Heidi Ahlborn, a resident of Arkansas, suffered severe and permanently disabling injuries in a car accident on January 2, 1996, and filed suit against those she believed responsible.

[2] Ahlborn argued that the settlement was her "property," and that this prohibition accordingly limited the State's recovery to only those portions of the payments made for medical expenses.

The parties stipulated that the State would recover $215,645.30 if it prevailed on the statutory construction issue, representing the total amount the State paid in relation to Ahlborn's care, but only $35,581.47 if Ahlborn prevailed, representing 16.5 percent of the total, which was considered a fair representation of the percentage of the settlement constituting payment by the defendants for past medical care.

The U.S. Supreme Court unanimously affirmed the Eighth Circuit's ruling in a decision delivered by Justice John Paul Stevens.

The state has no claim against those portions of a settlement the parties agreed were attributable to pain and suffering or lost wages, the high court ruled.

[5] The opinion is also significant because the Court, without discussion, permitted a Medicaid suit to proceed where the cause of action was conferred by the Supremacy Clause.

Where a state statute or regulation conflicts with or is preempted by federal law, the right of action arguably is conferred by the Supremacy Clause of the U.S. Constitution.