Office of Recovery Services v. John R. Latham

When a State incurs medical expenses because a third-party tortfeasor injures a Medicaid recipient, federal law requires the State to seek reimbursement for those expenses. Like most modern civil litigation, most claims for reimbursement settle—and those settlements often include payments for damages other than medical expenses, such as for pain and suffering. When that happens, the State is entitled to reimbursement from only the portion of the “settlement that represents medical expenses.” Ark. Dep’t of Health & Human Servs. v. Ahlborn, 547 U.S. 268, 280 (2006). The question presented is whether a State may seek reimbursement for its medical expenses from the portion of a settlement that represents all medical expenses—past and future—or only from the portion allocable to past medical expenses.