SUPREME COURT OF THE UNITED STATES
_________________
No. 20–1263
_________________
GIANINNA GALLARDO, an incapacitated person, by
and through her parents and co-guardians PILAR VASSALLO AND WALTER
GALLARDO, PETITIONER
v. SIMONE MARSTILLER, in her official
capacity as SECRETARY OF THE FLORIDA AGENCY FOR HEALTH CARE
ADMINISTRATION
on writ of certiorari to the united states
court of appeals for the eleventh circuit
[June 6, 2022]
Justice Sotomayor, with whom Justice Breyer
joins, dissenting.
Where a Medicaid beneficiary recovers an award
or settlement from a tortfeasor for medical expenses, specific
provisions of the Medicaid Act direct a State to reimburse itself
from that recovery for care for which it has paid. These provisions
constitute a limited exception to the Act’s default rule
prohibiting a State from imposing a lien against the beneficiary’s
property or seeking to use any of that property to reimburse
itself. Accordingly, a State may claim portions of the
beneficiary’s tort award or settlement representing payments for
the beneficiary’s medical care, but not those representing other
compensation to the beneficiary (
e.g., damages for lost
wages or pain and suffering).
Arkansas Dept. of Health and Human
Servs. v.
Ahlborn,
547 U.S.
268, 282–286 (2006). This statutory structure recognizes that
it would be “ ‘fundamentally unjust’ ” for a state agency
to “ ‘share in damages for which it has provided no
compensation.’ ”
Id., at 288, n. 19.
Today, however, the Court permits exactly that.
It holds that States may reimburse themselves for medical care
furnished on behalf of a beneficiary not only from the portions of
the beneficiary’s settlement representing compensation for
Medicaid-furnished care, but also from settlement funds that
compensate the Medicaid beneficiary for future medical care for
which Medicaid has not paid and might never pay. The Court does so
by reading one statutory provision in isolation while giving short
shrift to the statutory context, the relationships between the
provisions at issue, and the framework set forth in precedent. The
Court’s holding is inconsistent with the structure of the Medicaid
program and will cause needless unfairness and disruption. I
respectfully dissent.
I
Congress conditions a State’s receipt of
federal Medicaid funding, see 42 U. S. C. §1396d(b), on
compliance with federal requirements for the program. The Court
today details at length one of these requirements: that a state
Medicaid plan pursue reimbursement for the State’s payments where
reimbursement is available from a third party. See
ante, at
1–3. It devotes comparatively little attention to another central
requirement: that a State not assert claims against the property of
Medicaid beneficiaries or recipients.
Under the Medicaid Act’s anti-lien provision,
enacted in 1965 as part of the original Act, “[n]o lien may be
imposed against the property of any individual prior to his death
on account of medical assistance” provided under the state Medicaid
plan, whether “paid or to be paid.” §1396p(a)(1); see
Ahlborn, 547 U. S., at 283–284. In addition, the Act’s
anti-recovery provision, also enacted in 1965, provides that “[n]o
adjustment or recovery of any medical assistance correctly paid on
behalf of an individual under the State plan may be made.”
§1396p(b)(1). Together, the anti-lien and anti-recovery provisions
establish that acceptance of Medicaid does not render a beneficiary
indebted to the State or give the State any claim to the
beneficiary’s property. In other words, Medicaid is not a loan. If
a Medicaid beneficiary’s financial circumstances change and a
beneficiary gains the ability to pay for his or her own medical
expenses, the beneficiary is not obligated to repay the State for
past expenses, no matter the magnitude of the change in
circumstances. Rather, the ordinary consequence is that the
individual simply becomes ineligible for benefits moving
forward.[
1]
In
Ahlborn, this Court held that the
Medicaid provisions enabling the State to seek reimbursement from
third parties liable for a beneficiary’s medical care (discussed in
detail below) establish a narrow exception to the anti-lien
provision. The exception applies where the beneficiary directly
sues a tortfeasor for payment of medical costs.[
2] As a threshold matter, the Court held that a
beneficiary’s settlement proceeds qualified as beneficiary
“property” protected by the anti-lien provision unless an exception
to that provision applied.
