L.Q. v. California Hospital Medical Center
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Plaintiff, a severely disabled child who suffered catastrophic injuries during her birth in 2015, filed suit against various medical providers for professional negligence. In 2019, the actions were settled for $3 million. DHCS, through its director, then asserted a lien on plaintiff's settlement to recover what DHCS paid for plaintiff's medical care through the state's Medi-Cal program. The trial court denied the lien, concluding that it was prohibited by the "anti-lien" provision of the federal Medicaid Act.
The Court of Appeal concluded that the trial court erred in denying DHCS's lien. The court concluded that, while the anti-lien provision of the Medicaid Act generally prohibits liens against the property of Medicaid beneficiaries, other provisions of the Act carve out exceptions for settlements or judgments recovered from third-party tortfeasors, to the extent such settlements or judgments are attributable to payments made by the state for the beneficiaries' medical care. Accordingly, the court reversed and remanded for the trial court to determine what portion of the settlement properly is subject to DHCS's lien.
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