
Notably,
U.S.C.
will take
connection with it the whole
regarding
by
objects
is silent
the method
statute ...
policy
and the
law,
sought.
by
must
provi-
which reimbursement
indicated
its various
that,
sions,
give
The Act also states
as a condition to
such a
to it
construction as
eligibility,
carry
Medicaid beneficiaries must as- will
into execution the will
sign
any right they
the state
have
legislature.’”
Bedford,
Kokoszka v.
417
642, 650,
par-
to recover medical costs from a third
U.S.
94 S.Ct.
L.Ed.2d
(1974)
Duchesne,
ty.
difficulty
perceive
The
we
in this case
(quoting
Brown
183, 194,
plain language
provi-
is that the
of these
U.S.
19 How.
The District Court resolve provi- The anti-lien anti-recovery apparent by interpreting conflict significantly sions predate the reimburse- require Act intervention assignment the states. ment and provisions. forced However, the did adequately shall explain, Congress pursu- As we was us, nor explain, is it apparent ing goals how its different in enacting these two holding anti-recovery provisions. consistent with the sets of the anti-lien While provision, which prohibits anti-recovery provisions were intended “adjustment seeking or recovery of ensure were beneficiaries correctly paid medical assistance directly on behalf not forced to bear the costs of of an individual care, State [medical their the reimbursement and terms, plan.” By assistance] assignment Id. forced intend- were anti-recovery provision ability limits ed to allow recoup expendi- states to their pay- states to recover medical assistance tures for medical payments ments made on behalf Medicaid benefi- when third are By held liable. ciaries, regardless specific allowing collection expendi- states to recover these Thus, method tures, utilized. the District Court’s protected public both that Pennsylvania conclusion inter- must fisc and ensured that beneficiaries did not vene in tort actions filed Medicaid bene- receive windfall recovering medical cannot ficiaries be reconciled with anti- expenses they pay. did not In order to recovery provision. goals animating effectuate the these con- provisions, flicting we must view the reim-
E assignment provi- bursement and forced Supreme The as exceptions Court has stated sions to the anti-lien and statute, ‘interpreting anti-recovery “[w]hen court provisions.11 analysis entirely 11. This consistent beneficiaries would not bear the burden of holding Court's in Ahlbom. during their medical their lifetimes. costs purpose of the anti-lien and anti-recov- Consequently, to the extent that a settlement ery provisions was ensure that Medicaid
371 1960, years Security cial Act in some five l They being. came into before Medicaid Security the Social of An examination plans for required state medical consistently has Congress Act reveals that aged the to: protecting the goals of pursued dual may imposed lien provide that no be property of Medicaid beneficia- personal individual property medical prior to his death on account of that liable third ensuring ries while paid to be aged assistance for the or expendi- states for reimburse (except plan on his behalf under the below, the As shall describe tures. we pursuant judgment of a court on time reveals that Con- Act’s evolution over incorrectly paid of benefits on account objectives to not these be gress has viewed individual), behalf and that there of such Rather, the available evidence in conflict. (ex- adjustment recovery shall or be no Congress indicates that did intend cept, of such individual after the death fall for costs would within liens medical surviving spouse, any, and if his anti-recovery of the anti-lien and scope estate) such individual’s provisions. aged correctly paid assistance for the on plan. behalf of such individual under the anti-recovery provi- and anti-lien 302(a)(ll)(E) § 42 II 1959- (Supp. U.S.C. into incorporated were the So- sions first 1961).12 terms, By cre- provision denial, avail- judgment paid‘by a third does not lifetime of thrift it is not or costs, re- able for use to the blind owner who wishes to pertain to the state has no life.”). 1965, largely make a new start in funds. As the reimbursement course those language the same was included in 42 U.S.C. assignment provisions and forced make 1396a(a)(18), clear, however, provision governing § federal portion of a settlement or grants pro- to states for medical assistance judgment to medical costs that does relate 89-97, I, 121(a), grams. § tit. See Pub.L. 79 properly belongs the state. To hold to the S.Rep 89-404, 286, (1965); Stat. 344 contrary provide Medicaid bene- No. would be cf. (1965) reprinted at 80 1965 U.S.C.C.A.N. in direct ficiaries with a windfall contraven- 1943, (stating pursuant § 1396a 2020 congressional mandate states tion of the "adjustment recovery only would made recoup the medical assistance from costs of surviving at a when there is no child time liable third age who is of 21 or is blind or under who 1962, disabled”). language dupli- § 12. In of 302 was permanently 1382(a)(15)(D), provi- § in 42 cated U.S.C. anti-recovery pro- These anti-lien and three aged, governing plans aid to sion state place visions when remained until 87-543, I, blind, or See Pub.L. tit. disabled. them 42 U.S.C. consolidated into (1962). 