Can an indigent Medicaid crime victim get money from Maryland's Criminal Injuries Compensation fund to cover unpaid hospital bills they never actually owe?

Plain-English summary

The Executive Secretary of Maryland's Criminal Injuries Compensation Board asked the Attorney General whether an indigent crime victim, whose medical care was paid in part by Medicaid, could receive a compensation award covering the unpaid balance of the hospital bill Medicaid did not cover. The Board had received several such claims, including one from a claimant paralyzed in an altercation who ran up a $255,000 hospital bill of which Medicaid, under cost-containment regulations then in effect, covered only a limited number of days. None of these claimants had personal assets a hospital could realistically collect against, so the unpaid balances existed only on paper. The opinion concluded that these claimants were not eligible for an award, because the Criminal Injuries Compensation Act only paid claimants who could show "serious financial hardship" caused by the criminal injury itself, in the form of lost earnings, lost support, or actual out-of-pocket expenses, and these claimants, already on public assistance before they were hurt, had paid nothing out of pocket and faced no realistic risk of ever having to pay the unpaid balance themselves. The opinion reasoned that the Act existed to help crime victims cope with the injury's real financial impact on them personally, not to backstop hospitals for Medicaid shortfalls, and that using the Board's limited annual budget to pay hospitals directly for essentially uncollectible bills would come at the expense of other genuinely eligible victims.

Currency note

This opinion was issued in 1983. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Why didn't an indigent crime victim's unpaid hospital bill count as "financial hardship" under Maryland's crime victim compensation law?
Because the opinion found the claimants faced no realistic prospect of ever having to pay that balance. They had no personal assets a hospital could collect against through a lawsuit, so while the bill existed on paper, it did not translate into any actual or reasonably foreseeable loss to the claimant personally, which the opinion found was what the statute's "serious financial hardship" requirement was meant to capture.

Did it matter that the claimants were already receiving public assistance before they were hurt?
Yes. The opinion noted that the Act's stated purpose was to help crime victims who, as a result of the crime, become dependent on public assistance or otherwise suffer financial hardship because of the injury. These claimants were already receiving public assistance before the crime occurred, so their financial hardship predated and was not caused by the criminal injury.

Would paying these hospital bills have hurt other crime victims?
The opinion suggested so. It noted the Board's budget for awards was limited (about $1.8 million a year at the time), that awards could not be made unless funds were appropriated and available for the full amount, and that using scarce funds to pay hospitals for essentially uncollectible Medicaid shortfalls would come at the expense of genuinely eligible victims who had suffered real financial hardship from their injuries.

Could a claimant in this situation ever qualify later?
Yes, the opinion left that door open. It cautioned that "serious financial hardship" had to be assessed on the specific facts of each case, and that if a claimant's circumstances changed, for example, if the claimant later obtained assets that a hospital then moved to collect against, the Board should be prepared to reconsider a prior denial.

Background and statutory framework

The Criminal Injuries Compensation Act, Article 26A of the Maryland Code, established a fund "to provide a measure of financial assistance in specified circumstances to innocent victims of crime" (citing Gossard v. Criminal Injuries Comp. Bd.), administered by a Board with authority "to hear and determine all claims for awards" (Article 26A, §4(d)) for victims and certain other eligible persons (§5). Article 26A, §12(f)(1) required the Board to deny an award if it found the claimant would not suffer "serious financial hardship" as a result of lost earnings or support and out-of-pocket expenses from the injury, considering all of the claimant's financial resources, a standard the Court of Appeals had read to require denial "if, and only if" the Board found the claimant would suffer no such hardship from either source (citing Holmes v. Criminal Injuries Comp. Bd.). The opinion also noted the Act's statement of legislative purpose (§1), describing the state's "moral responsibility" to aid crime victims who "suffer disability, incur financial hardships or become dependent upon public assistance" as a result of criminal acts, and Article 26A, §12(a)(2), which barred any award unless funds were appropriated and available for its full amount.

