Louisiana Federal Court Finds No MSA Necessary in Product Liability Case Where Treating Physicians Say No Future Medical Needs Related to Claim

Stethoscope and GavelOn January 10, 2015, the United States District Court for the Western District of Louisiana, Alexandria Division, published its opinion on Berry v. Toyota Motor Sales, concluding that no MSA is required in this product liability matter based on the most recent information from CMS, and Mr. Berry’s treating medical providers opinions indicating no future medical care needed as a result of the accident. The Court finds Medicare’s interests have been adequately protected in this settlement based on the fact that Medicare provides no other procedure by which to determine the adequacy of protecting Medicare’s interests for future medical needs and/or expenses in conjunction with the settlement of third party claims, and a strong public interest in resolving lawsuits through settlement.

The case stems from a product liability lawsuit against Toyota Motor Sales (TMS) arising out of a July 16, 2010, single vehicle accident in which plaintiff Rocky D. Berry (Berry) allegedly sustained injury when he drove his 1997 Toyota Corolla off the roadway on US Highway 84 in Natchitoches Parish. Toyota denied liability and contested damages. The case was set for trial for August 11, 2014; however plaintiff and TMS engaged in negotiations and on or around July 30, 2014 reached a confidential agreement to settle plaintiff’s claims against TMS, pending adjudication by the Court that no MSA is required and that the interests of Medicare have been adequately protected.

Mr. Berry was receiving Social Security disability benefits prior the date of the subject accident and continues to do so, and part of the consideration for the settlement agreement is that Mr. Berry will be responsible for protecting Medicare’s interest, if any, under the Medicare Secondary Payer statute, 42 U.S.C. 1395y. Medicare made some payments for medical treatment received by Mr. Berry as a result of the accident. Medicare paid a total of $781.26 in conditional payments on Mr. Berry’s behalf, and required Mr. Berry to repay $447.02.2 That amount was paid, and on October 22, 2014 the Centers for Medicare and Medicaid (CMS) acknowledged payment and declared its file on the matter to be closed. Medicare has therefore been reimbursed for all payments that it made for Mr. Berry’s treatment in relation to the subject accident.

Mr. Berry’s current treating physician — Stephen Katz, M.D. — evaluated Mr. Berry’s current and future medical needs and set out his opinion in an affidavit dated November 25, 2014. It is Dr. Katz’s opinion that Mr. Berry has completed his course of treatment for injuries relating to the subject accident. Dr. Katz does not reasonably anticipate that Mr. Berry will require further treatment for his back injuries relating to the subject accident in the future.

Mr. Berry’s treating dentist — David Carlton, III, D.D.S. — evaluated Mr. Berry’s current and future dental needs and set out his opinion in an affidavit dated November 25, 2014. According to Dr. Carlton, Mr. Berry has completed his course of treatment for injuries relating to the subject accident and is no longer being treated by him. Dr. Carlton does not reasonably anticipate that Mr. Berry will require further treatment for his jaw injuries in the future.

Based on the evidence presented, including the evidence from Mr. Berry’s treating medical providers and correspondence from CMS, the Court believes that there is no need for a MSA as part of the settlement of this case. The Court finds that Medicare has been reimbursed for all conditional payments that it has made for Mr. Berry’s accident related treatment and, as it is not reasonably anticipated that Mr. Berry will receive any further accident related treatment in the future, Medicare will not be called upon to pay for any accident related treatment in the future.

The finding that there is no requirement for a MSA for future accident related treatment which may be covered by Medicare, and which is related to what was claimed and released in this lawsuit, reasonably and fairly takes Medicare’s interests into account in that it is based on reasonably foreseeable medical needs, the most recent information from CMS, and Mr. Berry’s treating medical providers. Since Medicare provides no other procedure by which to determine the adequacy of protecting Medicare’s interests for future medical needs and/or expenses in conjunction with the settlement of third party claims, and since there is a strong public interest in resolving lawsuits through settlement, the Court finds that Medicare’s interests have been adequately protected in this settlement within meaning of the Medicare Secondary Payer Statute.

Consistent with Helios’ protocol in all liability set asides and future costs projections, this case illustrates how litigants can properly take Medicare’s interests into account in liability claims. Communicating with CMS, resolving conditional payments, and obtaining treating physicians’ written medical opinions regarding no future medical needs related to the claim are the essential components. Whether an auto case, medical malpractice matter, or product liability cause of action, speak with us on how to adequately protect Medicare’s interests in such liability claims.

Leave a Reply