141(a), 97-248, 76 132(b), Stat. Discus- 1396p. See Pub.L. tit. I. during hearings indi- (1982). sion before Senate 1396p 96 Stat. Section actu- purpose that the of the was to cates ally authority to seek broadened states recipients protect the of blind of aid. homes from Medicaid beneficiaries them, circumstances, Improve An Act to the Public by allowing See Extend in certain Pro- impose Assistance and Child Services on the homes of beneficiaries liens Welfare Act, Rep. grams during the Social Other See 97- their lifetimes. S. No. Comm, (1982) (“States Purposes: Hearings on Fi- at 437 are allowed to Before S., (state- (1962) Cong. impose property including nance 87th on real liens Chief, home, [Mjedicaid Washington Nagle, benefi- ment of John F. of institutionalized Office, Blind) determines, ciaries State after notice Federation who the National hearing, ("State reasonably require applicant opportunity for a are laws which likely nursing in a home for the accept aid to a lien on his to remain blind lives."). assistance, 1396p granted remainder of their Section before he will be serve today, undergone nothing in force has applicant else can— remains convince —as adjusting exact pauperized amendments full state.... A numerous extent of his may recov- upon property is such a and its circumstances lien restriction that, purposes although represent er from Medicaid beneficiaries. For use a home free *12 system elderly ates a in which of recipients clearly her animated the enact- behalf— pay- medical are insulated from assistance of ment the anti-lien and anti-recovery ing during their their the costs of care provisions. Moreover, beneficiary’s a prop- surviv- lifetimes and the lifetimes of their erty in readily interest her home is distin- Nevertheless, system, ing spouses. guishable from the inchoate interest that recoup which allows a ultimately state to action, in in particu- she retains her chose expenditures medical assistance direct- larly since has mandated assign- ly from the of a estate deceased beneficia- that ment of chose to the state.14 We ry, in way no entitles to re- beneficiaries agree that Congress cannot intended these tain to them paid monies liable third provisions prohibit to from placing parties compensation for medical their liens on recoveries from liable par- third costs. ties, especially in light of the reimburse- The legislative history of anti-lien the assignment provisions ment and forced it provisions and anti-recovery confirms this Security later added to the Social Act. As a understanding.13 Report Senate dis- The reimbursement of provision the Act stated, cussing provision the to pursuant was first enacted in and required the congressional framework State “[a] plans state medical provide: assistance to would not a permitted of condition (A) agency that State or local admin- medical to impose assistance a lien on the istering plan will take all reason- property recipient during of a life- [her] able measures to legal ascertain the lia- However, time .... permit the bill would bility parties pay of third to for care and recovery from estate individual’s (available plan) services under aris- after the spouse [her] death of if sur- one disease, ing injury, of disability, out or Rep. 86-1856, vives at [her].” S. No. (B) that where the or local agency State (1960), reprinted in 1960 U.S.C.C.A.N. that a party knows has such a legal report 3615. The then that explains liability such agency will treat such legal “[t]his was inserted in order liability as a resource of the individual protect spouse the individual and [her] on whose behalf the care and services property, usually loss their home, are made [purposes available for during their de- Id. lifetime.” Con- gress’s termining potential recipient’s concern for protecting eligibili- a Medicaid beneficiary’s ty personal her in- for medical assistance] assets —not [and] recovering terest in on costs case a legal liability where such is however, analysis, (1984). our explained itera- supra, various L.Ed.2d 891 As we anti-recovery tions provi- of the anti-lien and plain language assignment of the forced sions provisions are irrelevant. Our focus is on fact and reimbursement of the Social that the have irreconcilably been in since Act force conflicts with that re-enacted, repeatedly anti-recovery provisions. have anti-lien been Accordingly, legislative have consistently legisla- history been recourse animated necessary tive intent here. to insulate Medicaid beneficiaries and, from the their expenses, costs of particular, 14. We need not protect decide whether Medicaid family home. prop- beneficiaries have more than nominal 13. Court has erty instructed interest of recoveries from question “where ... resolution of a of federal attributable to medical costs. law interest, turns on a statute intention Whatever extent of that Congress, statutory sharply we first to look lan- it assign- curtailed the forced guage legislative history provision, requires then to if the potential ment statutory language is assign unclear.” Blum v. Sten- Medicaid beneficiaries to this interest son, 886, 896, eligibility. S.Ct. to the state as a condition program is the [Medicaid] extent medical assistance after found exist medically indigent, to assist the behalf intended available on made has been agency will individual, apply [MJedicaid or local the State it is not consistent for such being are whose needs seek benefits those liability. legal of such legal the extent a third bymet *13 To the extent obligation. contractual 1396a(a)(25) Ill v.2 (Supp. 42 U.S.C. being pro- protection care is this that health 1965-1968). of plain language The than under the third- other vided from sources states to consider provision requires eligi- resulting making security program, the Medicaid liability when social determinations, reim- discriminatory seek and a bility is duplication third- when expended sums wasteful, public of of use[ ] bursement inefficient pay- at the time unknown party liability funds. the reim- way, In this
ments are made. 1967: Security Amendments Social of public the protects provision bursement Finance, the S. Comm. Hearing On Before beneficia- preventing while fisc (1967) (statement of Wal- Cong. 90th 1572 Although receiving a windfall. ries from Smith). lace M. anti-recovery provisions the anti-lien assignment provision of The forced reimbursement when the in force were Act was first enacted Security Social enacted, made no provision was receiving Medicaid As a of condition requirement this new attempt to reconcile benefits, assignment provision the forced recover- against states prohibition with require individuals obligates states made on payments ing medical any of assign rights, the State Instead, beneficiaries. of Medicaid behalf person or of other who is individual to con- requires states simply the statute under this eligible for medical assistance liability as an third-party any known sider individual behalf the title and on whose eligi- determining of the individual asset authority to execute legal has when seek bility, and to rights, support assignment of