E.M.A v. Cansler, No. 10-1865 (4th Cir. 2012)Annotate this Case
Plaintiff, a minor, sustained serious injuries at birth due to the negligence of medical professionals who attended her delivery. As a result of plaintiff's injuries, DHHS, through the state Medicaid program, paid more than $1.9 million in medical and health care expenses on her behalf. Plaintiff instituted a medical malpractice action in state court and eventually settled the action for a lump some of approximately $2.8 million. The settlement agreement did not allocate separate amounts for past medical expenses and other damages. DHHS subsequently asserted a statutory lien on the settlement proceedings pursuant to N.C. Gen. Stat 108A-57 and 59 (third-party liability statues), which asserted that North Carolina had a subrogation right and could assert a lien upon the lesser of its actual medical expenditures or one-third of the medicaid recipient's total recovery. Plaintiff brought the instant action seeking declaratory and injunctive relief pursuant to 42 U.S.C. 1983, seeking to forestall payment under federal Medicaid law known as the "anti-lien provision," 42 U.S.C. 1396p. The court was persuaded that the unrebuttable presumption inherent in the one-third cap on the state's recovery imposed by the North Carolina third-party liability statutes was in fatal conflict with federal law. Accordingly, the court vacated the judgment in favor of the Secretary and remanded for further proceedings.