Applying that framework, the opinion found the indigent Medicaid claimants had already been receiving public assistance before their injuries, had received all necessary medical care at no personal cost (Medicaid's payment limits stemmed from unrelated 1981 cost-containment regulations, citing COMAR 10.09.06.04(A)(1)), and had no assets that could realistically be attached by a hospital seeking to collect an unpaid balance, so any award would function as a direct payment to the hospital rather than relief to the victim. The opinion supported this reading with out-of-state case law addressing similar "serious financial hardship" language: in New York State Dep't of Audit and Control v. Crime Victims Comp. Bd., a court annulled awards to police officers who, despite losing overtime and shift-differential pay, had received their full base salary and benefits during recovery; and in Hoffman v. Pennsylvania Crime Victim's Comp. Bd., a court denied an award to a widow who had suffered a real economic loss from her husband's death but had also received life insurance proceeds exceeding that loss, reasoning that the compensation program was meant only to "make up the difference" between what a victim actually lost and what the victim was otherwise compensated for. The opinion cautioned that its conclusion turned on the specific facts before it and was not a categorical rule against Medicaid recipients, and separately suggested the General Assembly might consider capping individual awards, as other states had done, to prevent a single large claim from exhausting the year's appropriation to the detriment of other eligible victims.

Citations

Statutes:

• Md. Code Art. 26A, §1 (statement of legislative purpose)
• Md. Code Art. 26A, §4(d) (Board's authority to hear and determine claims)
• Md. Code Art. 26A, §5 (eligible claimants)
• Md. Code Art. 26A, §12(a)(2) (no award absent appropriated funds)
• Md. Code Art. 26A, §12(f)(1) ("serious financial hardship" eligibility requirement)
• COMAR 10.09.06.04(A)(1) (1981 Medicaid inpatient hospital coverage limit)
• COMAR 12.01.01.06(B) (claimant's burden to prove financial hardship)

Cases:

• Gossard v. Criminal Injuries Comp. Bd., 279 Md. 309, 310 (1977)
• Holmes v. Criminal Injuries Comp. Bd., 278 Md. 60, 65 (1976)
• New York State Dep't of Audit and Control v. Crime Victims Comp. Bd., 431 N.Y.S.2d 602 (App. Div. 1980)
• Hoffman v. Pennsylvania Crime Victim's Comp. Bd., 405 A.2d 1110 (Pa. Commw. 1979)

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1983/Volume68_1983.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

CRIMINAL INJURIES COMPENSATION

Eligibility Criteria, Financial Hardship, Economic Loss, Medicaid Recipients.

June 1, 1983

Mr. Martin I. Moylan
Executive Secretary
Criminal Injuries Compensation Board

You have requested our opinion on whether an indigent victim of crime, whose medical expenses were paid in part by the Maryland Medical Assistance Program, is eligible under the Criminal Injuries Compensation Act for an award equal to the unpaid balance of his or her medical expenses.

For the reasons given below, we have concluded that a claimant is not eligible for such an award if, as here: (i) the claimant suffered no past economic loss as a result of the criminal injury; and (ii) there is no reasonably foreseeable prospect that future assets of the claimant will be attached by a health care provider in execution of a judgment for unpaid bills.

I
Background

On occasion, the Criminal Injuries Compensation Board receives claims for awards from indigents who have been billed for medical expenses not covered by the Maryland Medical Assistance Program ("Medicaid"). For example, in one instance, the claimant was injured during an altercation in an alcoholic treatment center and suffered paralysis from the neck down. He was hospitalized for several months. At the time of the incident, the claimant was unemployed and was receiving public assistance. He was certified as eligible for Medicaid, which paid the cost of the indigent's care at the University of Maryland Hospital up to the maximum permitted by current Medicaid regulations.1 The claimant has submitted for payment by

1 Medicaid formerly covered in-patient hospital services for the entire number of days certified by the appropriate professional standards review

the Criminal Injuries Compensation Board a medical bill from the University of Maryland Hospital in the total amount of $255,000.

