There appears to be increased activity on Medicare conditional payment demands surrounding wrongful death actions as demonstrated in recent case law. This is probably due to the fact that when Medicare seeks to recover payments from a decedent’s estate, recovery rights become blurry and can involve interpretations of both state and federal law. For example, in some cases a state’s wrongful death laws will impact whether Medicare will be able to recover. The consensus among courts appears to be that if medicals are resolved as part of the wrongful death action, then Medicare has a right to recover conditional payments. If medicals are not claimed as part of the wrongful death action, but rather are just an action on the part of the decedent’s heirs, Medicare does not have a right to recover conditional payments.
In Wasson v. Sebelius, 2011 U.S. Dist. LEXIS 77771, July 18, 2011, U.S. District Court, Eastern District of Missouri, Northern Division, the court encountered complicated issues surrounding recovery of conditional payments in wrongful death actions, but also had the task of determining whether the action belonged in State or Federal court. The Plaintiff, Martin T. Wasson (“Wasson”), who brought the wrongful death action individually and as the personal representative of the estate of Margaret Suzanne Wasson (the decedent) was served with a letter from the MSPRC alleging that Medicare was owed $8,327.01 in conditional payments. Wasson initiated an action against the federal government and maintained that any claim of the estate was separate and distinct from the claims of a survivor and that Medicare was entitled only to the estate’s allocated share of the proceeds of the settlement.
The St. Louis U.S. Attorney’s Office on behalf of the Department of Health and Human Services (“Defendant”) received the Complaint and removed the matter to Federal court. Subsequently, Wasson filed a Motion to Remand the matter back to the State court in Marion County, Missouri, where they originally filed the lawsuit. In deciding the Motion to Remand, the Court had to determine whether the action was a matter of state or federal law. Wasson alleged that the matter pertained to state law due to the fact that apportionment of the proceeds of a settlement would be dictated by Missouri law. The Defendant argued that Federal court was the proper venue pursuant to 28 U.S.C. § § 1441 and 1442 (a).