Court Opinion

ID: 4711933
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:37:38.488395+00
Date Added: 2024-06-11T08:06:02.755604
License: Public Domain

Alexander, J.
(dissenting) — In my view, RCW 43.20B.060(2) and RCW 74.09.180 both directly conflict with 42 U.S.C. § 1396p (1994). I reach that conclusion because these statutes purport to allow the State to impose its lien on a Medicaid recipient’s entire recovery from a *53third party. Because of this direct conflict with a federal statute, the state statutes are preempted. Berger v. Personal Prods., Inc., 115 Wn.2d 267, 270, 797 P.2d 1148 (1990). I would, therefore, affirm King County Superior Court Judge J. Kathleen Learned’s well-reasoned decision granting partial summary judgment to the plaintiff. Because the majority does otherwise, I dissent.
Notwithstanding my disagreement with the result the majority reaches, I find myself in agreement with some of its conclusions. For instance, I entirely agree with its discussion of the subrogation rights of the State for medical costs it has paid pursuant to federal Medicaid law. See RCW 74.09.180(1). I also agree with it that the assignment a Medicaid recipient is required to make to the State of any “third party payments for medical care” deprives the recipient of any proprietary interest in the portion of the recovery that represents reimbursement for medical expenses that have been paid by the State. For reasons I set forth hereafter, I part company with the majority’s conclusion that the State’s lien affixes to the Medicaid recipient’s recovery beyond that which represents reimbursement for medical expenses.4
42 U.S.C. § 1396p(a)(l) (1994) provides, in pertinent part, that “[n]o lien may be imposed against the property of any individual prior to his death on account of medical assistance paid or to be paid on his behalf under the State plan[.]” On the surface, this federal statute would appear to prevent a state from imposing a lien on any portion of a Medicaid recipient’s third party recovery. The statute must, however, be considered in light of 42 U.S.C. § 1396a (a)(25)(H) (Supp. 1998), which requires states to promul*54gate statutes under which “the State is considered to have acquired the rights of such individual to payment by any other party for such health care items or services[.]” (Emphasis added.) Account must also be taken of 42 U.S.C. § 1396k (1994), which requires states to obtain an assignment of rights to recovery of payment for medical expenses from a third party as a condition of eligibility for medical assistance. When this statutory scheme is considered in its entirety, it is apparent that a state is vested with authority to require Medicaid recipients to assign to the State their right to obtain payments from another party for health care items or services.5 That coupled with the legislative declaration in RCW 74.09.185 that “the state is considered to have acquired the rights ... to payment by any other party for . . . health care,”6 leads to a conclusion that the Medicaid recipient does not acquire a proprietary interest in that portion of his or her recovery representing payment for health care items or services. It is clear, therefore, that the State is free to attach its lien to the portion of the recipient’s recovery that represents recovery of sums that the State has paid for medical expenses. RCW 74.09.180 and RCW 43.20B.060(2), however, go beyond what the State is authorized to do in that they purport to allow the Department to place a lien upon “any recovery” by the recipient. This as the trial court properly observed conflicts with the federal statutory scheme.
The majority concludes that federal law does not preempt state law “because there is no conflict.” Majority at 46. It reaches this conclusion after examining the same federal and state statutes that are set forth above. The majority seizes on the language in RCW 43.20B.060(2), which gives the Department a lien “ ‘to the extent of the value of the *55assistance paid’ ” and concludes that it “advances the purposes and objectives of the federal law.” Majority at 47 (quoting RCW 43.20B.060(2)). In my view, RCW 43.20B-.060(2) does precisely the opposite and literally flies in the face of the federal statutory scheme. In the final analysis, the majority relies on the state statute almost entirely and ignores the plain language in 42 U.S.C. § 1396a(a)(25)(H) that limits a state from acquiring any part of the recipient’s recovery from a third party beyond the payment “for such health care and services.” In sum, the majority fails to harmonize the state and federal statutes and does not overcome what is readily apparent—the state statutes are in direct conflict with the federal statute.
