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Price v. Wolford – 10th Circuit Court of Appeals Voids Ahlborn Allocation for Lack of Evidence

Posted date in Ahlborn, Liens

In Price v. Wolford, the 10th Circuit remanded a case regarding an Ahlborn allocation back to the district court after finding no evidence in the record to support an estimate of the injured party’s lifetime cost of care.  The case involved a child that suffered severe brain damage during birth and began receiving Medicaid benefits shortly after birth.  The parents filed suit for Medical malpractice.  An expert retained by the plaintiff estimated, during deposition testimony, the minor’s lifetime care would cost approximately $12 million.  The case was settled for $1.1 million. 

After settlement, a motion to approve the settlement was filed which allocated $37,666 to Medicaid in full satisfaction of its lien based upon the ratio of the $1.1 million settlement to the $12 million total damage value of the case.  Medicaid objected to the reduction and claimed that the parents had not proven the $12 million dollar value of the claim.  The District court found that the parents proved by clear and convincing evidence that the allocation was appropriate.  Medicaid appealed. 

The Circuit Court of Appeals reversed the district court's holding. The Price court explained that it "need not struggle to determine whether the evidence supporting the reduction in OHCA's recovery was clear and convincing, because at the hearing to determine whether the district court would approve the settlement, there was no evidence whatsoever relating to the reduction." The court disagreed that the plaintiffs’ expert's deposition testimony prior to the settlement regarding the value of the claim was enough to satisfy their burden of proof, holding that "we cannot accept Plaintiffs' suggestion that OHCA was bound by everything in the preintervention district-court record when its sole interest was the new issue of the proper allocation of the settlement proceeds."