Medicaid Entitled to Recover From Pain and Suffering Claim


Medicaid, the federal/state partnership program providing medical care for disabled indigents, covers medical care regardless of the cause of the beneficiary’s illness or injury. A Medicaid recipient may file a lawsuit against the person causing an injury for which the beneficiary is receiving Medicaid benefits. In such a case, however, one central Medicaid rule makes it clear: the state Medicaid agency is entitled to recovery of its medical payments from the beneficiary’s settlement or judgment.

That general rule may seem clear, but of course there are complications in application of simple principles. Take, for example, Delano Grey Bear’s claim for the injuries he sustained during an operation.

Mr. Grey Bear had been a Medicaid patient since a car accident in 1978. In 1994 he underwent a surgical procedure that he claimed was botched. The North Dakota Medicaid program paid for his medical care both before and after the surgery, and would have a right to recover a portion (and perhaps all) of any settlement he received in a medical malpractice action.

Mr. Grey Bear hired lawyer Robert V. Bolinske to file suit on his behalf. The insurance company offered (and Mr. Grey Bear accepted) $30,000 in full payment for his claims.

Mr. Bolinske had given the Medicaid agency notice of the process and the agency had done nothing. Mr. Bolinske took his one-third contingency fee and sent half of the rest to the Medicaid agency to partially reimburse it for its expenditures, which were more than the entire $30,000 collected. The agency demanded all the money, though it was willing to let Mr. Bolinske retain 20% as his fees in collecting the judgment. A trial judge agreed and ordered both Mr. Grey Bear and Mr. Bolinske to turn over the funds.

Mr. Bolinske filed appeals both for his client and in his own name, arguing that a portion of the settlement money was to compensate Mr. Grey Bear for his pain and suffering. Medicaid’s claim, he insisted, should be payable only from the portion of the settlement that could be ascribed to medical expenses. And, Mr. Bolinske said, the court had no jurisdiction over him personally, since he had never been served with a lawsuit.

The State Supreme Court agreed with the trial judge that all the proceeds could be claimed by the Medicaid agency, even though some portion was intended to pay for pain and suffering. The Court reversed the award against Mr. Bolinske, however, ruling that the judge did not have jurisdiction over him. Grey Bear v. ND Dep’t of Human Svces, Aug. 23, 2002.

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