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E.D.B. v. Clair

December 29, 2009


Appeal from the Order of the Superior Court at No. 2010 MDA 2006, dated August 15, 2007, reconsideration denied October 25, 2007, reversing and remanding the Order of Centre County Court of Common Pleas, Civil Division, at No. 2003-2042, dated November 6, 2006 933 A.2d 86 (Pa.Super. 2007).

The opinion of the court was delivered by: Mr. Justice McCAFFERY


ARGUED: May 12, 2009


The issue presented in this case is whether the Pennsylvania Department of Public Welfare (hereinafter "DPW") can obtain reimbursement from a tortfeasor for Medicaid expenditures made on behalf of a disabled minor when a claim therefor by the minor's parents is barred by the statute of limitations. We conclude that DPW can obtain such reimbursement, and accordingly reverse the decision of the Superior Court.

E.D.B. (hereinafter "Emily") was born on October 11, 1985, suffering from severe physical and mental disabilities. Nearly eighteen years later, in August 2003, Emily, by and through her parents and guardians, D.B. and J.R.B., Jr. (hereinafter "the Bowmasters"), filed suit against Centre Community Hospital, where Emily was born, and an attending physician, alleging that their negligence was the proximate cause of Emily's disabilities. The complaint specifically alleged, inter alia, that Emily "has been forced to expend sums of money for physicians, hospitals, paramedical personnel, home care attendance, medications and other items necessary for her proper care and treatment and may be forced to expend similar sums for like items in the future" and that her "earning capacity has been gravely and permanently impaired." Complaint at 8-9. The parties reached a negotiated settlement, and the Bowmasters filed a petition for leave to settle an incapacitated person's case. On August 31, 2006, the court of common pleas approved the settlement, which included the establishment of a special needs trust for Emily.*fn1

Because Emily had been receiving medical assistance benefits through the Medicaid program, the Bowmasters provided notice to DPW of their suit in March 2004, as required by statute. See 62 P.S. § 1409(b)(5). DPW responded with a statement of claim asserting a lien on any award or settlement resolving the litigation, in the amount that DPW had expended for Emily's medical care. In the order settling the case, the court of common pleas accepted the Bowmasters' proposal that $56,517.81 (the amount ultimately sought by DPW) of the settlement be set aside, pending a determination of the exact amount necessary to satisfy DPW's lien.*fn2 Following further briefing on the issue of DPW's lien, the court ordered the trustee of Emily's special needs trust to reimburse DPW in the full amount of $56,517.81 for Emily's medical expenses.

The Bowmasters appealed to the Superior Court, which reversed and remanded, holding that DPW could be reimbursed only for those medical expenses paid on Emily's behalf after she reached the age of majority. Bowmaster v. Clair, 933 A.2d 86, 91-92 (Pa.Super. 2007). The Superior Court's reasoning was as follows: Under Pennsylvania common law, a claim for medical expenses incurred by a minor because of personal injury rests with the minor's parents, not with the minor herself. See Hathi v. Krewstown Park Apartments, 561 A.2d 1261, 1262 (Pa.Super. 1989). However, in 2003, when the complaint was filed, the Bowmasters were legally barred from seeking reimbursement for medical expenses incurred during Emily's minority because the statute of limitations for such a suit had expired. Bowmaster, supra at 88-89. Although Emily could pursue a claim for medical expenses in her own right, such a claim, under common law, would necessarily be limited to expenses incurred after she reached the age of majority. Id. Thus, the Superior Court concluded, the instant litigation could not have resulted in an award or settlement that included the medical expenses Emily had incurred while she was a minor, and accordingly DPW could not satisfy its lien for Medicaid benefits paid during Emily's minority from the settlement.

DPW sought allowance of appeal from this Court, which we granted on the following issues, as stated by DPW:

a. Where a minor child's estate may be legally liable to pay medical expenses resulting from an injury, can the child sue the tortfeasor for reimbursement of those medical expenses?

b. Did the Pennsylvania Legislature intend to permit a minor receiving medical assistance to sue a tortfeasor for medical expenses when it enacted 62 P.S. § 1409(b)?

c. Is a minor child a "beneficiary" of medical assistance as defined in 62 P.S. § 1409(b)(13)?

Bowmaster v. Clair, 959 A.2d 900 (Pa. 2008).

