Background
Amanda and Bud Masters’ daughter, F.M., was born prematurely in 2010, resulting in permanent moderate mental retardation and physical impairments. The Ohio Department of Medicaid (“ODM”) paid $338,421.70 in medical bills related to the premature birth. The Masters subsequently sued the obstetricians who cared for F.M. in Clark County and eventually settled for $1.5 million.
A dispute arose over ODM’s right to recover its Medicaid expenditures from the settlement proceeds through subrogation under R.C. 5160.37. The Masters filed a declaratory judgment action in Clark County Probate Court challenging the validity, enforceability, and constitutionality of ODM’s subrogation rights. That action was dismissed for lack of jurisdiction, and the Second District affirmed. The Masters then filed a new complaint in Franklin County Common Pleas Court, raising similar challenges and adding constitutional claims. The trial court dismissed the Franklin County case, and the Masters appealed to the Tenth District.
The Court’s Holding
The Tenth District affirmed the dismissal. Relying on the Ohio Supreme Court’s decision in Pivonka v. Corcoran and the Second District’s prior ruling in the Masters’ own earlier appeal, the court held that R.C. 5160.37 provides an exclusive administrative process for resolving disputes over Medicaid subrogation. The common pleas court lacked subject matter jurisdiction because the Masters were required to exhaust the administrative remedy provided by R.C. 5160.37 before seeking judicial review.
The court rejected the Masters’ argument that their constitutional challenges — including claims that the statute violated due process and equal protection — created an independent basis for common pleas jurisdiction. The court held that constitutional challenges to the subrogation statute must be raised within the administrative process and pursued through the statutory appeal framework.
Key Takeaways
- R.C. 5160.37 provides the exclusive administrative remedy for disputes over Ohio Medicaid subrogation rights; common pleas courts lack subject matter jurisdiction over such challenges.
- Constitutional challenges to the Medicaid subrogation statute do not create an independent basis for bypassing the administrative process.
- Res judicata principles may apply when a party re-files essentially the same claims in a different county after an adverse jurisdictional ruling.
Why It Matters
This opinion is essential reading for Ohio personal injury practitioners who settle cases involving Medicaid liens. It confirms that challenges to ODM’s subrogation claims must go through the administrative process established by R.C. 5160.37 — not through a separate declaratory judgment action in common pleas court. Plaintiffs’ counsel who wish to contest the amount or validity of a Medicaid lien must engage the administrative framework first, even when raising constitutional arguments. Attempting to sidestep this process by filing in a different county will likely fail.