Average Joe SCOTUS: Gallardo v. Marstiller

The petitioner, 13-year-old Gianinna Gallardo was riding along in her school bus, minding her own fucking business. When she got off the bus, a truck driver ran over her, causing serious injury, putting Gallardo in a coma. She remains in a vegetative state.

Since she is highly incapacitated, her suit is being managed by her parents and family members on her behalf, as she’s in no condition to go to SCOTUS, as cool as that might be.

As you can imagine, Gallardo’s family sued, and were eventually awarded $800,00 to cover past and future expenses. Pay attention to the “past and future” part of that, it’ll be rather important to the case.

Medicaid paid over $862k for the medical expenses she had incurred so far. When Medicaid was originally enacted, it had no provisions to recover money it had paid for healthcare costs. Once your bills were paid, they were paid.

But, in the sixties, one exception was written in that if the person whose bills were paid wins a lawsuit related to those expenses against a third party who caused the injuries, in this case the truck driver’s employer, Medicaid can claim a basic double-dip situation, and ask for their money back, since the 3rd party is now paying instead.

Since she won $800k from the driver, Medicaid was like, “Yo, we’d like our money back, please. We’ve got bills to pay, dawg.”

As per usual, SCOTUS loves these nerdy fucking weird-ass cases, where the interesting part of the case is basically settled, but there’s some weird fucking procedural question which is ambiguous, that they think needs clarified. This is yet another one of those cases.

So in this case, the issue is that the lawsuit was for “past and future” medical expenses. But the petitioner (Gallardo, the victim) argues Medicaid is only allowed to take back money paid for past expenses, which in this case, was apparently about $35,000. Team Gallardo is saying, “Whoa, Medicaid, you don’t get all of that. A lot of it is for future expenses, and you don’t get to take any of that.”

So that’s literally all that SCOTUS gets to decide. Do they divide up the $800k based on what was awarded for past and future expenses, and only let Medicaid recover the award for the past expenses portion, or do they let Medicaid take all of it until they’re made whole. Since only about $35k of their settlement was for past expenses, Medicaid sees that $765k nugget hanging out there, and they don’t want to let that shit go.

It’s also worth nothing, that this poor kid will assuredly rack up more expenses than what Medicaid or the lawsuit has gotten her, so the idea she’s being unjustly enriched somehow, is falser than false.

Counsel Brian Gowdy for Gallardo, early on, responding to Justice Thomas’ line of questioning about what costs are recoverable by Medicaid, and are they similar to child support said this:

Well, Your Honor, the analysis would still be the same whether it’s child support or tort recovery. The analysis would be—the medical care—and I said yes when you said it’s very broad, but the medical care mentioned in the assignment clause, in our view, when read in the whole text, is shorthand for medical care covered by Medicaid, furnished by Medicaid, paid for by Medicaid, and, therefore, the analysis will be whether the third-party liability covers the same care, service, or item covered by Medicaid. And my point about distinguishing between tort recoveries and childcare is tort recovery often pays for items, care, and service not covered by Medicaid.

Brian Gowdy

For example, if you’re a disabled person, you will need a special vehicle with medical equipment to be transported to your appointments. Medicaid does not cover for that, but a tortfeasor may have to pay for that. Childcare, I think, is different in the other regard in that childcare requires the parent to pay for all medical care, whether it’s covered by Medicaid or not, and, therefore, I think it’ll operate differently in that context than in the tort recovery context.

He’s basically like, “how the fuck can Medicaid take money paid for things that Medicaid never covered, or will cover in the future? That’s not fucking fair. If she only won what Medicare paid for, which is about 35 Gs in this case, by all means, take the 35 Gs back, but these greedy motherfuckers are taking everything from this poor kid. You can’t be fucking seriously even considering this right now.”

Spoiler alert: they were.