assis- after medical liability is discovered purpose of support for the (specified as made.15 have been payments tance by a court or administra- medical care history of reimburse- legislative The order) for medical payment tive Congress in- confirms that provision ment party. third care from recover medi- that states to ensure tended terms, 1396k(a)(l)(A). By its 42 U.S.C. on behalf made payments cal assistance individuals, aas requires provision par- whenever Medicaid beneficiaries benefits, to receiving Medicaid condition expenses. are found liable ties right to recover state their upon confer hearing: during a Senate As stated This is medical care. costs of-their many will beneficiaries Unquestionably, intent to congressional further evidence through receipt of benefits twice be not do that Medicaid beneficiaries ensure and from program, the [MJedicaid recovering medical a windfall receive insurance upon the imposed obligations they pay. costs did not system. To liability industry by protect anti-recovery provisions permits lien and 15. The reimbursement beneficiary, reim- outright assets of Medicaid deny Medicaid benefits Con- provision demonstrates liability at the time bursement third-party known when should believe that individuals gress did not and to re- eligibility is determined expenses have their medical liability entitled to third-party outlays when their cover Thus, paid twice. although the anti- is later discovered. thought of the evolution the vari- better Our review the statute described there provisions ous of the Social Act making attorney fore as in effect a only way reveals that the to harmonize the partial assignee his client’s interest conflicting language of the anti-lien and lawsuit....”); Angeles Estate Real Co. anti-recovery provisions the later-en- Kerxton, (4th F.2d Cir. forced assign- acted reimbursement and 1984) (“[U]nder general prin common law is to conclude that ment ciples, partial assignment an eq creates anti-recovery provisions anti-lien do uitable lien in assignee.”); favor of the to medical apply costs recoverable Serv., Law Research Inc. v. Martin Lutz from liable anti-lien Printers, Inc., Appellate 498 F.2d anti-recovery provisions evince con- (2d Cir.1974) (“[T]he assignment [part *14 gressional protect intent to the assets of existing right judgment] an of] [under a recipients, to Medicaid ensure that an creates immediate lien in favor of the are not to personally beneficiaries forced assignee is valid later lien bear costs of the their medical care. Meanwhile, assignor.”). creditors of the doWe not the reimbursement forced assignment provisions states to require Congress re- believe that prohibit would cover the costs of medical assistance pay- states from imposing recoup liens to medi despite prohibition ments the apparent cal costs imposing while at same time against seeking recovery of medical assis- requirement legal that has the effect of tance It payments. defies common sense creating logical such liens. The more con to that Congress pro- conclude intended to Congress clusion is that understood that rights tect of Medicaid beneficiaries to legal assignment effect of the forced they recover medical costs that never paid provision be to provide would the states Indeed, place. in the first federal law with a lien on recoveries of costs. medical requires assign beneficiaries right to their Thus, view, assignment our the forced to state, recover such medical to costs provision Congress’s is evidence of intent because it is the state —not the beneficia- except recoveries of medical assistance pays ries—that these costs. payments whenever third parties are
2 found them. liable for Our conclusion that on liens medical Court, Unlike the District dowe excepted costs are from the anti-lien and Congress believe that to require intended anti-recovery provisions by is bolstered states to intervene Medicaid beneficia- assignment provision. forced The District recoup ries’ lawsuits in order to medical assignment provi- viewed forced parties. costs from Congress third enact- sion as evidence of congressional intent to assignment ed the provision forced more require states to intervene lawsuits initi- than a decade after it began requiring ated Medicaid beneficiaries states to “seek reimbursement” for medi- parties. differently. We see it cal costs from liable parties. correctly out, As the point Secretaries purpose provision of the to ensure was partial assignment typically creates lien that states able recoup were their out- on a of recovery in favor of the lays. Thus, far from restricting state’s See, assignee. Wold, e.g., v. Matchett 818 ability recoup expenses, (7th Cir.1987) (“An F.2d ordinary forced assignment intended was lien attaches being; statutory to facilitate attorney’s recovery the state’s those lien attaches to an expectation [of recovery], court funds. in- anti-recovery provisions in lien and were weigh
Finally, practical considerations At the assets today. present, protect tended of Medicaid holding of our favor medi- thirty recoup recipients, subsequently-enacted use liens to over states paid on expenses pro- cal behalf forced and reimbursement assignment liable third See to limit beneficiaries visions were intended the financial Peters, 946 A.2d 287 Conn. State on the and en- burden Medicaid (2008). disparate n. And sure that beneficiaries did not have overwhelm- federal and state courts by recovering receive windfall supra See ingly practice. endorsed this context, they pay.16 costs did not authority Pennsylvania, 9. In note assignment the forced such dates back to 1980. imposing liens creating provisions are best viewed (“After payment 1980 Pa. Laws 510 See anti- implied exception anti-lien and attorneys’ fees the court expenses recovery of the conclu- Act. Our shall, application of the agency on the or the fact that the statu- sion bolstered lien against as a first department, allow tory mechanism created award, judgment the amount relinquish right beneficiaries to their department’s expendi- the amount payments recover medical assistance beneficiary benefit tures *15 assignment partial the state —a cre- —itself pro- the medical Consequently, ates a hold