Arkansas Department of Human Services V. Ahlborn - The Court's Decision

The Court's Decision

The U.S. Supreme Court unanimously affirmed the Eighth Circuit's ruling in a decision delivered by Justice John Paul Stevens. The Court held that federal Medicaid law did not authorize ADHS to assert a lien on Ahlborn's settlement in excess of the stipulated amount for past medical expenses, and that the federal anti-lien provision furthermore affirmatively prohibited it from doing so. The state has no claim against those portions of a settlement the parties agreed were attributable to pain and suffering or lost wages, the high court ruled. The Arkansas statutes were therefore unenforceable to the extent they provided for a contrary result.

The opinion is also significant because the Court, without discussion, permitted a Medicaid suit to proceed where the cause of action was conferred by the Supremacy Clause. Most federal suits alleging violation of the Medicaid Act – which does not expressly confer a right of action – claim that the right of action is authorized by 42 U.S.C. § 1983. In recent years, the Supreme Court has made it more difficult to sue under § 1983 for statutory violations, requiring that the statutory provision in question unmistakably focus on individual rights. While some Medicaid suits have been permitted under § 1983, certain Medicaid provisions have been held unenforceable.

However, this case shows an alternative route to federal court for public interest litigants. Where a state statute or regulation conflicts with or is preempted by federal law, the right of action arguably is conferred by the Supremacy Clause of the U.S. Constitution. Ahlborn implicitly supports this premise.