You indicate that you have received comparable bills from other indigent claimants. You further indicate that payment of these hospital bills would exhaust the budget for awards under the Act.

In each case, the claimant has received all necessary medical treatment. None of the claimants has personal assets that could be attached by the hospital in execution of judgment on the unpaid bills. Thus, these claimants have suffered no actual economic loss, nor is there any foreseeable prospect that they will suffer such a loss in the future.

II
Applicable Statutory Provisions

The Criminal Injuries Compensation Act, Article 26A of the Maryland Code, establishes a system "to provide a measure of financial assistance in specified circumstances to innocent victims of crime". Gossard v. Criminal Injuries Comp. Bd., 279 Md. 309, 310 (1977). The Criminal Injuries Compensation Board has authority "[t]o hear and determine all claims for awards". Article 26A, §4(d). The victims of a crime and certain other specified persons are generally eligible for such assistance. Article 26A, §5.

However, the Act establishes several prerequisites to compensation awards. The requirement relating to the financial need of a crime victim appears in Article 26A, §12(f)(1):

"If the Board . . . finds that the claimant will not suffer serious financial hardship, as a result of the loss of earnings or support and the out-of-pocket ex-

organization. However, pursuant to regulations that became effective on January 1, 1981, the coverage for inpatient hospital services in a general hospital was limited to full or partial payment for a total of twenty days per spell of illness. See COMAR 10.09.06.04(A)(1). The purpose of these emergency regulations was cost containment and reduction of Medicaid's anticipated deficit. 8:3 Maryland Register 240 (February 6, 1981).

penses incurred as a result of the injury, if not granted financial assistance pursuant to this article to meet the loss of earnings, support, or out-of-pocket expenses, the Board . . . shall deny an award. In determining the serious financial hardship, the Board . . . shall consider all of the financial resources of the claimant."2

As the Court of Appeals has explained, this provision requires a denial of an award "if, and only if, the Board determines that the claimant will not suffer financial hardship as a result of the loss of earnings or support and that he will not suffer such hardship as a result of out-of-pocket expenditures". Holmes v. Criminal Injuries Comp. Bd., 278 Md. 60, 65 (1976) (emphasis in original). See also Note, Criminal Victim Compensation, 30 Md. L. Rev. 266, 281-82 (1970). Thus, to meet this aspect of the Act's eligibility requirements, a claimant must show that the criminal injury itself caused a loss of earnings or out-of-pocket expenditures.

In the cases in question, the indigents undoubtedly suffer financial hardship. But this hardship is not the result of the criminal injury. Cf. Article 26A, §1 (quoted in Part III below), which refers to the Act's intent to aid individuals who, as a result of criminal acts, "thereby . . . become dependent upon public assistance". Here, the claimants already were receiving public assistance before they were injured. They received necessary medical treatment, for which they themselves paid nothing. They have no personal assets that might become subject to a lien by the hospital for costs not reimbursed by Medicaid, and there is no reasonably foreseeable prospect that future assets will be at risk. If the Board were to make an award in these cases, the money would go directly to the hospital in payment of the medical services.

Under these circumstances, we believe that the claimants do not meet the requirement of §12(f)(1): they have not suffered "serious financial hardship, as a result of the loss of earnings or support and the out-of-pocket expenses incurred as a result of the injury".

2 The claimant has the burden of proof to establish the requisite financial hardship. COMAR 12.01.01.06(B).

III
Statutory Purpose

Under the Act, the Board may not make an award "unless funds are appropriated and available for the full amount of the award". Article 26A, §12(a)(2). The present operating budget for the Board is approximately $2 million, of which $1.8 million is distributed in awards. The number of claimants receiving awards has varied between 300 to 400 a year.

