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Supreme Court to rule on North Carolina settlement

The U.S. Supreme Court has added a North Carolina medical malpractice case to its argument calendar, meaning it will consider a state law that allows North Carolina to collect a portion of the damages awarded to plaintiffs in malpractice cases. As such, the court's decision could have widespread effects on the way states handle such cases.

A North Carolina couple filed a medical malpractice lawsuit against their doctor, hospital and other defendants when their daughter was born with severe injuries, leaving her blind, deaf, mute, mentally disabled and effectively immobile, requiring her to receive up to 18 hours of nursing care each day. The family claims that negligence by the doctor was directly related to their child's disabilities, arguing that the doctor had a history of drug abuse. The family eventually reached a settlement with the defendants in 2006, winning a lump-sum payment of $2.8 million.

Because the North Carolina Department of Health and Services covered over $1.9 million of the family's medical bills through the state Medicaid program, North Carolina officials ordered a lien on one-third of the settlement award, claiming $933,333.33. The family argued that the state law allowing North Carolina to claim this money conflicts with federal law, which bars states from claiming money outside of medical costs. While a U.S. circuit court agreed with the family, the North Carolina Supreme Court overturned its ruling and upheld the state law, prompting the case to go to the U.S. Supreme Court.

One attorney predicted that the case will have important repercussions on both the family and "the legal community" at large, as several other states collect medical reimbursements in the same way as North Carolina. He argued that the North Carolina law in question is "too much, in some circumstances." He added, "It's a one-size-fits-all policy."

Source: Charlotte Observer, "N.C. malpractice settlement to go before justices," Michael Doyle, Sept. 26, 2012

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