Sources say changes to Medicaid recovery rules in the most recent federal budget contradict a 2006 U.S. Supreme Court decision that found Medicaid programs could not be reimbursed from settlement funds for lost wages or pain and suffering.
In Arkansas Department of Health and Human Services et al. v. Heidi Ahlborn, Ms. Ahlborn received a $550,000 settlement after she was injured in a 1996 car accident.
Arkansas' Medicaid program sought to recover $215,645 in past medical expenses that it paid on Ms. Ahlborn's behalf.
The Supreme Court ruled unanimously that the Arkansas Department of Health could collect only on the portion of Ms. Ahlborn's settlement that represented payments for medical care, or $35,581.