Id., at 285–286. The Court
further held that Medicaid’s assignment to the State of rights to
reimbursement from third parties “carved out” an “exception to the
anti-lien provision” permitting the State “to recover that portion
of a settlement that represents payments for medical care.”
Id., at 282, 284–285.
Importantly, the
Ahlborn Court rejected
the State’s claim that it could seek reimbursement more broadly
from the remainder of the settlement funds. It held that “the
anti-lien provision applies” to bar a State’s assertion of a lien
beyond the portion of a settlement representing payments for
medical care.
Id., at 285; accord,
Wos v.
E. M. A.,
568 U.S.
627, 636 (2013). As relevant to the case before it, the
Ahlborn Court concluded that the State could not recover
from portions of a settlement representing compensation “for
damages distinct from medical costs—like pain and suffering, lost
wages, and loss of future earnings.” 547 U. S., at 272. The
Court noted that it would be “unfair to the recipient” and
“ ‘absurd’ ” for the State to “ ‘share in damages
for which it has provided no compensation.’ ”
Id., at
288, and n. 19.
II
The Court summarizes Florida’s Medicaid
Third-Party Liability Act and the facts of petitioner Gianinna
Gallardo’s case. See
ante, at 3–5. The question presented is
whether the exception to the anti-lien provision recognized in
Ahlborn extends to permit Florida to claim the share of
Gallardo’s settlement allocated for her future medical expenses as
compensation for the State’s expenditures for her past medical
expenses.
Before answering that question, a note is in
order about what is not in dispute. Consider a hypothetical example
in which Florida has spent $1,000 on a beneficiary’s medical care,
after which the beneficiary secures a $1,500 tort settlement, $200
of which is allocated for those already-incurred medical expenses,
$500 of which is allocated for future medical care, and the
remainder of which ($800) compensates for nonmedical expenses. The
parties agree, as they must, that Florida cannot recover
anticipated expenses for services it has not furnished, but may
pursue reimbursement only for expenses it has paid (
i.e.,
Florida can recover no more than $1,000). The parties further agree
that Florida can recover these expenses from the portion of the
beneficiary’s settlement allocated for these expenses (
i.e.,
the $200), and that Florida can challenge the allocation of the
settlement if it contends that too low a portion was designated for
past medical expenses. The parties also do not dispute that Florida
cannot recover from the $800 representing nonmedical expenses. The
only dispute is whether Florida also may recover its past medical
costs from the distinct portion of the beneficiary’s settlement
representing future medical expenses (
i.e., the
$500)—expenses it has not paid and might never pay. Under a proper
reading of the applicable statutory provisions in context, Florida
may not do so.
As
Ahlborn explains, Florida’s ability to
seek reimbursement from Gallardo’s settlement hinges on
establishing that an exception to the anti-lien and anti-recovery
provisions applies. Several provisions, enacted over a span of
decades, set forth the exception relevant here. The first,
§§1396a(a)(25)(A) and (B) (collectively, the third-party liability
provision), was enacted three years after the Medicaid Act and the
anti-lien and anti-recovery provisions. The third-party liability
provision authorizes a State only to recover for “medical
assistance” that “
has been made available on behalf of the
individual,” and only “
after medical assistance has been
made available.” §1396a(a)(25)(B) (emphasis added). And it
authorizes recovery only “to the extent of,”
ibid., “the
legal liability of third parties . . . to pay for care
and services available under the plan,” §1396a(a)(25)(A). In this
context, the provision’s reference to care “available under the
plan” can only be understood to refer to care that is available by
virtue of having been paid under the plan, not care that
theoretically may or may not be made available in the future. Put
differently, as a textual matter, this provision extends only to a
third party’s liability to pay for services actually furnished by a
state plan.
Congress subsequently enacted two legal tools
for a State to use when seeking reimbursement, consistent with the
third-party liability provision, for services paid.