I observe, also, that the result the majority reaches is contrary to the interpretation we have placed on an analogous statute. In Flanigan v. Dep’t of Labor & Indus., 123 Wn.2d 418, 869 P.2d 14 (1994), we looked at RCW 51.24.060, which requires an injured worker or beneficiary to reimburse the Department of Labor and Industries when the worker or beneficiary obtains a recovery from a party at fault. La. Flanigan, we concluded that the Department could not satisfy its lien out of damages the injured worker recovered as compensation for loss of consortium, indicating that the department could not “share in damages for which it has provided no compensation” because such a result would be “absurd and fundamentally unjust.” 123 Wn.2d at 426.
The result the majority reaches here is every bit as unjust to Medicaid recipients. Under the decision, a Medicaid recipient can be unfairly deprived of amounts he or she receives as damages for pain, suffering, loss of income and the like—elements of damage that are unrelated to medical expenses that have been paid by the State. An example makes the point: Assume that a Medicaid recipient receives $10,000 in Medicaid benefits for medical expenses incurred in an accident. Assume further that the recipient later receives a damage award or settlement from a party at fault in the amount of $10,000, one half of which is to compensate the recipient for lost wages and pain and suffering. Under *56the majority opinion, the Medicaid recipient would receive not a cent of the $10,000. The State, instead, would obtain the entire recovery and would, thus, share in the portion of damages for which it has not provided compensation.
The majority suggests that any unfairness inherent in this scheme can be mitigated by the State’s ability to compromise its lien if, in its estimation, “ ‘justice, fairness and equity dictate such a decision.’ ” Majority at 51 (quoting Link v. Town of Smithtown, 175 Misc. 2d 238, 670 N.Y.S.2d 692, 696 (1997)). While the State may do that in certain cases, a Medicaid recipient has no assurance that the State would adopt a compromising position in evaluating his or her circumstances. Recipients of Medicaid should not have to rely on the mere possibility that the secretary of the Department of Social and Health Services will afford him or her a measure of equity.
I also recognize that the State has expressed concern that, in most cases where a claim against a third party is settled short of trial, it is difficult to determine what portion of the settlement represents medical payments. I agree with the trial judge that Congress has adequately addressed this concern by “requiring states to actively investigate third party recoveries and then pursue action against the third party if the benefits appearO to exceed the cost.” Order Granting Summ. J., Clerk’s Papers at 407. While I can readily understand that the result the majority reaches will make it easier for the State to recoup amounts it has paid for the benefit of Medicaid recipients, the State is not without effective ways to protect the public purse that are not inconsistent with federal law.
In the final analysis, the majority decision appears to be more influenced by its concern for replenishment of the State’s medical fund, than by a concern for doing equity to Medicaid recipients. Majority at 44, 49-50. While its concerns about the solvency of the fund are certainly legitimate, the fund should be replenished only from amounts that a Medicaid recipient receives as reimbursement for elements of damages for which the State has assumed *57responsibility.
In sum, because the result the majority reaches here is unfair and reliant on a state lien statute that goes beyond what is permitted by federal law, I dissent.
Johnson, Sanders, and Ireland, JJ., concur with Alexander, J.
Reconsideration denied December 12, 2000.

 I am not persuaded by the majoritys authority to the contrary. The court in Norwest Bank N.D., N.A. v. Doth, 159 F.3d 328 (8th Cir. 1998), for example, expressly refused to address the “question of whether the lien may be satisfied out of the entire amount of the personal injury award or settlement, or only that portion of the settlement attributable to past medical expenses.” 159 F.3d at 334. Additionally, the line of New York decisions cited in the majority opinion do not persuade me. Those cases are based entirely on policy arguments and contain no discussion of legislative intent or other authority to support their interpretation of the federal statutes.

 The trial court noted, that since 1992, Medicaid recipients must “assign their rights to ‘third party payments for medical care.’ ” Clerk’s Papers (CP) at 405. See also majority at 45 n.l (quoting the “current public assistance benefits form”).

 As the trial court observed “[t]his provision essentially acts as an assignment by operation of law of the recipient’s rights to recover from a third party payments owed for medical care as a result of third party[’s] negligence or wrong doing.” Order of Summ. J., CP at 405.