June 18, 2019

Colorado Court of Appeals: No Error in Trial Court’s Calculation of Medicaid Lien

The Colorado Court of Appeals issued its opinion in State of Colorado Department of Health Care Policy & Financing v. S.P. on Thursday, June 18, 2015.

Accident—Medicaid—Settlement—Statutory Lien—Calculation.

S.P. was injured in a snowboarding accident at a ski area. As a result of her injuries, she is a paraplegic and will require ongoing medical care and assistance for the rest of her life. She applied for Medicaid assistance and was accepted. Over the course of several years, Medicaid paid $142,779 for her accident-related medical care. S.P. sued the ski area, alleging negligence, and eventually settled the case for $1 million. Medicaid was entitled to a statutory lien against the settlement for repayment of the medical assistance it had provided. The settlement agreement, however, did not specify the portion of the settlement amount attributable to medical expenses, as opposed to other categories of damages. The Medicaid administration agency sued S.P. to enforce its lien.

On appeal, both parties argued that the trial court incorrectly calculated the amount S.P. was required to repay to Medicaid. Colorado has not enacted statutory, administrative or other procedures for apportioning third-party settlements for Medicaid lien purposes. The trial court applied a proportional allocation formula to determine what amount out of S.P.’s settlement funds should be considered compensation for past medical expenses. The trial court also relied on an objective indication of S.P.’s total past medical expenses that was supported by the record.

The Court of Appeals held that the decision to rely on the amount paid rather than the amount billed by Medicaid was not clearly erroneous, and that the trial court’s method in this case was neither unreasonable nor arbitrary. The trial court also did not err in applying its formula to the gross settlement amount and properly took attorney fees into consideration in reducing the amount owed to Medicaid. The judgment was affirmed and the case was remanded to the trial court to release the funds held in its registry pursuant to the judgment.

Summary and full case available here, courtesy of The Colorado Lawyer.

Print Friendly, PDF & Email

Speak Your Mind

*