that lien. we then, Congress has gram____”). Since judgments on or liens settlements limited and amend anti-lien had occasion to prohibited by not to medical costs are has anti-recovery and chosen provisions, anti-recovery provisions anti-lien and widespread perva- and prohibit this Act. Security the Social so failure to do further practice. Its sive that Medicaid medi- supports holding our V excepted are expense cal liens A anti-recovery provisions. and See anti-lien limit Having determined that liens 575, 580, Pons, Lorillard ed to recoveries for medical costs are not (1978) (“Congress S.Ct. 55 L.Ed.2d prohibited by the anti-lien and anti-recov of an administra- presumed to be aware ery Pennsylva now turn provisions, we of a judicial interpretation statute tive apportioning nia’s settlements method it adopt interpretation when and and medical costs the remainder between change.”). reenacts statute without recovery. beneficiary’s Typically, from a beneficiary’s recovery compensate her for a vari will Act, text of the Social costs, including ety damages, structure, purpose, combined with when Pursu wages pain suffering. lost legislative history, reveals that Con- holding in ant Court’s goals gress sought accomplish different Ahlbom, may only reimbursed anti-recovery enacting in anti-lien recovery portion constituting of the hand, on one the reim- expenses. Many compensation for medical assignment provi- forced bursement and settlements, including those at the anti- on the other hand. While sions however— paid by against third Medicaid in their suits Although our the Dissent shares concern unpersuaded by ap- this respect, argues We are windfall this it proach windfall by pre- it would result in a can be avoided because Medicaid beneficiaries claiming cluding amounts tortfeasors. beneficiaries from appeal issue not specifically occurred, such reduction the Beneficiaries —are apportioned between medical costs and claim that the DPW’s liens exceed the types other of damages. The question be- scope of the they interests assigned to the how, fore us is in the explicit absence of agency violation of Ahlbom. allocation, one portion ascertain what of a settlement is allocable to B medical ex- penses recoverable the state. The District Court rejected the Benefi-
Pennsylvania has addressed this alloca- argument, ciaries’ concluding Pennsyl- problem tion by providing: validly vania law adopted a default appor- Except as provided act, otherwise in this tionment mechanism to divide settlements notwithstanding any other of between medical costs and other expenses. law, entire amount of settlement The District Court noted that although injured beneficiary’s action or 1409(b)(ll) Ahlbom, section predates claim, suit, with or without subject thereafter the interpreted DPW has it as department’s claim for reimburse- establishing a apportionment default be- ment of the provided any benefits lien tween non-medical expenses. and medical pursuant thereto, filed but in no event interpretation This has since been codified shall the department’s claim exceed one- 259.2, 55 Pa.Code which states: half of the beneficiary’s recovery after (b) In determining of a tort deducting attorney’s fees, litigation recovery that represents payment for costs, and expenses relating to medical care party, the De- injury the beneficiary. partment apply will the following inter- 1409(b)(ll). 62 Pa. As the Stat. Ann. pretations: noted, District Court the DPW has con *16 “ strued this ‘establishing] a (2) In the absence of a court order statutory default rule of allocation for tort allocating tort proceeds among cate- ” recoveries consistent with Ahlborn.’ gories damages, pro- the net /& Richman, Tristani v. 423, 609 F.Supp.2d ceeds are by law allocated to be (W.D.Pa.2009) 464 (quoting 37 Pa. Bull. available to repay injury-related 4881, 2007)). 8, 4228 (Sept. Pursuant expenses. [Medicaid] The amount of the DPW’s construction section proceeds net is computed by deduct- 1409(b)(ll), in the judicial absence of a from ing gross proceeds the at- damages, allocation of the DPW is entitled torney’s fees, litigation costs and to recover the lesser of its actual expendi expenses relating inju- tures on medical costs or one half of the ry that were the benefi- beneficiary’s recovery expenses. after ciary prior to the settlement of the In appeal, the Beneficiaries’ medical injured beneficiary’s action or claim. costs constitute less than one-half of their recoveries; therefore, the DPW has recov- (5) The Department is not bound (or, ered case, recover) in AH.’s seeks to private agreement between the par-
the full amount expendi- to a ties tort claim regarding tures, alloca- pro less a rata reduction for attor- tion proceeds. neys’ fees and costs. The Beneficiaries (d) however, argue, they If a court settled their does adjudicate claims for value, less than full and that the amount of the Department’s claim DPW’s recovery settlement, costs should the Bureau of be reduced correspondingly. Because no Hearings and Appeals jurisdiction has
377 Dep’t analogous state laws. See State appeal by bene- and determine hear Hudelson, 146 Idaho Health & v. amount of the De- ficiary contesting the Welfare 905, (2008); 439, Andrews ex 196 P.3d 911 claim. partment’s 599, 362 N.C. Haygood, rel. Andrews v. explains section regulation This (2008). 