High court grapples with Medicaid costs for teen in yearslong coma

WASHINGTON (CN) — Cautious over how a ruling could create a broad new precedent across the nation, the Supreme Court was tough on both sides Monday as it heard arguments in a Medicaid reimbursement case involving a Florida girl who has been in a coma since 2008.

Gianinna Gallardo remains in a persistent vegetative state after the 13-year-old was dropped off by her school bus and then hit by a truck. Medicaid paid $862,688 in medical expenses for Gallardo’s injuries, with a private insurer covering the additional $21,000 in expenses. 

Gallardo’s parents sued the truck owner and driver along with the school board for damages, eventually reaching a settlement for $800,000. 

When Florida’s state health agency found out about the settlement, however, it put a lien against Gallardo’s cause of action for the portion the agency paid for her past medical expenses. The lien did not apply to any future expenses, but the state later asserted that it was entitled to recover the past medical expenses it had paid from Galladro’s settlement that represented past and future medical expenses. 

A federal judge would later side with Gallardo's parents, saying the state had violated their right’s under the Medicaid Act, but the 11th Circuit reversed, sending the case to Washington today.

Bryan Gowdy, an attorney for Gallardo's parents with the firm Creed & Gowdy, argued Monday that Medicaid provides a benefit, not a loan, and that the 1965 Medicaid law has anti-lien and anti-recovery provisions to prevent what Florida is attempting to do. 

“Florida's isolated reading of the assignment clause cannot be right because it forces beneficiaries to make lifetime assignments leading to absurd results that convert Medicaid from a benefit to a loan,” Gowdy said. 

State Solicitor General Henry Whitaker argued that, because Medicaid is the payer of last resort, it can recover expenses for all medical damages. 

“To help keep Medicaid solvent, Congress made Medicaid the payer of last resort, meaning that other available resources should pay medical expenses before Medicaid pays as part of that role,” Whitaker said. “Medicaid recovers money from tortfeasors who injured Medicaid beneficiaries … But because it is the payer of last resort for medical expenses, it may recover from all medical damages.” 

Justice Sonia Sotomayor reminded her colleagues of the goal of the settlement awarded to Gallardo's parents. “It's not like that money is a windfall to her. It's being used to pay medical expenses,” the Obama appointee said. 

The Justice Department has backed Gallardo in a friend of the court brief. “Our position does not turn on any distinction between past and future medical expenses and instead turns on who paid for those expenses,” said Vivek Suri, assistant to the solicitor general at the Justice Department. “Medicaid is entitled to the portions of the recovery that correspond to the things Medicaid paid for, and the beneficiary gets the portions of the recovery that correspond to the things the beneficiary paid for.” 

Justice Elena Kagan pondered why they had to consider past or future expenses instead of what kind of services Medicaid could cover.  

“Couldn't we just read that as saying something like, you know, there are kinds of medical care that are available under the plan and regardless whether they're past or future, those are the kinds of things that are covered,” the Obama appointee said. “And then there are kinds of medical services that are not available under Medicaid and so that would not be covered.” 

Justice Brett Kavanaugh asked lawyers from the Justice Department and Florida attorney general’s office how many states would be affected by a ruling going either way — a point on which which both sides disagreed.

Justice Neil Gorsuch, a fellow Trump appointee, likewise underscored his concern about the case. “I just want to make sure we're not addressing a unicorn that doesn't exist, but something that actually does exist in the world,” Gorsuch warned.

Kavanaugh also asked why the court couldn’t just treat the case as it does with Medicare cases. “What would be wrong with resolving this and treating it in the same way as Medicare,” he asked. 

Gowdy and Whitaker did not respond to requests for comment following oral arguments. 

Follow @KelseyReichmann

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