Medicaid Subrogation

I may be a little late to the party, but this is an important case concerning Medicaid subrogation. Surprisingly, it allows the parties to a settlement to frame the amount that Medicaid will receive on their lien. Perhaps someone more versed than me can explain by the Cornell Law site uses the eighth circuit cite in the heading. ARKANSAS DEPT. OF HEALTH AND HUMAN SERVS. v.AHLBORN, 547 U.S. 268 (2006).The parties by agreement reduced the Medicaid lien by 5/6. The Court in upholding the allocation against an argument that the settlement was tainted stated:

"In any event, the aspersions cast upon Ahlborn are entirely unsupported; all the record reveals is that ADHS neither asked to be nor was involved in the settlement negotiations. Whatever the bounds of the duty to cooperate, there is no evidence that it was breached here. Although more colorable, the alternative argument that a rule of full reimbursement is needed generally to avoid the risk of settlement manipulation also fails. The risk that parties to a tort suit will allocate away the State’s interest can be avoided either by obtaining the State’s advance agreement to an allocation or, if necessary, by submitting the matter to a court for decision. Pp. 17–19."