310, 669 314 S.E.2d 1409(b)(ll)’s rule of relationship to the Ahlbom, a default formally establishes Alternatively, the District Court of a establishing portion method for Pennsylvania’s apportionment held that relating to medical costs.17 recovery because, Pennsylva is valid scheme law, full com represents nia a settlement found this scheme The District Court damages, for an individual’s pensation The law. Court consistent with federal be that the Beneficiaries can implies recognized possi that Ahlbom noted not, they were not settling, claim after set manipulate would bility plaintiffs law, made whole. Under artificially depress agreements tlement claim, he subrogor “when a settles essen to medical ex attributable tially right judicial his to a determi Ahlbom, waives penses. losses, and therefore conclu nation of his risk could “be avoided suggested that this amount as sively establishes the settlement advance by obtaining State’s either damages.” full for his or, compensation necessary, if to an allocation agreement Comp. Goldberg Appeal v. Workers’ Bd. matter to a court for submitting the (Girard Co.), 152 Pa.Cmwlth. Ahlborn, 288, Provision at 126 decision.” (1993). “Hence, in footnote, 620 A.2d In a the Court stat S.Ct. effect, [Pennsylvania] law indicates that ed: his he is when an individual settles suit [Sjome adopted special rules States have claiming later that his estopped dam allocating tort settle- procedures the amount settled for.” All ages exceed where, for exam- circumstances ments in Clarke, Pa.Super. state Ins. Co. rights recovery insurers’ ple, private (1987). A.2d 1025 n. express no Although we are at issue. has never Pennsylvania Supreme Court matter, open we leave view on the rule, explicitly adopted this but as proce- rules and possibility that such demonstrate, it has quoted cases above employed to meet con- might dures *17 traction in the lower courts. gained some manipulation. about settlement cerns that, held Accordingly, the District Court District Court held that Id. at n. 18. The statutory in the of the de even absence Pennsylvania’s agency 50% allocation and allocation, doctrine fault the “made whole” “special rules and appeal provisions are fix of the Beneficiaries’ portion would this kind that are consis- procedures” of ex attributable to Medicaid settlement that the requirement tent with the federal equal at an amount to the DPW’s penses of recovery portion not exceed the State’s expenditures. actual third-party recovery attributable agree with the District Court’s con- Supreme We Medicaid-paid expenses. Pennsylvania’s apportionment have clusion that Carolina and Idaho Courts of North the current valid. Pursuant respect with scheme is similar conclusions reached that, they may uncertainty whether exception some as to with the of subsec- 17. We note regulatory appeal pro- (d), beneficiary appeal permits avail themselves tion however, agree, recovery, that to date cess. The of his this the default allocation engaged prior not in individual- the DPW has regulation to the law force is identical apportionment the Beneficiaries' set- Because the Benefi- ized the Ahlbom decision. regulation, tlements. predate the there is ciaries’ framework, statutory unhap- beneficiaries portion what of a beneficiary’s py may appeal its results the default third-party recovery may it claim reim- allocation. This mechanism is consistent expenses, bursement for Medicaid with the holding Court’s Ahl- place procedures state must have in bom, comports practice with the beneficiary allow a dissatisfied challenge Therefore, other states. we will affirm the default allocation. As the Beneficiaries portion this of the District Court’s order.18 out, point without nothing such a rule prevent 75%, would states from allocating
C 90% or even 100% of a settlement to medi- Despite the validity Pennsylva cal expenses, thereby eviscerating the rule scheme, apportionment nia’s current promulgated by Ahlbom. Because the question remains whether prior otherwise, District Court concluded we will scheme, which provide right did not reverse its respect order and re- appeal allocation, from the default is valid mand for further proceedings consistent under Ahlbom.19 The up District Court opinion. with this scheme, held problemat but we it find VI
ic. Ahlbom, the Supreme Court assumed Although the Ahlbom Court acknowl deciding without that liens on recoveries edged the existence in “special state law of made Medicaid beneficiaries for rules medi- procedures” for allocating settle cal ments, costs constitute an exception open and left possibility anti-lien and anti-recovery provisions such may employed rules to address the Social Security Act. concerns about settlement Medicaid benefi- manipulation, ciaries in at n. questioned U.S. have S.Ct. it did give this assumption by challenging unfettered discretion State’s practice allocate utilizing settlements without regard to the liens. Our exami- actual text, structure, attributable nation of the to medical ex history and penses. Indeed, purpose Ahlbom expressed a of the Social Security Act leads us preference resolving disputes allocation to conclude that liens limited to medical “either obtaining the State’s prohibited advance costs are not by the anti-lien agreement or, to an necessary, allocation if and anti-recovery provisions of the Act. by submitting the matter to a court for Accordingly, uphold Pennsylvania’s we 288, 126 decision.” Id. at S.Ct. 1752. longstanding practice of imposing such liens. express We no view as to whether allo-
cation disputes of this type adjudi- must be The Beneficiaries challenged have also court, cated instead be re- Pennsylvania’s practice of disaggregating *18 solved through other “special rules and medical costs to comport require- with the procedures.” Id. at 288 n. 126 S.Ct. ments of Ahlbom. Pennsyl- We hold that 1752. We merely hold that in determining statutory framework, vania’s current uphold 18. Pennsylvania's Because we frame- any recovery part termined that on their work, we do not reach the merits of the barred the Eleventh Amendment and the District holding Court’s premised alternative A.H., qualified immunity. doctrine of howev- on the “made er, whole” doctrine. challenged validity of the DPW’s lien prior Moreover, making payment. to a regarding Tristani’s and Valenta’s claims DPW asserted its lien before section 1409 was validity apportionment scheme are amended. A.H. therefore a viable has claim moot because correctly the District declaratory de- injunctive relief. medical services are liable for right ap- parties recipients Medicaid affords allocation, per- Specifically, is a provided by Medicaid. from the default peal scheme. apportionment default plan provide: missible must framework, not afford which did prior (A) agency or local ad- State invalid right appeal, beneficiaries take all rea- ministering plan will Ahlbom. under to ascertain le- sonable measures reasons, pay af- ... to liability parties we will of third foregoing gal For the part, and remand part, vacate