Are Lawyers Who Reimburse Medicare Out Of Tort Settlements Committing Malpractice? by Benjamin W. Glass, III
Ben Glass practices law in Fairfax, VA. He represents plaintiffs in medical malpractice, personal injury and insurance coverage cases. He has lectured and written on ERISA and Medicare Reimbursement issues. He is a member of the Board of Governors of the Virginia Trial Lawyers Association and is a frequent CLE lecturer for that organization. He is on the Board of Directors and faculty of the Virginia College of Trial Advocacy.
Introduction
Traditional wisdom and practice has been that if your tort client has had medi- cal bills paid by Medicare, and you collect money on that case either by way of settle- ment or verdict, you and your client owe reimbursement to Medicare for those medical expenses that Medicare paid. Some have called this a “super lien.” On December 17, 2002, in Thompson
v. Goetzmann, 2002 U.S. App. LEXIS 25969, the Fifth Circuit Court of Appeals dealt the United States a very serious blow in its efforts to recover Medicare payments from tort plaintiffs who have been suc- cessful in their tort cases.
The notion that Medicare has a claim
for reimbursement in most tort cases has been successfully challenged in recent years, yet most attorneys are unaware of the arguments that can be made. Goetzmann is the first federal appellate court to weigh in on the so-called prompt payment argument. We do not yet have the final answer. Attorneys need to un- derstand the recent case law developments and clients need to be advised that, for the time being, there is a serious question raised as to whether Medicare is entitled to reimbursement in most tort cases. At- torneys who fail to at least educate themselves by examining the arguments
being made are doing their clients a dis- service. Attorneys who fail to at least advise their clients of the arguments be- fore simply disbursing to Medicare may be guilty of legal malpractice. This argument that Medicare does not
The Government’s position that plaintiffs failed to exhaust their adminis- trative remedies before filing the declaratory judgment actions has recently been rejected by the Honorable T. S. Ellis in the Eastern District of Virginia.2 Because of the ongoing controversy, at- torneys contemplating challenging a claim by Medicare for reimbursement are strongly urged to read the current cases and keep apprised of current develop- ments in this area of the law. Attorneys should also carefully review the applicable Untied States Code provisions. Attorneys should also be aware that the Government is making the argument that plaintiffs who file declaratory judgment actions before exhausting administrative remedies must have their cases dismissed.
have reimbursement rights is not without controversy. The United States has vigor- ously argued in favor of the traditional view that Medicare is owed reimburse- ment. The Government, however, has lost several significant cases even before Goetzmann. In fact, to the author’s knowl- edge, the Government has lost every case in which the prompt payer argument has been made in response to Medicare’s claim for reimbursement. The issue is currently on appeal in several federal circuits. There are declaratory judgment actions pending in several Federal District courts in Vir- ginia.1
1
Brown v. Thompson, E.D. Va., CA 02-891- A; Baughan v. Thompson, W.D. Va, CA 02- 00111; and Carter v. Thompson, W.D. Va CA – 02-01031. The author is co-counsel for the plaintiffs in Baughan and Carter.
2
That opinion, as well as many briefs and papers on this subject are available at the author’s website at
http://www.vamedmal.com/ mainpages/
docs.cfm.
8 Trial Reporter Spring 2003
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