Department of Public Welfare is entitled to reimbursement from tortfeasor for Medicaid benefits paid on behalf of incapacitated minor even if parent's claim is barred by the statute of limitations.

Interpreting the Fraud and Abuse Control Act, the Pennsylvania Supreme Court held the Department of Public Welfare ("DPW") is entitled to recover amounts paid for medical expenses of an incapacitated minor in claims where the parent's or guardian's claim has expired. This decision clarified two directly conflicting decisions by the Superior Court and the Commonwealth Court in medical malpractice matters involving a claim by incapacitated minors whose parents' claims for recovery were barred by the statute of limitations. The Supreme Court reversed the decision of the Superior Court and followed the analysis of the Commonwealth Court in determining that the statutory language of the Fraud and Abuse Control Act made no distinctions between "beneficiaries" and "minor beneficiaries." Previously, the DPW was barred from recovering Medicaid expenditures unless the parent or guardian was the recipient of a settlement or award. This was based on the common law theory that parents or guardians are the Actual recipients of Medicare benefits as they have the duty to provide care for the incapacitated minor. The ability of DPW to place a lien on any settlement will certainly be a consideration in negotiations involving injuries to incapacitated minors.

Case Law Alert - 1st Qtr 2010