Malpractice? (Continued from page 17)
would seem to be folly for the Gov- ernment to argue that when it made the Medicare payments in question, there was a reasonable expectation that the debtor would pay for such medical care.
IN RE: DIET DRUGS PRODUCT LIABILITY LITIGATION, 2001 U.S. Dist. LEXIS 2959 (E.D. Pa.) Claim: Government sought reim- bursement under Medical Care Recovery Act (MCRA), Federal Employees Health Benefit Act (FEHBA) and Medicare Sec- ondary Payer Act. “The court concludes, that under re- cent case law, it is highly unlikely that the Government can recover for benefits pro- vided to class members pursuant to Medicare or FEHBA.” IN RE: ORTHOPEDIC BONE SCREW PRODUCTS LIABILITY LITI- GATION. 202 F.R.D. 154; 2001 LEXIS U.S. Dist. LEXIS 11014 (E.D. Pa.) Once there was class certification in the bone screw litigation the Health Care Finance Administration sent letters to 1,800 Medicare beneficiaries in the settle- ment class. HCFA demanded repayment
for amounts that Medicare allegedly fur- nished in relation to injuries that were the subject of the tort claims. The letters de- manded repayment within 60 days of the date of the letter and threatened interest at 13.75 percent if not paid. It also threat- ened to take the money out of claimants’ social security or railroad retirement ben- efits. The underlying plaintiffs sued the Government essentially for declaratory judgment that the Government had no claim.
The Government argued that the situ- ations in which the MSP makes Medicare a secondary payer entitled to reimburse- ment are not limited to payments for items or services for which another party has made prompt payment or can reason- ably be expected to pay promptly. The court rejected that argument saying that the MSP makes a Government payment conditional, and is subject to reimburse- ment only where the insurance entity has made prompt payment or can reasonably be expected to make prompt payment for costs related to the federal beneficiary’s medical treatment.
If a liability insurance policy has not made prompt payment and cannot rea- sonably be expected to be paid promptly for the health-care issue, it is not a “pri- mary plan.”
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mtla@mdtriallawyers.com 18 Trial Reporter Spring 2003
The regulation states a payment is
made “promptly” when made within 120 days after the earlier of the day care was provided or the date a claim was filed with the insurer. Given the time delay inher- ent in strongly prosecuted and defended tort litigation, the Government cannot legitimately assert that a settlement arrived at in the heat of a hard fought adversarial engagement for a tort liability from the defective product is the type of insurance “plan” that the Government can reason- ably expect to make prompt payment for medical care. The Government argued that the
Court of Appeals “turns the statute on its head by limiting the Government’s right to reimbursement to situations in which payment is expected to be made promptly.” The court said that the “stat- ute by its terms limits the Government’s right to reimbursement to situations in which prompt payment has been made or can reasonably be expected by a ‘pri- mary plan.’ Any other interpretation flies in the face of the MSP’s explicit terms.” The court said this interpretation is en-
tirely consistent with the court’s conclusion that the Government’s MSP cause of action arises when the “primary plan” is obligated to pay for the primary care at issue under a contract or other for- mal plan of insurance, not when the payment obligation arises out of tort liti- gation. The court also pointed out that the Government’s interpretation of the statute leads to the absurd conclusion that all entities possessing or borrowing suffi- cient funds to cover tort liabilities would be liable for double damages if they en- tered a settlement or received an adverse judgment more than 120 days after the suit was filed or claim was otherwise for- mally prosecuted. The court said that this situation obviously presents itself in the overwhelming majority of court lawsuits. The Government failed to address this flaw in its interpretation.
Conclusion As noted, this area is not without con-
troversy. The Goetzmann case will probably not be the last word. Until the issue is finally decided counsel are urged to fully advise their clients of the current state of the law. Paying the money to Medicare, under the current state of the law and without the client’s full under- standing of the state of the law, could be grounds for a claim against the attorney.
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