The U.S. Supreme Court on Monday ruled that states can take only a limited amount from the legal settlements of Medicaid beneficiaries as payment for medical expenses, AP/CongressDaily reports (AP/CongressDaily, 5/1). In the case, Arkansas sought payment for medical expenses from Heidi Ahlborn, a former Medicaid beneficiary who later received a $550,000 settlement in a personal injury lawsuit after she became permanently disabled in a 1996 accident. In February 2005, the 8th U.S. Circuit Court of Appeals in St. Louis reversed a decision by a U.S. district judge to allow the Arkansas Department of Health and Human Services to place a $215,645 lien on the settlement. According to the appeals court decision, states can place a lien only on the portion of the settlement that represents payment for past medical expenses. The settlement that Ahlborn received covered loss of wages, impairment of work ability, pain and suffering, mental anxiety, and permanent disability, in addition to medical expenses (Kaiser Daily Health Policy Report, 9/28/05). The Supreme Court upheld the appeals court decision. Under the decision, Arkansas can take $35,581 of the settlement as payment for past medical expenses (AP/Seattle Post-Intelligencer, 5/1). Julie Munsell, a spokesperson for Arkansas DHHS, said that the state will adhere to the decision. William Williams, a senior associate attorney general for social and health services for Washington state who filed a brief in support of Arkansas in the case, said, "States will have to be more actively involved in lawsuits to protect their claims, and it will result in higher recovery expenses" (Daniels, Arkansas Democrat-Gazette, 5/2).

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