available under firm for care and services consistent proceedings case for further including plan, opinion. this (i) informa- the collection of sufficient State to tion ... to enable POLLAK, dissenting. Judge, District pursue such third claims parties, I. (ii) Secretary of the submission to the majority pos- that we I with the agree (subject by the plan approval to ap- jurisdiction over the defendants’ sess pursuing Secretary) jurisdiction over possess we peal, and that parties ...; such third cross- plaintiffs’ raised in the the issues (B) legal that in case where such a those issues were to the extent appeal after medical liability is found to exist of the Dis- in the certified order included has been made available on However, the District like trict Court. where behalf of the individual and Court, I not believe intended do the State amount agencies, such as state Medicaid permit to reasonably expect can recover ex- Public Department of recovery, the ceeds the costs of such (“DPW”), impose judg- liens on Welfare reim- agency or local will seek State by Medic- settlements obtained ments and bursement for such assistance I parties.1 beneficiaries from third aid liability;.... legal extent of such dissent. respectfully therefore added) 1396a(a)(25)(A)-(B)(emphasis §Id. II. (“reimbursement” provision). plan A must also re- A. state’s enrolled in Medicaid to quire individuals in Medic- participating a condition of As right payment assign to the state their aid, a state Medicaid prepare states must parties, and to for medical care from third requirements plan comply with various to recov- cooperate with the state’s efforts in the Act. See set out Social part, In relevant payments. er those § 1396a. As relevant generally 42 U.S.C. provision states “assignment/cooperation” here, plan permit must a state when that: the state to seek “reimbursement” signal, noting parenthesis recognizes, a ''cf.” majority
1. As the Department “recipient Court's decision in Arkansas those a Medicaid Ahlborn, 547 Human Services v. Health and duty identify has a liable 280 n. 126 S.Ct. U.S. the State in providfe] information assist (2006), decid assumed without L.Ed.2d (emphasis parties.” Id. pursuing' those *19 'assign requirfe] ing can ... that "a State original). As will be discussed alteration in of, on, plac[e] part a lien ment' of below, language emphasized by recipient procures that a Medicaid settlement majority’s construction of the undercuts the making assumption, on her own.” After Security Social Act. 1396k(a)(l)(B)-(C) §§ with cited to the Court (a) purpose assisting paid For the in the amount collected shall be to support pay-
collection of medical such individual. payments ments and other for medical 1396k(a)-(b) added).2 §Id. (emphasis recipients care owed to of medical as- In addition to the reimbursement and sistance under the State plan ap- assignmeni/cooperation provisions, the So- proved subchapter, under this a State cial Security Act contains an “anti-lien” plan for medical assistance shall provision, which states that: (1) that, provide aas condition of eli- may No imposed lien be gibility for medical assistance under property any prior individual to his plan the State to an individual who death on account of medical assistance legal capacity has the to execute an paid or to be on his behalf under himself, assignment the individ- plan, except State required ual is (A) assign (A) any to rights State pursuant to judgment of a ... support to (specified support as court on account of benefits incor- purpose for the by medical care rectly paid on behalf of such indi- order) court or administrative vidual, or payment to for medical care from (B) in the case of the real any party; an individual [when the individual (B) cooperate with the ... State an inpatient in a medical insti- in obtaining support and payments tution, is required spend her (described (A)) in subparagraph own income as a condition of re- ...; himself ceiving institution, services in the (C) cooperate with the State in unlikely and is to ever be dis- identifying, providing informa- charged from the institution and pursu- tion to assist the State in to return home]. ing, any party may who be § 1396p(a)(l). Id. at The Act also contains pay liable to for care and services an “anti-recovery” provision, which states available plan. under the adjustment or recovery “[n]o (b) part Such of any amount collected correctly assistance paid on behalf by the State an assignment of an individual plan under the State made under the of this sec- made, except limited [in circumstances tion shall be retained the State not at issue in this Id. at case].” necessary to reimburse it for medi- § 1396p(b)(l). cal payments made on be- half To comply of an individual with the respect foregoing provisions whom such assignment Act, was executed Social and the remainder of such 1404(b), has enacted 62 Pa. Stat. Ann. Similarly, assistance, plan a state’s Medicaid must en- the State has effect laws un- place sure that the legal state has in which, frame- payment der extent that has work acquires right which the state plan been made under the State for medical payment from third for medical ex- assistance for health care items or services penditures is, made Medicaid. That individual, furnished to an the State is con- plan provide: must acquired rights sidered to have of such payment that to the extent that has been payment by any individual party other plan made under the State for medical as- for such health care items or services.... sistance in case where a third has 1396a(a)(25)(H). §Id. legal liability payment to make for such *20 award,” in judgment or “the amount of the “acceptance that provides which operate shall for the of the expenditures assistance benefits benefit benefi- medical [DPW], by operation to the assignment by In ciary” an made the DPW. Id.3 cases law, rights recipient’s of the settle, and which therefore lack a medical care payment to recover judicial damages, allocation of the DPW Pennsylvania has party.” from third a may impose upon lien the settlement to § Ann. 62 Pa. Stat. also enacted in expenditures recover its medical an liability in the governs which