SUPREME COURT OF THE UNITED STATES
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No. 20–1263
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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.