By Janice Francis-Smith The Journal Record OKLAHOMA CITY – A U.S. Supreme Court ruling has states worried about how they can recoup their Medicaid costs when the patient wins a too-small tort liability award. The Oklahoma Health Care Authority is asking the Oklahoma Legislature to address the situation this session. The court rendered a decision in Arkansas Department of Human Services v. Ahlborn in May. Nineteen-year-old Heidi Ahlborn had been severely and permanently disabled in a car accident. Arkansas’ Medicaid program paid out more than $215,000 for her medical treatment. Through settlement agreements with auto insurers, Ahlborn was awarded a total of $550,000, only $35,000 of which was designated for actual medical expenses. The court record shows Ahlborn’s settlement amounted to only about one-sixth the cost of her total damages. The state of Arkansas asserted a lien to recover the entire amount of Ahlborn’s medical expenses. Recovering the full $215,000 from Ahlborn’s award would require the balance be subtracted from funds the court had awarded Ahlborn for lost wages or pain and suffering. The court record notes that Arkansas did not ask to participate in the settlement negotiations and did not seek to reopen the judgment after the case was dismissed, but only intervened in the case when the lien was asserted. The Supreme Court ruled against the state, declaring Arkansas’ law to be in conflict with federal law. “Arkansas’ statute squarely conflicts with the federal Medicaid law’s anti-lien provision … which prohibits states from imposing liens ‘against the property of any individual prior to his death on account of medical assistance paid . . . on his behalf under the state plan,’” reads the court ruling. Arkansas had argued that the amount of money it sought to recover for medical costs was not Ahlborn’s property but the state’s, and that Ahlborn had lost her property rights the instant she applied for medical assistance. The court rejected that argument, in part because Arkansas had seen fit to create a lien on the proceeds. “(The Arkansas Department of Human Services) would not need a lien on its own property,” the court found. The Supreme Court ruling further declared that states may not establish any law in conflict with the anti-lien provision of the Medicaid Act, which prohibits reimbursement out of damages awarded for lost wages or pain and suffering. Oklahoma and other states are seeking a legal remedy that would comply with federal law while making state Medicaid costs a priority when courts award damages, said Lisa Gifford of the Oklahoma Health Care Authority. “We haven’t seen it get really horrible here in Oklahoma,” said Gifford, but the Medicaid systems in Utah and Michigan have already had legal trouble in recouping their medical costs. A settlement in Michigan would have reimbursed that state’s Medicaid program just 10 cents on the dollar, she said. Related: Cost of Medicaid For Illegal Aliens Almost $10 million Posted at 1/15/2007 12:44:00 PM