The first of these tools is the assignment
provision, §1396k(a)(1)(A), enacted in 1977 and made mandatory in
1984. In that provision, to “assis[t] in the collection of
. . . payments for medical care,” §1396k(a), Congress
required each state Medicaid plan to condition eligibility on
assignment of “any rights” of the beneficiary “to payment for
medical care from any third party,” §1396k(a)(1)(A). Florida rests
its argument on the understanding that this language confers upon
it a right to recover payments designated for medical care
regardless of whether those payments compensate for medical care
for which Florida actually has paid.
Several textual signals foreclose Florida’s
interpretation of the assignment provision. For one, the provision,
by its terms, does not stand alone. Instead, Congress enacted it
“[f]or the purpose of assisting in [a State’s] collection of ”
payments for medical care owed to beneficiaries. §1396k(a). It
would be anomalous, then, to read the provision to reach beyond the
third-party liability provision it “assist[s]” in implementing.
Ibid.; see
Guam v.
United States, 593
U. S. ___, ___ (2021) (slip op., at 6) (similarly interpreting
a statutory provision in light of an earlier “anchor provision”).
Supporting that understanding, Congress later amended the statute
containing the assignment provision to require beneficiaries “to
cooperate with the State in identifying . . . any third
party who may be liable to pay for care and services available
under the plan.” §1396k(a)(1)(C) (the cooperation provision). The
cooperation provision echoes the third-party liability provision’s
focus on care “available under the plan.”
Ibid. It would be
bizarre for Congress to mandate a more far-reaching assignment of a
beneficiary’s right to payment for all medical support, paid or
unpaid, but limit the beneficiary’s duty to cooperate only to
services paid. Finally, another provision of the Act directs each
State to pass laws requiring insurers to “accept . . .
the assignment to the State of any right of an individual or other
entity to payment . . . for an item or service for which
payment has been made under the State plan.” §1396a(a)(25)(I)(ii).
In this insurer acceptance provision, Congress described the
assignment provision’s mandate as specific to third-party payments
for services the State plan has funded. Taken together, these
textual indicators establish that the assignment provision reaches
only a third party’s liability for services made available by
Medicaid, not liability for services for which Medicaid has not
paid and may never pay.
The second tool Congress enacted to implement
the third-party liability provision is the acquisition provision,
§1396a(a)(25)(H). A 1990 General Accounting Office report found
that some health insurers were “thwart[ing]” the assignment
provision by “refusing to pay [States] for any of several reasons,”
including by declining to recognize Medicaid assignments or by
insisting that such assignments conflicted with their insurance
contracts. Medicaid: Legislation Needed to Improve Collections From
Private Insurers 5 (GAO/HRD–91–25, Nov.). Congress addressed this
in 1993 by directing each State to enact laws under which the State
automatically acquires a beneficiary’s rights to third-party
payments specifically “for health care items or services furnished”
to the beneficiary, without the need for separate assignments.
§1396a(a)(25)(H). The text of this acquisition provision, too,
clearly restricts a State’s acquisition to the portion of a
third-party payment pertaining to “health care items or services”
for which “payment has been made under the State plan” and does not
extend to third-party payments for services the plan has not
furnished.
Ibid.; see
ante, at 7.
This Court’s task is to interpret these
provisions “ ‘as a symmetrical and coherent regulatory
scheme’ ” while “ ‘fit[ting] . . . all parts
into an harmonious whole.’ ”
FDA v.
Brown &
Williamson Tobacco Corp.,
529 U.S.
120, 133 (2000). Doing so here leads to only one “symmetrical
and coherent” conclusion: that the assignment and acquisition
provisions work in tandem to effectuate the third-party liability
provision. As explained by the United States as
amicus
curiae in support of Gallardo, Congress “added the belt” (the
acquisition provision) “because it feared that the suspenders” (the
assignment provision) “were not doing their job.” Brief for United
States as
Amicus Curiae 29. The two provisions take
different paths toward the same goal, and each reinforces the
other. All of the provisions enable a State to reimburse itself for
expenses it has paid, not for expenses it may or may not incur in
the future. None of the provisions authorize a State to seek such
reimbursement from the portions of a beneficiary’s tort settlement
representing payments for care for which the State has not
paid.
