Tag Archives: Louisiana

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.

Louisiana Appellate Court Agrees Claimant Committed Fraud, Forfeits All Future Benefits, Including Medicare Set Aside Annual Structured Funds

Stethoscope and GavelOn December 23, 2014, the Louisiana Court of Appeal, 1st Circuit, published its opinion on Shropshire v. Anco Installation, finding that because claimant deliberately misrepresented the facts of his settlement negotiations for the purpose of obtaining additional benefits, all workers’ compensation benefits, including future settlement monies and Medicare set aside funds, are forfeited.

Mr. Shropshire was employed by ANCO. He alleged he suffered permanent injuries in an accident on October 23, 1998, while in the course and scope of his employment with ANCO. ANCO disputed whether an accident occurred and whether Mr. Shropshire was unable to perform the duties of his occupation.

In June 2010, Shropshire, ANCO and its workers’ compensation insurer entered into a compromise agreement, “Joint Petition for Authority to Compromise Workmen’s Compensation Claim.” The Order of Approval was signed by the workers’ compensation judge (“WCJ”) on June 25, 2010. The documents included language that recited Mr. Shropshire was to receive $5,381.00 per month for twenty-six years “to settle the future medical aspect part of the claim.” Other documents however reflected that the payment was to be $5,381.00 per year, not monthly.

Neither ANCO nor its insurer ever paid Mr. Shropshire $5,381.00. In July 2012, Mr. Shropshire filed a Form 1008 Disputed Claim for Compensation with the OWC seeking a monthly payment, to which he alleged he was entitled. ANCO and its insurer answered, asserting that the payment of $5,381.00 per month was a typographical error and that the Order should be amended to reflect payments due of $5,381.00 per year.

The matter came for hearing before the OWC in February 2014. The WCJ found the payments per month to be a typographical error and amended the Order of Approval to substitute the word “annually” in place of the word “monthly” everywhere the word “monthly” appeared in the settlement agreement and Order of Approval dated June 25, 2010. The WCJ also held that Mr. Shropshire willfully made false statements and representations for the purpose of obtaining additional benefits, in violation of La. R.S. 23:1208. Accordingly, the WCJ voided the annuity set up to pay the settlement and relieved third parties and their assignees from further obligation to pay Mr. Shropshire.

The WCJ addressed two issues at the trial on the merits: (1) the amendment of the Order of Approval judgment due to a typographical error; and (2) fraud pursuant to La. R.S. 23:1208.

First, the WCJ had to decide whether the settlement agreement and Order of Approval contained a typographical error; that is, whether the structured payments for Mr. Shropshire’s medical benefits were to be made monthly or annually. After hearing from the witnesses and considering the documentary evidence in the record, the WCJ held that “considering all the evidence, especially the Medicare Set Aside information, and the testimony of the witnesses, it was clear to the Court there was an error in the settlement documents and the payments were agreed to be paid annually, not monthly.”

The WCJ, pursuant to La.C.C.P. art. 1951, which provides that a modification of a judgment can be made at any time to alter the phraseology of the judgment, but not the substance, or to correct an error of calculation, amended the June 25, 2010 settlement agreement and Order of Approval to substitute the word “annually” in place of the word “monthly” everywhere the word “monthly” appeared in those documents. This court concludes it is unable to say the WCJ erred in determining the settlement agreement and Order of Approval contained typographical errors, as the WCJ’s ruling is reasonable and supported by the record.

Next, the WCJ had to decide whether Mr. Shropshire committed fraud pursuant to La. R.S. 23:1208. Section 1208 forbids any person from willfully making false statements or representations to obtain workers’ compensation benefits. La. R.S. 23:1208(A). Upon a determination of fraud by a WCJ, a person in violation of Section 1208 forfeits any right to workers’ compensation benefits. La. R.S. 23:1208(£). To this extent, the WCJ found “Mr. Shropshire’s testimony totally unbelievable, failing to contain any element of truth in this regard. The Court was clearly convinced Mr. Shropshire fabricated the story about an additional settlement negotiated between him and Mr. Maher for the purpose of obtaining benefits clearly unsupported by any other documentation. Mr. Shropshire attempted to convince the Court his deposition testimony was falsely transcribed as well.”

As a result, the WCJ found he deliberately misrepresented the facts of his settlement negations for the purpose of obtaining additional benefits, as it was very clear from the medical records, all records surrounding the settlement negotiations, including a notation in Mr. Shropshire’s own handwriting, as well as Mr. Maher’s testimony, he would never have remotely been entitled to $5,000 a month in medical expenses. Due to Mr. Shropshire’s deliberate misrepresentation of the settlement negotiations, the WCJ concluded all workers’ compensation benefits were forfeited from the date of the deposition, August 13, 2013 forward.

Based on the record, the Court here is unable to say the WCJ erred in determining that Mr. Shropshire committed fraud pursuant to La. R.S. 23:1208, as the WCJ’s ruling is reasonable and supported by the record. As a result, based on the foregoing, the February 24, 2014 final judgment of the Office of Workers’ Compensation is affirmed.

As this case clearly shows, Medicare Set-Aside work is not done simply because the parties have settled the case and funds have been disbursed. At Helios, given our superior medical, pharmacy, claims, and legal expertise, MSA post-settlement work not only includes professional administration of MSA account funds, or assisting the Medicare beneficiary with self administration, but also includes post-settlement legal issues, billing disputes, fee schedule discrepancies, annual accounting to CMS, temporary and permanent exhaustion of MSA funds, and assistance with any remaining funds in the MSA account after claimant’s death.

