D.C., an infant under the age of fourteen years, by A.G. her mother and natural guardian, and A.G., individually, Petitioners,
The City of New York and the New York City Department of Education, Respondents.
This case is not published in a printed volume and its disposition appears in a table in the reporter.
Petitioners were represented by Dinara Maylov, Esq. of the Law Offices of Dinara Maylov & Associates, LLP.
Respondents the City of New York, New York City Department of Education, and the Department of Social Services of the City of New York were represented by Peter F. Handler, Esq. of counsel to the Corporation Counsel of the City of New York and counsel to the Department of Social Services of the City of New York.
Jack M. Battaglia, J.
On September 13, 2006, the infant Petitioner allegedly sustained personal injury while walking through the schoolyard at Intermediate School 187 in Brooklyn, when she was struck by a student playing football under school supervision. A claim was asserted on behalf of the infant against the City of New York and the New York City Department of Education.
A representative of the New York City Comptroller offered $50,000.00 in settlement, and application was made to this Court for an order approving settlement of the infant's claim at that amount. Since it appeared, however, that the City, through its Human Resources Administration, was asserting a Medicaid lien of $2,118.00 against its own settlement, the Court questioned the reasonableness of the settlement.
Petitioners now move for an order "vacating the lien of the Department of Social Services of the City of New York," and have served both the Corporation Counsel and the Department of Social Services ("DSS".) DSS has appeared by its counsel, and opposes the motion. On the return date, the Corporation Counsel advised the Court that counsel for DSS was appearing for the City for all purposes on the motion. The City has made no objection to the manner in which the issues arising from the assertion of the Medicaid lien have been put before the Court.
Petitioners assert in an affirmation of counsel that the City's settlement offer "was in compensation for the infant-plaintiff's pain and suffering"; that "[d]uring the negotiations, there was no discussion about any medical expenses that the family incurred"; that, "no part of the settlement was attributed to past or future medical treatment"; and that the "discussion centered entirely around pain and suffering." (Attorney Affirmation, 5, 9.) Petitioners also contend that a Medicaid lien is enforceable only against the proceeds of recovery from "responsible third parties," and that it would be a "miscarriage of justice" where enforcement of the lien would result in "merely shifting funds from one public coffer to another." (Reply Affirmation, 2, 3.)
The City does not dispute Petitioners' assertions about the settlement discussions, maintaining that a Medicaid lien cannot be defeated or avoided "simply by announcing that the entire settlement represents pain and suffering"; that "the Court must determine on its own what portion of the settlement is appropriately allocated to past medical expenses"; and that "[i]n this case, given how small the lien is, the Court should order the lien paid in full." (Affirmation in Opposition, second 7.) The City does not directly address the enforceability of a Medicaid lien by one City agency against settlement proceeds intended to compensate for injury caused by another City agency. Although its opposition assumes enforceability, it characterizes the Medicaid lien as a vehicle for recoupment of Medicaid payments from "responsible third parties." (Affirmation in Opposition, 4.)
It is worth noting in the first instance that neither Petitioners nor the City have addressed the enforceability of the $50,000.00 settlement in light of the dispute about the Medicaid lien. In other words, neither party is seeking to avoid the settlement if its view on the lien is not accepted.
The City asserts its lien pursuant to 104-b of the Social Services Law. (Affirmation in Opposition, 3.) The Medicaid lien is a vehicle in service to the assignment, subrogation, and recoupment provisions of federal and state law. ( See Cricchio v Pennisi, 90 N.Y.2d 296, 305-07 ; see also Arkansas Department of Health and Human Services v Ahlborn, 547 U.S. 268 .) Section 104-b was enacted "[t]o enable the public welfare official to enforce its substantive right to pursue repayment from responsible third parties" ( Cricchio v Pennisi, 90 N.Y.2d at 306), and is "an alternative to suing the responsible third party directly" (see Calvanese v Calvanese, 93 N.Y.2d 111, 117 .) "[T]he lien on settlement proceeds attaches to the property of the third party." ( Cricchio v Pennisi, 90 N.Y.2d at 307.)
In light of the purpose and function of the lien, it is, at the least, counter-intuitive that the City may enforce a lien against its own funds, where the lien is to recoup medical expenses related to the injury for which settlement is being made. (But see Witt v Triangle Steel Products Corp.,103 A.D.2d 742 [2d Dept 1984].) The presence of federal and state interests might provide a justification, were it not for the local "public welfare official's powers both to fix the amount of the lien and to release and discharge it" (see Calvanese v Calvanese, 93 ...