This interpretation is also consistent with the
structure of the Medicaid program as a whole, under which a State’s
recovery from a beneficiary’s compensation in tort is permissible
under a narrow exception to the general, asset-protective rule
established by the anti-lien and anti-recovery provisions.
Ahlborn further explained that the third-party liability
provision and acquisition provision both “reinforce[d] the
limitation implicit in the assignment provision.” 547 U. S.,
at 280. In particular, the Court described the acquisition
provision’s requirement (that a State enact laws under which it
acquires a beneficiary’s rights to third-party payments for “health
care items or services furnished to an individual” “under the State
plan,” §1396a(a)(25)(H)) as “reiterat[ing]” and “echo[ing]” the
assignment provision’s requirement (that a state plan condition
eligibility on a beneficiary’s assignment of rights to payment).
Id., at 276, 281.
Ahlborn’s repeated recognition of
the relationships between these three provisions cannot be squared
with Florida’s primary argument, which would sever the provisions
and read the assignment provision to eclipse the limitations of the
other two.
Moreover, Medicaid is an insurance statute, and
Ahlborn’s discussion of the unfairness that would ensue from
a State’s “ ‘shar[ing] in damages for which it has provided no
compensation,’ ”
id., at 288, n. 19, tracks
background principles of insurance law. Under those principles,
recovery by an insurer against a third party “is generally limited
to the same elements as those for which [the insurer] has made
payment,” absent contractual terms to the contrary. 16 S. Plitt, D.
Maldonado, J. Rogers, & J. Plitt, Couch on Insurance §226:36
(3d ed. 2021); see Brief for United States as
Amicus Curiae
21–22. This, too, supports a cohesive reading of these provisions
as allowing States to recover their past expenses only from sources
that compensate for the care and services state plans actually have
furnished.[
3]
An additional absurdity would flow from an
overbroad reading of the assignment provision decoupled from its
companions. Florida maintains that the assignment provision’s
reference to “any rights . . . to payment for medical
care from any third party,” §1396k(a)(1)(A), permits recovery from
settlement funds compensating for all medical expenses, past or
future. If this provision were interpreted in isolation to sweep so
broadly, however, its text would place no temporal limitation on
the rights assigned to the State. For example, if Medicaid were to
fund an individual’s medical care as a teenager, the State would be
entitled to recover the costs of that care from any unrelated
future tort settlement for medical expenses, regardless of whether
the individual remained on Medicaid or the state plan furnished any
services related to those future injuries. Such a nonsensical
“lifetime assignment,” Brief for Petitioner 32, would constitute an
“unfair” erosion of the anti-lien provision,
Ahlborn, 547
U. S., at 288, contravening Congress’ careful design. In
contrast, a harmonious reading of the statute, consistent with
Ahlborn, limits the funds from which a State may recover to
those awarded for expenses paid and therefore presents no such
concern.
III
Despite the foregoing, the Court reads the
assignment provision standing alone to establish, unlike all the
other provisions of the Act at issue, a substantially broader right
to recover from payments for all medical care, whether paid by the
State or not. The Court commits several errors on the path to its
holding, which departs from the statutory scheme as understood in
Ahlborn and forces the Court to adopt an implausible
workaround in order to mitigate the absurd consequence, discussed
above, of its acontextual reading.
A
The Court’s analysis starts off backward. The
Court states first that the Act requires a State to condition
Medicaid eligibility on assignment of rights, and only then notes
that the anti-lien provision “also” limits States’ recovery
efforts.
Ante, at 2. In fact, the anti-lien and
anti-recovery provisions establish a general rule, and the
subsequently enacted third-party liability provision and its
companions create a limited exception. That exception, in turn,
should not be construed “to the farthest reach of [its] linguistic
possibilit[y] if that result would contravene the statutory
design.”
