Gallardo v. Marstiller

Background

A disabled person who was catastrophically injured after stepping off a school bus received Medicaid payments for medical care. She and her family later settled a lawsuit with the parties they sued for $800,000, explicitly allocating about $35,000 for past medical bills but not assigning any amount to future medical care. Florida’s law automatically assigns to the State any right to third‑party payments for medical care and uses a formula that presumptively gives the State 37.5% of a settlement, here $300,000.

Reasoning

The central question was whether the federal Medicaid assignment law allows a State to seek reimbursement from settlement money designated to pay for future medical care. The Court looked at the text of the federal assignment provision and concluded that it covers “payment for medical care” generally, not only payments already paid by Medicaid. The Court therefore held that Florida may seek reimbursement from settlement portions allocated to future medical care and affirmed the Eleventh Circuit’s decision in Florida’s favor.

Real world impact

As a practical matter, the decision lets state Medicaid agencies try to recover from settlement funds set aside for future medical needs, not only the part labeled for past bills. Injured people who receive settlements may see a larger share claimed by Medicaid unless they can prove the settlement’s allocation was incorrect under state law.

Dissents or concurrances

The dissent argued the statutes must be read together and would limit state recovery to the portion of a settlement that pays for medical care Medicaid actually already furnished, warning the majority’s reading could be unfair to beneficiaries.