Louisiana Appellate Court Dismisses Claim Brought Almost 3 Years After Approved Settlement Based on CMS Demanding Higher MSA

LawOn November 5, 2014, the Louisiana Court of Appeal, 3rd Circuit, published its opinion on Hunter v. Rapides Parish School Board, denying Ms. Hunter’s claim to have the employer fund the higher-than-proposed MSA approved by CMS. The Court concluded:

  • Ms. Hunter admitted she knew that the School Board was going to send the Medicare Set Aside to CMS for approval; and
  • Acknowledged there was nothing in the settlement paperwork obligating the School Board to fund a more expensive MSA if CMS did not approve the MSA that she and the School Board had agreed upon; and
  • Ms. Hunter failed to point to any error in the judgment dismissing her claim.

Eliza Hunter injured her low back on March 20, 2001, when she missed a step and fell at the school where she worked. She later filed a workers’ compensation claim against her employer, the Rapides Parish School Board (RPSB), and Claims Administrative Services (CAS), RPSB’s third-party administrator. Over the next several years, RPSB paid Ms. Hunter indemnity benefits totaling $63,786.80 and medical benefits totaling $80,792.54.

More than 9 years later, in October of 2010, Ms. Hunter and the RPSB agreed to settle the matter in return for the RPSB paying Ms. Hunter a lump sum of $19,000.00 and establishing a Medicare Set-Aside Account (MSA) valued at $79,937.77. The parties then presented the Workers Compensation Judge (WCJ) with a Joint Petition and Compromise Settlement Agreement. The WCJ signed an order approving the agreement on October 12, 2010.

Although the opinion does not indicate whether Ms. Hunter was a Medicare beneficiary at the time of settlement, as per the Centers for Medicare and Medicaid Services’ (CMS) recommendations, the RPSB submitted the proposed MSA to CMS for approval. CMS rejected the proposed MSA, instead requiring that the MSA be valued at $94,265.00. Although the opinion does not spell out the exact terms of the agreement, the RPSB opted to keep medical care open and continue to pay Ms. Hunter’s medical expenses as they accrued rather than fund the $94,265.00 MSA.

Without any mention of what had transpired in the interim period of time, almost three years after the WCJ had approved the settlement agreement, on November 6, 2013, Ms. Hunter filed a Disputed Claim for Compensation against the RPSB and CAS seeking to force them to establish the $94,265.00 MSA approved by CMS. The RPSB and CAS responded by filing an exception of no cause of action and/or no right of action. After a hearing, the WCJ granted the exception and dismissed Ms. Hunter’s claim by judgment dated February 3, 2014. She timely filed an appeal.

Pro se, on June 23, 2014, Ms. Hunter filed a pleading with the appellate court entitled “BRIEF REQUESTING AN ORDER TO ENFORCE JUDGMENT.” Therein, she sought to have the court enforce the order signed by the WCJ on October 12, 2010, approving the Joint Petition and Compromise Settlement Agreement entered into by Ms. Hunter, the RPSB, and CAS. In her brief, Ms. Hunter did not assign any error in either the October 12, 2010 order or the February 3, 2014 judgment. Instead, she alleged that CAS “ceased paying her medical expenses” in 2009. She also alleged that CAS denied her request to authorize one of its approved pharmacies to approve a prescription written by her primary care physician in March of 2014.

Although the opinion does not indicate whether the School Board (or its TPA) or Medicare had denied any medical care related to the industrial low back injury, in essence, on appeal, Ms. Hunter seeks to have the court review and enforce the October 12, 2010 order. However, the appeal rights on that order have long expired. Consequently, although Ms. Hunter failed to include any assignments of error in her brief, because Ms. Hunter timely appealed the February 3, 2014 judgment granting RPSB’s and CAS’s exception of no cause of action and/or no right of action pro se, the court decided to “consider the merits of her appeal despite the improper form of her appellant brief.”

Appellate courts are courts of record that neither can receive new evidence nor review evidence that is not in the record. Evidence attached to memoranda and that is not properly and officially offered and introduced does not constitute evidence and cannot be considered, even if it is physically in the record. Accordingly, the court is precluded from considering the exhibits attached to Ms. Hunter’s appellant brief to the extent that the information contained therein was not otherwise a part of the appellate record.

In Williamson v. Liberty Mutual Insurance Co., 12-148 (La. App. 3rd Cir. 6/6/12), 92 So.3d 1218, the court affirmed, as amended, a judgment rendered by a WCJ in favor of a workers’ compensation claimant awarding him penalties and attorney fees after his employer failed to provide him with the money to purchase a MSA within thirty days of the approval of the parties’ settlement by the Office of Workers’ Compensation (OWC). The court noted that “there was no requirement to obtain CMS’s approval of the settlement agreement. Quite the opposite, the settlement agreement stated that the “employee understands that the receipt of this workers’ compensation settlement without CMS pre-approval may result in a loss of Medicare benefits for the work-related injury.”

According to the transcript of the January, 27, 2014 hearing on RPSB’s and CAS’s exception, Ms. Hunter admitted that she knew that the RPSB was going to send the settlement agreement to CMS for approval. She further acknowledged that there was nothing in the settlement paperwork obligating the RPSB to fund a more expensive MSA if CMS did not approve the settlement that she and the RPSB had signed. The court therefore concludes that the jurisprudence supports the February 3, 2014 judgment. As a result, the judgment rendered in favor of the Rapides Parish School Board, granting its exception of no cause of action and/or no right of action and dismissing Eliza Hunter’s claims is affirmed.

This is yet another example of how unclear settlement language can create havoc, even many years after the claim has been settled and approved. It is also another example of how CMS’ optional submission approval process fails to protect litigants. Helios can assist with specifically tailored settlement language and viable compliance alternatives to submitting your MSA to CMS for approval.