In the spring of 2013 the Supreme Court made a decision that affects how liens can be collected on North Carolina medical malpractice settlements.
North Carolina state law has provided that state officials may place liens on medical malpractice settlements for one-third of the award. The liens are placed to reimburse healthcare providers for their expenses caring for the malpractice victim. Now, the Supreme Court has ruled that the one-third amount is "unreasonable" in a North Carolina medical malpractice case.
The case that brought the court's decision focused on a 2000 birth injury victim who received a settlement for $2.8M in 2006. However, there was no breakdown given of the award and no way to determine how much of the award was for medical costs. The court ruled "the North Carolina statute is pre-empted by federal Medicaid law that bars liens on portions of a settlement that don’t cover medical costs." (If this case had been filed after North Carolina's medical malpractice reform in 2011, the maximum award for non-economic damages would have been $500,000.)
The girl, now 13, suffered inadequate care at birth that has resulted in the loss of her vision, hearing, and mental competence. She is disabled for life as a result of the medical malpractice. The court ruled that states can receive reimbursement for their Medicaid costs, but the fee will not be based on a one-third policy. The state must adjust their amount of their lien on the claim.