exceeding amount not “one-half of the ben- of Medicaid. Under Section context eficiary’s recovery deducting after for at- provided benefits are to a when Medicaid fees, costs, and torney’s litigation injury of an for which beneficiary because expenses relating injury paid insurer) lia- (including an third-party a 1409(b)(ll). § beneficiary.” Id. ble, beneficiary the DPW and the both action may bring independent an cause of B. If insti- third-party. the DPW against majority concludes that the various suit, right to recover from tutes it has “the provisions of the Act Social set the reasonable val- person such or insurer preceding in forth section should be provided.” so Id. ue of benefits permit agen- construed to state Medicaid 1409(b)(1). beneficiary brings § If a an cies, DPW, impose such as the liens on party, the ben- against action a liable third judgments future and settlements obtained desires, if he so “include as eficiary may, from par- Medicaid beneficiaries his claim the amount of part [Medicaid] majority opinion ties. The derives much provid- that have been or will be benefits argument of its force from its 1409(b)(5)(vi). § Id. ed” the DPW. prevents Medicaid recipients construction beneficiary If institutes an action recoveries, obtaining windfall because beneficiary party, such a third sense to conclude that “[i]t defies common notify the DPW of the suit within must Congress protect rights intended to 1409(b)(5), thirty days, and the DPW id. Medicaid beneficiaries to recover medical may intervene in the suit at time they costs that never the first 1409(b)(5)(v). However, trial,
before id. place.” Op. at 374. required is not to intervene DPW disagree majority opinion’s I with the suit, may beneficiary’s instead wait Security Act for construction of the Social proceeded judgment until the suit has First, the primary opinion three reasons. cases, resulting or settlement. ignores language the reimbursement judgment or settlement must first be used assignment/cooperation pay litigation expenses the reasonable indicates that intended which attorneys’ by the benefi- fees incurred directly litigate states to 1409.1(b)(1). Then, in cases ciary. Id. Second, the opinion liable third judgment, “the court or proceed erroneously concludes that because Con- judgment allocate the
agency shall gress implicit intended to create limited portion award between the anti-recovery provision, exception to the damages,” may and the DPW assert other broader against the medical this court must read even im- a “lien notes, Op. agency majority at n. held that a state Medicaid 3. As the see anything judicial "payment other than medi- Pennsylvania enacted the allocation seek comply expenses.” at 126 S.Ct. §in with the Su- cal 1409.1 to Ahlbom, preme Court’s decision *21 anti-recovery plied exception pro- by into the refers to direct actions state entities implied exception vision and an additional against liable parties. third Section Third, provision. into the anti-lien 1396a(a)(25)(B)requires a state to “seek opinion recognize to fails reimbursement” parties from liable third 1409(b)(5)(vi), which allows a Medicaid for the provid- cost medical assistance beneficiary part to “include as of his claim ed to an individual “in where case [against a party] third the amount of bene- legal such a liability is found to exist by fits that have will provided” been or after medical assistance has been made DPW, preempted by Social Se- available on behalf of the individual and curity Act. where the amount of reimbursement The last of three these reasons deserves reasonably expect State can to recover particular emphasis: because exceeds the recovery.” cost such The 1409(b)(5)(vi) preempted by the plain plain language statutory provi- of this Act, language of the Social Medic- sion reveals that believed that aid beneficiaries will not be able to obtain participating only states would not pur- result, windfall recoveries. As a it is not sue liable third directly, but that necessary textually to devise im- tenuous they would seeking also incur costs in plicit exceptions in order to read the Act in expenditures. recover their way prevents such recoveries. 1396k(a)(l)(C),
Under plan a state that, provide medical assistance must reason, Turning to the first the District eligibility condition of for medical as- Court held that the reimbursement and sistance, an required “individual is ... assignment/cooperation provisions, taken to cooperate with the State in identify- together, that Congress indicate did not ing, providing information to assist permit intend to state agencies pursuing, any State in third plaintiffs free-ride on the efforts of who be liable pay for care and asserting hens after a judgment or settle- services available plan.” under the This Rather, ment has been obtained. Con- statutory language indicates that Con- gress wanted states either initiate suit gress expected participating against or intervene in against actions lia- need assistance in pursuing liable third parties, ble third and wanted Medicaid re- parties. The provision reimbursement cipients cooperate those efforts 1396k(b) §in contained likewise evinces providing agencies state informa- legislative intent that state entities they might require. tion As the District directly pursue liable third explained: That provision requires a entity state 1396a(a)(25)(A)(i)-(ii) Section requires a money has collected under an as- plan state for medical assistance to take signment only to retain proceeds those all provide reasonable measures to necessary to reimburse it and the feder- “the collection of sufficient information government al given for the cost of a (as specified by Secretary in regula- recipient’s care, and to tions) to pursue enable the State to pay money the remainder of the claims parties,” and to recipient. provide
further for “the submission litigation by envisions active role in Secretary plan (subject of a to ap- entities, passive state proval by played role Secretary) pursuing the DPW in the parties.” involving cases Tris- statutory This language unambiguously tani and Valenta. *22 isolation; statutes as a whole.” Richman, we read F.Supp.2d
Tristani v.
