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Gold v. United Health Services Hospitals12/9/1999
Calendar Date: October 4, 1999 Appeal from an order of the Supreme Court (Rose, J.), entered December 22, 1998 in Broome County, which, inter alia, denied plaintiff's motion for an order reducing the amount and directing payment of the Medicaid liens asserted by lienors.
OPINION AND ORDER
Plaintiff Kathleen A. Gold commenced this medical malpractice action, individually and on behalf of her son, Abraham J. Gold (hereinafter the infant), against defendants for neurological injuries sustained by the infant at the time of his birth in 1992. The infant, who suffers from spastic quadriplegic cerebral palsy, was admitted to Broome County Developmental Center on June 1, 1994 and has remained as a 24-hour residential patient at that facility ever since. His medical expenses have been paid by Medicaid through the State Office of Mental Retardation and Developmental Disabilities (hereinafter OMRDD) and the Broome County Department of Social Services (hereinafter BCDSS). During pendency of the lawsuit, OMRDD and BCDSS filed liens pursuant to Social Services Law ยง 104-b for the recovery of medical assistance benefits provided to the infant.
While the jury was engaged in its deliberations of this case, plaintiffs and defendants entered into a stipulation regarding the maximum and minimum range of damages to be awarded. The "high-low" agreement provided a $5,000,000 defense liability cap and a base amount of $450,000 that plaintiffs would receive in the event of a defense verdict or a lower award. The jury eventually returned a verdict in plaintiffs' favor in the amount of $103,127,355.20 against defendant United Health Services Hospitals Inc., comprised of $1,784,680.20 for past medical expenses, representing the combined amount of the Medicaid liens, $91,342,675 for future medical and rehabilitative care, $5,000,000 for past pain and suffering, and $5,000,000 for future pain and suffering. The jury made no award to the infant's parents for loss of the child's services.
Because plaintiffs' recovery was limited to $5,000,000 under the terms of the "high-low" agreement, plaintiffs moved for an order seeking, inter alia, a reduction in the amount of the settlement proceeds allocated to repay the Medicaid liens. Taking into account counsel fees and expenses, plaintiffs sought to allocate $400,000 to the infant's parents for loss of services and to place the remainder of the proceeds in a supplemental needs trust for the benefit of the infant. Noting that the parties' stipulation made no provision for the recoupment of the liens and failed to allocate the proceeds among plaintiffs' causes of action, Supreme Court, in a thorough analysis, denied plaintiffs' motion with respect to decreasing the amount allocated to repayment of the Medicaid liens and providing any loss of services compensation. After deducting the amount of the liens ($1,784,680.20), disbursements ($61,510.29), and counsel fees ($643,848.97) from the settlement proceeds, the court allocated $2,173,625.83 for future care and the remaining balance of $336,334.71 was reserved for a supplemental needs trust.
Plaintiffs appeal, primarily contending that Supreme Court erred when it denied their motion to reduce the Medicaid liens in proportion to the reductions applied to the other categories of damages. The pivotal issue on appeal is whether the full amount of a personal injury settlement from a third- party tortfeasor is available to satisfy a Medicaid lien for expenditures made on behalf of an infant or if recovery is limited to only that portion of the settlement proceeds attributable to compensation for past medical services. Under the circumstances presented in this case, we conclu
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