Maracich v.
Spears,
570 U.S.
48, 60 (2013). The Court’s misframing, however, causes it to
displace the background principle of the anti-lien and
anti-recovery provisions by relying on language in the assignment
provision that is vague at best.
The Court places great weight on the assignment
provision’s use of the word “any” in its reference to “rights
. . . to payment for medical care.” §1396k(a)(1)(A); see
ante, at 6. The Court presumes that “ ‘[t]he word “any”
has an expansive meaning.’ ”
Ibid. But whether the word
“any” indicates an intent to sweep broadly “necessarily depends on
the statutory context.”
National Assn. of Mfrs. v.
Department of Defense, 583 U. S. ___, ___ (2018) (slip
op., at 11). Here, as explained, statutory context establishes that
the word “does not bear the heavy weight the [Court] puts upon it.”
Ibid. To the extent the Court suggests the word “any”
supersedes all other contrary contextual indications, it ignores
precedent. See,
e.g., United States v.
Alvarez-Sanchez,
511 U.S.
350, 356–358 (1994) (relying on context to interpret
“ ‘any law-enforcement officer or law-enforcement
agency’ ” as limited to those making arrests under federal
law).
The Court also repeatedly relies on the fact
that the acquisition provision and third-party liability provision
use specific language to limit the pool from which a State may
recover to funds that compensate for expenses Medicaid has paid,
whereas the assignment provision uses different language. See
ante, at 7, 9, 11. The Court invokes the presumption that
“ ‘[w]here Congress includes particular language in one
section of a statute but omits it in another section of the same
Act, it is generally presumed that Congress acts intentionally and
purposely in the disparate inclusion or exclusion.’ ”
Russello v.
United States,
464 U.S.
16, 23 (1983). This is unpersuasive. Putting aside the many
contextual clues that support Gallardo’s reading of the assignment
provision, see
supra, at 6–7, the presumption the Court
cites is “ ‘strongest’ in those instances in which the
relevant statutory provisions were ‘considered simultaneously when
the language raising the implication was inserted.’ ”
Gómez-Pérez v.
Potter,
553 U.S.
474, 486 (2008). It has less force where, as here, different
Congresses enacted the provisions at issue over the course of
multiple decades. The presumption is especially unhelpful in this
case because it cuts both ways: Since 1965, the anti-lien provision
has specified that a State may not impose a lien against a
beneficiary’s property “on account of medical assistance paid
or
to be paid on his behalf.” §1396p(a)(1) (emphasis added).
Accepting the Court’s logic, Congress should have required an
assignment that unambiguously reached payments for both furnished
and unfurnished care using this existing “paid or to be paid”
language, but it failed to do so in the assignment provision. See
ante, at 11.
Meanwhile, the Court fails to give due regard to
the clear textual limitations imposed by the Act as a whole. For
instance, as to the assignment provision’s mirror image in the
insurer acceptance provision, see
supra, at 7, the Court
reasons that the latter’s “narrower focus on health insurers, who
typically pay only once medical services are rendered, explains its
application to a narrower category of third-party payments,”
ante, at 10, n. 3. This is beside the point. In the
assignment provision, Congress required beneficiaries to assign
certain rights to the State; in the insurer acceptance provision,
it required insurers to accept that assignment. It makes no sense
that Congress would require insurers to accept only a sliver of the
mandatory assignment, regardless of how insurers typically pay.
Ultimately, “[s]tatutory construction
. . . is a holistic endeavor.”
United Sav. Assn. of
Tex. v.
Timbers of Inwood Forest Associates, Ltd.,
484 U.S.
365, 371 (1988). Yet rather than reading the assignment
provision in a manner “compatible with the rest of the law,”
ibid., the Court disconnects it from much of the Act. The
Court does not hold that the third-party liability provision
extends as far as its reading of the assignment provision. See
ante, at 10–11; see also
supra, at 5–6. The Court
also agrees that the acquisition provision is “more limited,”
meaning that the scope of that provision, too, “differ[s]” from
that of the assignment provision.
