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Martin v. State3/21/2002
majority has lost sight of these important principles. Although appellant had a property right in her cause of action against the third party, she disposed of this property right to the extent of medical expenses paid when in her application for medical assistance benefits she agreed to apply all proceeds from a liable third party and when she assigned to the state any rights to third-party payments. See Minn. Stat. §á256B.056, subd. 6 (2000). The right to dispose of property has long been considered an inherent aspect of property ownership, see Congdon v. Congdon, 160 Minn. 343, 363, 200 N.W. 76, 83 (1924), and nothing in the federal or state Medicaid law, including the anti-lien provision, suggests the right to dispose of a cause of action through assignment to the state is impaired.
Once that broad assignment was made, the anti-lien provision was no longer operative because the recipient's causes of action (to the extent of the state's expenditures) were no longer his property, and the conflict between state and federal law the majority finds is irrelevant. By looking first and foremost at the anti-lien provision instead of construing all provisions together, the majority overlooks a construction of the statute that avoids preemption problems.
This construction is consistent with the third-party recovery provisions requiring states to recover the full amounts of their expenditures under Medicaid. The federal statutes prohibit a lien on the recipient's property during the recipient's lifetime, but at the same time require the recipient to give the state, "to the extent that payment has been made under the State plan * * * the rights of such individual to payment by any other party for such health care items or services." 42 U.S.C. §á1396a(a)(25)(H) (Supp. V 1999) (emphasis added). Under federal law, "the State is considered to have acquired the rights of such individual to payment by any other party for * * * health care items or services * * * ." Id. The federal mandatory assignment provision requires states to enact laws that require recipients to assign "any rights * * * to support * * * and to payment for medical care from any third party." 42 U.S.C. § 1396k(a) (1994).
The majority construes the third-party recovery provision as limited to the recipient's right to recover payment for medical expenses. However, the statute requires a state to have in place laws:
that to the extent that payment has been made under the State plan for medical assistance in any case where a third party has a legal liability to make payment for such assistance, the State has in effect laws under which, to the extent that payment has been made under the State plan for medical assistance for health care items or services furnished to an individual, 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. 42 U.S.C. § 1396a(a)(25)(H).
A fair reading of the statute indicates that "such health care items or services" in the last clause refers to what the state has paid for, not what the recipient might recover through a settlement. Congress' intent is to limit the recovery only "to the extent that payment has been made under the State plan," not to amounts out of a third-party settlement that the recipient agrees to label payment for medical expenses.
Accordingly, the state's assignment provision requires that the recipient apply or agree to apply "all proceeds received or receivable" from any third party liable for the costs of the medical care, and that the applicant assign to the state "any rights to medical support and third party payments." Minn. Stat. § 256B.056, subd. 6 (200
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