Medicare Conditional Payment Recovery Takes a Back Seat to Settlement Apportionment in State Court

Haro v. Sebelius- Medicare Conditional Payment CollectionThere 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)[1].

Read moreMedicare Conditional Payment Recovery Takes a Back Seat to Settlement Apportionment in State Court

Pennsylvania District Court – Medicare Advantage Plans Do Not Have Recovery Remedies under the MSP

In the past, it was unclear if Medicare Advantage Plans (MAPs) had recovery rights under MSP. MAPs would issue lien demands claiming that they had recovery rights under the Medicare Secondary Payer Act (MSP) in an effort to obtain reimbursement of payments made by the MAP. Due to the ambiguity surrounding MAPs recovery rights, primary payers would yield to the demands of MAPs to avoid a Federal cause of action by the MAP for recovery before satisfying other lien holders. However, an increasing recent amount of case law is depicting a trend that MAPs do not have direct recovery rights under the MSP in Federal court, and that MAPs must pursue reimbursement of payments in State court just like other traditional lien holders. This holding was brought about again in the case of In Re Avandia Marketing, 2011 U.S. Dist. LEXIS 63544, United States District Court, Eastern District of Pennsylvania.

Read morePennsylvania District Court – Medicare Advantage Plans Do Not Have Recovery Remedies under the MSP

Haro v. Sebelius – Medicare Conditional Payment Collection

Haro v. Sebelius- Medicare Conditional Payment CollectionIn Haro v. Sebelius, putative class Plaintiffs, Medicare beneficiaries and an attorney representing the beneficiaries challenged the CMS program for reimbursement of Medicare conditional payments under the MSP and were rewarded for their efforts with a win against CMS in Arizona District Court. In times when CMS is broadly and according to some commentators, exceeding its authority when attempting to enforce the provisions of the Medicare Secondary Payer Act (MSP), it is refreshing to find an example of CMS being challenged. [1]

Read moreHaro v. Sebelius – Medicare Conditional Payment Collection

Superior Court of New Jersey Allows Plaintiff Attorney’s Fees to be Deducted from MSA Allocation

There has been a great deal of commentary from the liability industry concerning the necessity of liability Medicare Set-Aside (MSA) allocations under the Medicare Secondary Payer Act (MSP), and whether the published guidance applicable for workers’ compensation MSAs  provides any insight regarding how liability MSAs should be handled. Although there is no statutory requirement to create an MSA when future medical expenses are awarded, it is recommended by the Centers for Medicare and Medicaid Services (CMS) and has become a best practice in workers’ compensation cases. In liability cases, resistance to MSAs continues due to a lack of published guidance and issues that are specific to liability cases. For example, if a settlement is only $100,000, and the projected MSA is $150,000, how can plaintiff’s attorneys get their fees if the entire settlement is taken up by an MSA?

Read moreSuperior Court of New Jersey Allows Plaintiff Attorney’s Fees to be Deducted from MSA Allocation