Wednesday, June 29, 2011

Third Circuit Court of Appeals Upholds Department of Public Welfare's Recovery of Medicaid Liens

In its June 29, 2011 fifty-nine (59) paged decision in the case of Tristani v. Richman, No. 09-3537, No. 09-3538 (3rd Cir. June 29, 2011 Sloviter, Hardiman, Pollak, J.) (Opinion by Hardiman) (Pollak, dissenting), the United States Court of Appeals for the Third Circuit upheld the process by which the Pennsylvania Department of Welfare pursues recoveries of its Medicaid liens in civil litigation matters.

The Third Circuit Court of Appeals noted that, for over the past 30 years, where third parties are liable in civil litigation matters for medical expenses paid out through Medicaid, the Pennsylvania Department of Public Welfare has recouped its expenditures by asserting liens against settlements and judgments.

The Third Circuit noted that the United States Supreme Court, in the case of Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268, 280 n.9, 291-92 (2006), assumed, without deciding, that such liens, when limited to the portion of a settlement or judgment constituting reimbursement for medical costs are an implied exception to the federal law that prohibits states from imposing liens on the property of Medicaid beneficiaries.

The Third Circuit Court of Appeals in this Tristani case was faced with the job of deciding “whether these liens in fact constitute such an exception.” More specifically, the issue for the Court to decide was “whether state agencies responsible for administering the Medicaid program have the authority to assert such liens and, if so, whether Pennsylvania’s statutory framework is consistent with the Supreme Court’s decision in Ahlborn."

The ultimate decision by the Third Circuit Court in Tristani was that its “examination of the text, structure, history and purpose of the Social Security Act leads [the Third Circuit Court of Appeals] to conclude that liens limited to medical costs are not prohibited by the anti-lien and anti-recovery provisions of the Act.” Accordingly, Third Circuit upheld Pennsylvania’s longstanding practice of allowing for such Medicaid liens to be recovered by the Pennsylvania Department of Public Welfare in civil litigation matters.

It is noted that Judge Pollak issued a lengthy dissenting Opinion.

Anyone desiring a copy of this decision may contact me at

I thank Attorney Patrick J. Loughren of the Pittsburgh law firm of Loughren, Loughren & Loughren PC for bringing this decision to my attention.

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