An amici for the petitioner (Gallardo) was the federal government. They agree with Gallardo. I know this is confusing, because the Medicaid law is a federal law, but apparently, each state has their own Medicaid program, with its own money, that I’m guessing operates under the federal Medicaid law? I don’t fucking know. And I still don’t after listening to this shit. I also don’t know if Medicaid, after getting all this money, will end up paying back in the future for future expenses. But anyway, it’s Florida trying to get that money back, not the federal government who wrote the law.

Counsel Vivek Suri for the federal government gets the award for the most prepared lawyer SCOTUS has ever had walk through the door. After petitioner’s counsel Gowdy was done with his argument, Vivek came in, and literally answered pretty much every fucking question every justice asked to Gowdy, as coolly and calmly as I’ve ever heard one argue. He deserves the Rico Suave award, if one exists. Here’s his opening remarks:

Mr. Chief Justice, and may it please the Court: Our position does not turn on any distinction between past and future medical expenses.

Couldn’t find a single usable image of Solicitor General Vivek Suri on Google. I saw some that might be him, but it was hard to be sure. This guy’s a fucking ghost. So here’s an image of Rico Suave instead

It instead turns on who paid for those expenses. Medicaid is entitled to the portions of the recovery that correspond to the things Medicaid paid for, and the beneficiary gets the portions of the recovery that correspond to the things the beneficiary paid for. Justice Thomas, you asked about how this would work in the context of child support or medical support provided by a parent.

Our answer is that it would work the same way.

The same kind of allocation would have to be made. Justice Alito, you asked how this would work in the context of payments that are made after the settlement.

I agree that’s something that can happen, although it’s unusual, and in that case, as I’ve said, we draw no distinction between past and future payments.

The entitlement would turn entirely on who made the payment. Justice Kagan, you asked about the word “available” in (A).

And we agree that the word “available” can be read to mean theoretically available.

But the key language here is not in (A).

It’s in (B).

(B) is the provision that specifies the pool of funds from which the recovery can be obtained.

And that’s at the very end of (B) where it says “to the extent of such legal liability.” But, if you look earlier in (B), it says such a legal liability is found to exist after medical assistance has been made available on behalf of the individual.

And that makes clear that we’re not talking about theoretical availability.

We’re talking about actually being made available. In addition, if you look at page 7A of our brief, there’s a regulation, 42 C.F.R. 433.138, which interprets (A) itself to apply to services that are furnished and not merely available under the plan. Justice Kavanaugh, you asked about the Medicare analogy, and I don’t think that analogy really helps in this context.

That’s because Medicare adopts the system that was rejected in Ahlborn.

In other words, it’s not the case that Medicare takes the pool of money that is attributable to future medical expenses.

Rather, it takes from the entire pool of the settlement. And now — we think it’s rational for Congress to have done one of two things.

You could say you limit the — the government to the pool of money that corresponds to the funds that have actually been paid for by Medicaid, and that would be fair to the beneficiary. Alternatively, you could say that the government could take the entire settlement. That would be less fair to the beneficiary, but it avoids the administrative costs and hassle of having these allocation determinations. But what’s less understandable is why Congress would have adopted the middle ground that Florida wants, where you have the administrative expense of these allocation proceedings, but you also don’t have the fairness to the beneficiary because Medicaid is going beyond the pool that corresponds to the funds that Medicaid itself has paid for.

In many ways, it’s the worst of all worlds. Justice Gorsuch, you had asked about Section 1983 and how that would apply here. The federal government agrees that the Court shouldn’t reach that issue in this case.

Justice Neil Gorsuch

It’s a difficult issue about how Section 1983 should be interpreted.

There are also complications about whether it should be under Section 1983 or Ex parte Young.

We’d urge the Court to reserve that case — that issue for future cases. Justice Breyer, your hypothetical involved Smith and Jones and Smith getting to pay I think it was 15,000 out of the 25,000. How does Medicaid recover the remaining 10,000? I think the way to deal with that is, first, the state could go after the tortfeasor directly.

