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Supreme Court ruling could affect malpractice settlements

When a child is born, families hope the baby is safe and healthy. Sometimes, however, mistakes are made by medical staff that can result in a serious birth injury to the child. In those cases, it's important that families receive proper compensation for their medical expenses, as well as for their pain and suffering.

A decision in a current U.S. Supreme Court case could have a major impact on New Mexico parents when it comes to making sure Medicaid beneficiaries receive more of the compensation they're entitled to in medical malpractice cases.

The family at the heart of the case has a child who suffered serious injuries during the delivery process, to the point that she was left with cerebral palsy. After the birth, they found out that the obstetrician in the case had a history of drug abuse and writing false prescriptions to obtain drugs. The doctor surrendered his medical license soon after the baby was born.

The family filed suit and eventually received a $2.8 million settlement. Soon after, the state claimed it had spent more than $1.9 million in Medicaid funds caring for the child, so it imposed a lien on one-third of the settlement based on a state law that allowed it to do so.

The case before the Supreme Court is based on the family's claim that the state law conflicts with federal law, which forbids states from imposing liens on the property of Medicaid patients. While a previous Supreme Court case ruled that the ban on Medicaid liens is only applicable to the portion of the settlement not covering medical care, in this case, the family's settlement didn't apportion an amount for medical care and other amounts for other factors. Therefore, the state asserts that it should have the discretion to recover the money.

If the Supreme Court rules in the family's favor, it could have a significant impact on how the state of New Mexico recovers Medicaid funds from families who win medical malpractice claims. That could mean more families with children suffering from birth injuries due to medical malpractice will be able to keep more of the compensation to which they're entitled and ensure their seriously injured children get the long-term care they need. It will be interesting to see what happens.

Source: Charlotte Observer, "Supreme Court case involves medical malpractice awards, Medicaid," Michael Doyle, Jan. 8, 2013

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