Ante, at 9. To justify
these anomalies, the Court asserts that Congress, in enacting the
acquisition provision, saw fit to “provid[e] a more targeted
statutory right for when the assignment might fail.”
Ibid.
The Court offers little explanation, however, for why Congress
might have narrowed such a necessary backstop in this way. The
statutory hodgepodge the Court perceives contrasts sharply with the
reasonable scheme Congress actually crafted.
B
The Court’s reasoning also contradicts
precedent. The Court distinguishes
Ahlborn because that case
did not squarely hold that the relevant provisions “must” be
interpreted in “lockstep,” and it reduces
Ahlborn’s concern
about fairness to a disfavored “policy argumen[t]” that must yield
to text.
Ante, at 9, 11. But
Ahlborn’s analysis
reflected the Court’s view of the text and context of the Act as a
cohesive whole. It is not only “our sense of fairness,”
ante, at 11, but Congress’ sense of fairness, as codified in
the Act’s anti-lien and anti-recovery provisions and recognized in
Ahlborn, that demonstrates the Court’s error.
The Court itself appears to recognize that its
textual analysis leads to unfair and absurd results, leading it to
suggest an unpersuasive workaround. The Court responds to the
lifetime-assignment quandary, see
supra, at 9–10, by
reasoning that the assignment provision’s use of the phrase
“ ‘any rights . . .
of the individual’ ”
is “most naturally read” to impose a temporal limitation to rights
possessed while on Medicaid,
ante, at 11–12. Neither party
even suggests this reading of the statute.[
4] That is because it is anything but natural,
especially under the interpretive approach the Court uses today. An
“individual” continues to be an “individual” for the duration of
his or her life, whether on or off Medicaid. Were there any
ambiguity, the word “ ‘any,’ ” we are told, “ ‘has
an expansive meaning’ ” that would counsel against the Court’s
implicit limitation.
Ante, at 6. Perhaps sensing that its
claim to natural meaning lacks force, the Court, at last,
acknowledges “background legal principles” that militate against
allowing a lifetime assignment.
Ante, at 12. While
background principles indisputably are relevant, the Court errs by
discarding the more relevant background rule of insurance law that
Congress embraced in the Act, see
supra, at 9, which could
have avoided the Court’s dilemma altogether.[
5]
Over the long term, the Court’s alteration of
the balance Congress struck between preserving Medicaid’s status as
payer of last resort and protecting Medicaid beneficiaries’
property might frustrate both aims. As a State’s right of recovery
from any damages payout expands, a Medicaid beneficiary’s share
shrinks, reducing the beneficiary’s incentive to pursue a tort
action in the first place. See Brief for American Justice
Association et al. as
Amici Curiae 16–20. Under the
provisions of the Act at issue here, States may sue tortfeasors
directly, but as Florida itself explains, it is “more
cost-effective” for beneficiaries to sue. Tr. of Oral Arg. 65. By
diminishing beneficiaries’ interests in doing so, the Court’s
expansion of States’ assignment rights could perversely cause
States to recover fewer overall expenses, all while unsettling
expectations in the States that have relied on a contrary reading
of federal law.[
6]
In the end, the Court’s atomizing interpretation
has little to commend it, particularly when contrasted with the
consistent, administrable scheme Congress crafted. The Court’s
reading also undercuts Congress’ choice to allow Medicaid
beneficiaries to place their excess recovery funds in Special Needs
Trusts, protecting their ability to pay for important expenses
Medicaid will not cover. See n. 1,
supra. Congress may
wish to intercede to address any disruption that ensues from
today’s decision, but under a proper reading of the Act, such
intervention would have been unnecessary.
* * *
“[T]he meaning of a statute is to be looked
for, not in any single section, but in all the parts together and
in their relation to the end in view.”
Panama Refining Co.
v.
Ryan,
293 U.S.
388, 439 (1935) (Cardozo, J., dissenting). Because the Court
disserves this cardinal rule today, I respectfully dissent.
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