It has multiple avenues for doing that.

It’s received an assignment.

It could use that assignment to bring the suit in the first place. Second, after the suit has been brought by the private individual, the state could intervene in that case. Third, after the settlement has been reached, the state could say we’re not a party to that settlement and we still want to sue the individual for the remaining money, and in that suit, the state could ask for the full extent of its expenses. But what the state is doing here is it’s not going after the tortfeasor.

It’s going after the victim of the accident, and it’s seeking funds that don’t correspond to the things it paid for. We think that’s exactly what the anti-lien clause prevents the state from doing. If there are any other questions, I welcome them.

Clearly, Vivek was ready for this shit.

Once the petitioner and the federal government were done with their arguments, it was time for the greedy fucks from Florida to chime in. Henry Whitaker for the respondents (Florida) made it clear that basically, the program is hemorrhaging money, and so they can’t be fucking around, leaving money out there on the table:

Henry Whitaker

Mr. Chief Justice, and may it please the Court: Medicaid is an important and expensive part of the social safety net.

To help keep Medicaid solvent, Congress made Medicaid the payer of last resort, meaning that other available resources should pay medical expenses before Medicaid pays.

As part of that role, Medicaid recovers money from tortfeasors who injure Medicaid beneficiaries.

When it does so, Medicaid can never be reimbursed for more than it paid out in benefits. The question here is whether the program may seek that reimbursement from a tort settlement, not only out of medical damages or medical expenses paid in the past but also for medical expenses that will be paid in the future. Section 1396k of the statute answers that question.

It provides for Medicaid beneficiaries to assign to the program rights to payment for “medical care,” not past medical care, not some complicated subset of medical care.

Medical care, period, including payments for medical care that may be necessary in the future. That reading is confirmed by subsection (B) of Section 1396k, the remainder provision.

Medical expenses may include expenses that Medicaid paid and expenses that the beneficiary paid.

The remainder provision says that if Medicaid recovers all of those medical expenses, Medicaid is reimbursed for its expenses and the remaining amount goes to the beneficiary. But, if there isn’t enough money to reimburse both Medicaid and the beneficiary, the remainder provision says that Medicaid gets paid first.

In other words, far from prohibiting Medicaid from recovering out of all medical damages, Section 1396k gives Medicaid’s reimbursement claim priority over other claims to medical expenses. The result is neither untoward nor surprising.

Medicaid can never be reimbursed for more than it paid out in benefits. Medicaid can also never receive any non-medical damages, but because it is the payer of last resort for medical expenses, it may recover from all medical damages. I welcome the Court’s questions.

~Counsel for Florida Henry Whitaker

He made an interesting point in saying that Medicaid is not a payer of first resort, it’s the last. So if there’s anyone who’s paying for medical care for the victim, then that pay must happen first, and then once that’s exhausted, then we’ll talk about Medicaid kicking in. Since in this case, Medicaid paid first, before the tort was settled, if the Gallardo’s had won the suit first, Medicaid would never have kicked in a dime yet, since they haven’t exhausted all the money from the tort. So what they’re asking for here, is no different. It’s just a timeline issue.

In a 7:2 majority, where justice Elena Kagan joined the Republican appointees, they ruled that in order for Medicaid to remain solvent, it has the right to recover any money’s from a lawsuit the claimant recovered as a result of the lawsuit relating to their injuries until Medicaid is made whole for the money they paid out.

Whether or not those damages were to pay for things Medicaid covered or not, is irrelevant. They don’t give a fuck if this leaves the patient without enough funds to cover their medical bills into the future, the law is the law. If congress doesn’t like it, congress should change it.

Justices Sotomayor and Breyer think the other seven are being the world’s biggest assholes right meow. Basically accusing the other seven of not reading the entirety of the statutes around this in context, but instead, focusing on particular segments of the law in isolation, and coming to a conclusion they might not otherwise come to.


Drop some genius on me here.

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