To the extent possible, the Act should be administered in accordance with its beneficent intent:

"The legislature recognizes that many innocent persons suffer personal physical injury or death as a result of criminal acts or in their efforts to prevent crime or apprehend persons committing or attempting to commit crimes. Such persons or their dependents may thereby suffer disability, incur financial hardships or become dependent upon public assistance. The legislature finds and determines that there is a need for government financial assistance for such victims of crime. Accordingly, it is the legislature's intent that aid, care and support be provided by the State, as a matter of moral responsibility, for such victims of crime." Article 26A, §1.

Thus, the purpose of the Act, and the State's "moral responsibility", would be best carried out if all eligible crime victims were compensated.

Under the current scheme, however, that might not be possible. A crime victim who suffers financial hardship as a result of a criminal injury might well be denied compensation because prior awards to comparably harmed victims have used up all available appropriations.3 This result, although unfortunate, would not be inconsistent with the statutory purpose.

3 In light of a volume of claims and a level of inflation that the General Assembly could not have anticipated, the prohibition in §12(a)(2) could well result in a denial of awards to eligible claimants who were unlucky enough to have been victimized late in a fiscal year.

We note that legislatures in other states have established maximum limits for victim compensation awards. Given current economic realities, a comparable amendment to the Act may be advisable. We would be glad to work with you in this regard should the Board wish to pursue this course of action.

However, the statutory purpose would be very poorly served if an eligible victim were denied victim compensation solely because available funds had been used to pay the otherwise uncollectible accounts of medical facilities. This statute is intended to ameliorate the impact of crime on victims, not the impact of Medicaid cutbacks on hospitals.

IV
Case Law

Neither Maryland nor any other jurisdiction has published a reported opinion on the precise issue presented by these claimants. However, the issue of what constitutes "serious financial hardship" was addressed in New York State Dep't of Audit and Control v. Crime Victims Comp. Bd., 431 N.Y.S.2d 602 (App. Div. 1980). In that case, four police officers were injured in the line of duty. Although all four received their base salary, they were deprived of night shift differential or overtime pay due to their inability to work following their injuries. The board made awards to each of the four officers to compensate them for these losses of income beyond base pay. On review, however, the court found that, because each officer received his full base salary, medical care, and other benefits during his period of recuperation, there was no showing of the required serious financial hardship. It therefore annulled the awards.

In Hoffman v. Pennsylvania Crime Victim's Comp. Bd., 405 A.2d 1110 (Pa. Commw. 1979), the widow of a crime victim petitioned for review of an order of the board that had denied her victim compensation. Although the widow had suffered a total economic loss of over $66,000 as a result of her husband's death, she had also received over $85,000 from his life insurance policy. In affirming the denial of the award, the Pennsylvania court found that the widow had not suffered a serious financial hardship within the meaning of the statute:

"Our reading of the Act indicates to us that the crime victim's compensation program was intended by the Legislature to compensate innocent victims of crime for economic losses sustained by them for which they received no other compensation. Within

limitations set forth in the Act, the program makes up the difference between what the victim lost economically and what a victim received economically as a result of a crime." 405 A.2d at 1111.

These cases, though certainly not directly on point, do suggest an essential purpose of the "serious financial hardship" prerequisite: to limit awards to those who suffer personal, significant financial loss. Just as the claimants in the New York and Pennsylvania cases did not meet that test, neither do the indigent claimants at issue here.

V
Conclusion

In summary, it is our opinion that a victim of crime is not eligible for an award under the Criminal Injuries Compensation Act if, as here: (i) the claimant suffered no past economic loss as a result of the criminal injury; and (ii) there is no reasonably foreseeable prospect that future assets of the claimant will be attached by a health care provider in execution of a judgment for unpaid bills.

We caution that a conclusion about the existence of "serious financial hardship" can only be reached after careful consideration of the particular facts of each case. Moreover, if subsequent events result in a significant economic loss, if, for example, a claimant unexpectedly obtains assets that are then attached by the health care provider, the Board should be prepared to reconsider a denial.

Stephen H. Sachs, Attorney General
Valerie V. Cloutier, Assistant Attorney General
Avery Aisenstark, Chief Counsel, Opinions and Advice