Resolution of these tightly intertwined issues is dependent upon interpretation of the Fraud and Abuse Control Act of 1980 as it intersects with the common law and federal law.*fn3

Statutory interpretation is a question of law, for which we must be guided by the Statutory Construction Act, 1 Pa.C.S.§§ 1901-91. See Penn Jersey Advance, Inc. v. Grim, 962 A.2d 632, 635 (Pa. 2009); Borough of Youngwood v. Pennsylvania Prevailing Wage Appeals Board, 947 A.2d 724, 730 (Pa. 2008). We have recently summarized the relevant principles of statutory interpretation as follows:

The object of interpretation and construction of all statutes is to ascertain and effectuate the intent of the General Assembly. See 1 Pa.C.S. § 1921(a). When the words of a statute are clear and free from all ambiguity, their plain language is generally the best indication of legislative intent. A reviewing court should resort to other considerations to determine legislative intent only when the words of the statute are not explicit. 1 Pa.C.S. § 1921(b).

Moreover, it is axiomatic that in determining legislative intent, all sections of a statute must be read together and in conjunction with each other, and construed with reference to the entire statute.

Penn Jersey Advance, supra at 635-36 (internal citations omitted).

If possible, we must avoid a reading that would lead to a conflict between different statutes or between individual parts of a single statute. Housing Authority of the County of Chester v. Pennsylvania State Civil Service Commission, 730 A.2d 935, 946 (Pa. 1999). Finally, we must presume that when enacting any statute, the General Assembly intended to favor the public interest as against any private interest. Vitac Corporation v. Workers' Compensation Appeal Board (Rozanc), 854 A.2d 481, 485 (Pa. 2004) (citing 1 Pa.C.S. § 1922(5)).

The statute at issue in the instant case is the Fraud and Abuse Control Act, which addresses a variety of matters relating to the Medicaid program. Medicaid, which provides joint federal and state funding of medical care for those who cannot afford to pay, requires cooperation between the states and the federal government. See Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268, 275 (2006); Title XIX of the Social Security Act, 42 U.S.C. § 1396 - 1396v. Although each state is allowed broad discretion in the development of its Medicaid program, in order to maintain federal funding a state must satisfy a number of conditions, including an obligation to seek reimbursement from third parties that are liable for a Medicaid recipient's medical expenses. Ahlborn, supra at 275-77 (citing 42 U.S.C. §§ 1396a(a)(25)(A), (a)(25)(B), and (a)(25)(H), and § 1396(k)). This federal mandate led to the enactment of the Fraud and Abuse Control Act. Shaffer-Doan v. Department of Public Welfare, 960 A.2d 500, 506 (Pa.Cmwlth. 2008) (quoting Miller v. Lankenau Hospital, 618 A.2d 1197, 1198 (Pa.Cmwlth. 1992)).

DPW, the state agency that administers Medicaid, is charged with the responsibility of recovering from liable third parties the reasonable value of benefits provided under the program. 62 P.S. § 201; 62 P.S. § 1409(b)(1). A recipient of medical assistance, by the act of accepting such benefits, assigns to DPW "by operation of law [his or her] rights to recover support, specified by a court as support for the payment of medical care, and to payment for medical care from any third party." 62 P.S. § 1404(b). As set forth in the statute, "[w]hen benefits are provided or will be provided to a beneficiary under this section because of an injury for which another person is liable, or for which an insurer is liable. [DPW] shall have the right to recover from such person or insurer the reasonable value of benefits so provided." 62 P.S. § 1409(b)(1) (emphasis added).

The Fraud and Abuse Control Act contemplates that DPW and/or the beneficiary may initiate a suit or claim to recover medical expenses from a liable third person or insurer. At the request of DPW, the attorney general may bring such an action in the name of DPW or of the beneficiary. 62 P.S. § 1409(b)(1). When either DPW or the beneficiary brings an action or claim against a third person or insurer, then DPW or the beneficiary must give notice to the other of the action or claim. 62 P.S. § 1409(b)(5). DPW or the beneficiary may become a party to an action brought by the other at any time before trial on the facts. 62 P.S. § 1409(b)(5)(v). However, as a general practice, DPW has sought reimbursement by asserting a lien on any judgment, award, or settlement. This practice is set forth in subsection 1409(b) of the Fraud and Abuse Control Act, which provides in relevant part as follows:

. in the event of judgment, award, or settlement in a suit or claim against such third party or insurer:

(i) If the action or claim is prosecuted by the beneficiary alone, the court [ ] shall first order paid from any judgment or award the reasonable litigation expenses.. After payment of such expenses and attorney's fees[,] the court [ ] shall, on the application of [DPW], allow as a first lien against the amount of such judgment or award, the amount of the expenditures for the benefit of the beneficiary under the medical assistance program.

62 P.S. § 1409(b)(7)(i) (emphasis added).

Another provision of the Fraud and Abuse Control Act, see 62 P.S. ยง 1409(b)(11), addresses some of the particulars ...

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