John Doe, a Medicaid recipient, and the State appeal the trial court’s decision allowing the State to partially recover the amount of its lien against Doe’s settlement with a third party. The trial court calculated the State’s reimbursement pursuant to Arkansas Department of Health & Human Services v. Ahlborn, 547 U.S. 268 (2006). The State argues that the trial court should have reduced the Court of Claims’ findings of future economic damages to present value before making its lien allocation, complainig that the trial court’s allocation percentage was unfair because the numerator represented actual expenses, but the denominator included future expenses not discounted to present value. Doe’s cross-appeal contends that the trial court erred because it attached the State’s lien to all past medical expenses, including those paid by him and his family, and failed to account for the attorney’s fees. We affirm in part, and reverse and remand in part.
Although Ahlborn held that states are limited to the portion of a settlement that represents medical costs paid by Medicaid, it did not provide concrete guidance on how those allocations should be made. We find no support for the proposition that, as a matter of law, future damages must be reduced to present value in Medicaid lien cases. We do agree with the State that a reduction to present value is generally appropriate for economic damages, but not noneconomic damages. See Levine v. Wyeth, 2006 VT 107, ¶ 42, 183 Vt. 76, 944 A.2d 179. This is, however, not the appropriate case for discounting. Doe presents a damages figure of $42 million to be used in making the allocation, while the State presents a figure of approximately $18 million. The State simply did not prove that the $18 million figure is more fair, nor did it carry its burden in demonstrating that the figure is accurate. In light of those problems, we conclude that discounting is unwarranted, and that the trial court did not err.
The next issue is whether the trial court erred in allowing the State to assert its lien against all medical expenses beyond those which were paid by Medicaid. Vermont’s reimbursement statute—now amended—provided at the time of the suit that “[t]he agency shall have a lien against a third party, to the extent of the amount paid by the agency, on any recovery for that claim, whether by judgment, compromise, or settlement.” By its plain language, the pre-2008 statute does not allow the State to assert a lien against any recovery for money not paid by Medicaid, as the State did here.We express no opinion on the meaning of the statute following the 2008 revisions and additions
Doe also contends that the trial court erred in refusing to allocate to the State a portion of attorney’s fees incurred in procuring the 2006 settlement. We conclude that the State’s lien should have been reduced to account for attorney’s fees. Here, the State was not involved with the litigation in the New York Court of Claims, nor with obtaining the settlement against the NYSTA. Instead, the State asserted a lien against the “fruits of the suit once they materialized,” but did not expend its own resources in pursuing litigation or settlement. Ahlborn, 547 U.S. at 286. The record reflects that it was the State’s practice to reduce its lien claims by a proportionate share of attorney’s fees. The State was required to negotiate in good faith and in accordance with this general practice. The trial court failed to take into account the State’s practice, and therefore abused its discretion in denying Doe’s request to reduce the State’s judgment in the amount of reasonable attorney’s fees.
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