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By Dave Kolpack, Associated Press Writer, Published December 23 2009

Judge OKs class-action settlement in Medicaid case

FARGO, N.D. (AP) - A federal judge has paved the way for a class-action settlement with the North Dakota Department of Human Services that would allow Medicaid recipients to receive partial reimbursement from the state for personal injury claims.

About 150 people are expected to receive offers to join the case, which began when Bismarck attorney Tom Dickson negotiated a claim for a woman who was injured in a car accident. The state was demanding too much money from Medicaid recipients who had been compensated by insurance companies or other people, Dickson said.

``I filed it as a class action because I knew if they were doing it to my client, they were doing it to everybody,' Dickson said.

The complaint by Jeannette Delacerda and the class members said North Dakota should not have been seeking full reimbursement of its Medicaid costs because federal law prohibits the state from collecting certain damages that aren't considered medical expenses.

``As a result of some practices, the department has received and is receiving substantial sums of monies to which it is not entitled and it has been unjustly enriched at the expense of the plaintiff and class members,' the complaint said.

In court documents, the state disputed the allegations and said the settlement agreement should not be construed as ``an admission of wrongdoing, fault, or liability' on the part of the Department of Human Services.

U.S. District Judge Daniel Hovland signed an order earlier this month granting preliminary approval to the class-action settlement. A hearing is scheduled for Feb. 12 in Bismarck.

Doug Bahr, an assistant attorney general, said he won't know how much money is involved until each individual settlement is reviewed.

The case stems from a 2006 U.S. Supreme Court ruling involving Arkansas, when the justices said the state went too far in trying to take nearly half of a $550,000 settlement for Heidi Ahlborn, a woman injured in a car accident. North Dakota should have changed its policy to conform to that case, Dickson said.

``I raised it to their attention that this was controlling law in this issue and you need to be following it,' Dickson said of the Department of Human Services. ``They didn't agree.'

He said many people weren't aware of the consequences of the Ahlborn ruling.

``I raised the during a meeting with a bunch of lawyers and they all got glazed looks in their eyes,' Dickson said. ``They didn't know about it either.'