Morton,
822, 828,
(W.D.Pa.2009)
original)
in
States v.
(emphasis
United
omitted).4
(1984);
(citations
L.Ed.2d 680
see
104 S.Ct.
Assn,
Tex. v. Timbers
also
Sav.
United
the District
rejects
majority opinion
The
Associates, Ltd., 484 U.S.
Inwood Forest
may only
that
conclusion
Court’s
365, 371, 108
wants states to initiate or intervene
this,
it follows that
the reimbursement
against
parties.
lawsuits
third
assignment/eooperation
provisions,
expressly
state that
must
2.
pursue assigned
directly against
claims
My
disagreement
second reason for
parties,
implicit
third
must
an
constitute
majority opinion
arises from its con-
exception
anti-recovery provision
to the
anti-recovery
struction of the anti-lien and
permitting states to recover from liable
provisions. The District Court found that
third
anti-recovery provisions
the anti-lien and
However,
can be rendered consistent with Section
it does not follow that
1396a(a)(25),
provision,
the reimbursement
assignment/coopera-
1396k,
assignmentycooper-
and Section
tion
an
provisions
exception
create
to the
provision, by construing
anti-recovery provision
ation
the latter
permitting states
provisions
require
assignment
“to
to recover from Medicaid beneficiaries.
purpose
enabling
of
a participating Nor does it follow that the reimbursement
directly pursue
against
state to
assignment/eooperation
parties
provid-
liable for the
impliedly repeal
costs of
must be read to
the anti-
ing medical assistance to
recipi-
provision.
Medicaid
lien
See
42 U.S.C.
Tristani,
(“No
ents.”
at
F.Supp.2d
1396p(a)(l)
609
470.
lien
imposed
The majority opinion rejects
this construc-
any
individual ...
ground
tion on the
that “the District
on account of medical
”
Court’s conclusion that
plan....
(emphasis
must
under the State
add-
ed)).6
intervene
tort actions filed Medicaid
precedents
recognize
Our
that
“ ‘[rjepeals by implication
beneficiaries cannot be reconciled with the
are not favored
anti-recovery provision”
“[b]y
presumed
because
and will not be
unless the inten-
terms,
anti-recovery provision
legislature
limits
tion of
repeal
is clear and
provision
particularly
upon
5. This last
notewor-
DPW
beneficiaries’ recoveries of
thy: By providing
payment by
the state
expenditures
from third
are
agency
beneficiary
"imposed
‘property’
purposes
on their
remainder,
13961c(b)
indicates that Con-
Tristani,
provision.”
anti-lien
gress
problem
was aware of the
that a state’s
472;
("[T]he
F.Supp.2d at
see also id.
mere
party might
lawsuit
a liable third
ob-
fact that the DPW needed to assert liens in the
recovery.
striking,
tain an excessive
It is
place
first
indicates that the
were im
liens
then,
did not include a similar
posed
'property'
[plaintiffs].”);
on the
Ahlb
provision to
address
situation of excessive
orn,
("Why,
provisions indicate that seeking rely self-interested reasons pursue agencies state upon provision of law: parties for Medic- (or expenditures, upon hope keep indi- recover imposed plaintiffs aid recipients only of) obli- vidual Medicaid expenditures their recoveries Medicaid they gation cooperate state parties, from third and then shield them- any infor- agencies by providing them with using selves from DPW the anti-lien necessary to their pursue mation claims. anti-recovery provisions, while *25 1396a(a)(25)(A)(i) (requir- See U.S.C. hopes to free-ride on efforts of DPW “the ing plan provide state to collection in plaintiffs and their counsel order to ... to of sufficient information enable the actually expenses litigating avoid the pursue against claims third State to parties, claims third The added)); (emphasis id. parties” course, to their litigation are entitled 1396k(a)(l)(C) plan state to (requiring duty positions, judiciary’s “say but “cooperate direct with the individuals Madison, v. Marburg what the law is.” identifying, providing State in infor- Cranch) (1 (1803). 137, 177, 2 L.Ed. U.S. mation pursuing, to assist State in 1409(b)(5)(vi)permits Because who pay be liable recipients to assert claims to the belonging plan” care services under the available DPW, underlying and is therefore the added)). (emphasis case, I source of the difficulties provisions reading natural of these it is question would reach whether states, wanted the preempted, ques- and would answer that alone, to pursue be able tion in the affirmative. reimburse- expenditures. Congress ment of Medicaid recip-
did not intend to authorize III.
ients to include their suits claims Security the Social The construction of
properly belong the states. Such Act faith- defended this dissent remains would, reading Act of the Social Act, plain ful while language anti-recovery because of the anti-lien eliminating possibility also that Medic- above, permit discussed Medic- aid will recipients recipients aid to obtain a windfall reeov- be able obtain wind- statute, (“FELA”), they Liability are Employers' eral Act the text of entitled "although principles (internal common-law are not great weight analysis” quota- in our necessarily dispositive questions arising un- omitted) added)). (emphasis tion FELA, rejected, they expressly der unless are fall recoveries. For reasons outlined
above, I respectfully dissent. America, STATES of
UNITED
Appellant
Ruben MITCHELL.
No. 09-4718. Appeals, States Court of
United
Third Circuit.
Argued Feb. 2011.
Opinion July Filed: