a recovery for medical expenses, Federal law “requires ... that the State [Medicaid program] be paid first out of any dam- ages representing payments for medical care before the recipient can recover any of her own costs for medical care.”Id. at 1762. But its direct causation approach is plainly a significant limit on what Medicaid may claim, even if it won’t resolve every case favorably for injured plaintiffs.
v. Jain, 15 Misc.3d 1120(A), Slip Copy, 2007 WL 1118383 (Table)
N.Y.Sup. (Apr 13, 2007). Helpfully, the Maryland statute
– unlike the Arkansas statute at issue in Ahlborn – is cast in causative terms limited to liability for medical services provided. It provides for subrogation to a beneficiary’s cause of action against another person “to the extent of any payments made by the Department...
Medicare like Medicaid enjoys a subrogation right to recover the cost of care for which it has paid and for which someone else was liable.
The Court noted at the outset that
everyone agreed that a litigated deter- mination of allocation, whether to judge or jury, would be binding, id. at 1762, and dismissed as solvable the potential problem – not presented here because of the parties’ stipulation – of how to determine allocation in the context of settlements. The risk of post-settlement manipulation is easily solved, it said. The State Medicaid program agrees to an al- location or the issue can be submitted to the court. In any event, the Court said, there is as much to be concerned with over-allocation as under-allocation, “unfair to the recipients” in the former situation. This appears to be a back-door ap-
proval of equitable contribution. As in Ahlborn itself, a settlement that reflects a discount on reasonably claimed losses because of all of the many risks of liti- gation should affect how much of the recovery is attributed to medical costs as it is to any other element of dam- ages. That is exactly where the early subsequent cases have gone. See, e.g., Lugo ex rel. Lugo v. Beth Israel Medical Center, 819 N.Y.S.2d 892, 13 Misc.3d 681, 2006 N.Y. Slip Op. 26340 (
N.Y.Sup. Jul 21, 2006). They have held hearings to value the case, and then applied to the total Medicaid expenditures the same percentage reduction as the settlement is to the total value of the case. Chambers
56
that result from the occurrence that gave rise to the cause of action.” Md. Health- Gen., § 15-120(a). Although the words are not identical to the Federal statute, their tenor is the same, and in any event they are constrained by it. Medicare. Medicare like Medicaid
enjoys a subrogation right to recover the cost of care for which it has paid and for which someone else was liable. The stat- ute providing that system has had a long, difficult history, although recent (2003) Congressional amendments may resolve what Medicare has viewed as problems. Unlike Medicaid, however, Medicare also seeks to resolve its responsibility for future care when worker’s compen- sation or large personal injury matters are settled; the mechanism for this is the “Medicare set-aside arrangement” under the Medicare Secondary Payor Act (MSP). These provisions apply where a
plaintiff is a Medicare beneficiary and Medicare pays for services for which someone else – e.g., a workmen’s com- pensation, health or liability insurer or third-party tortfeasor (other than a private individual) – is liable. A plaintiff may be getting Medicare because he or she is 65 years or age or older and qualifies for Social Security retirement benefits, because he or she is disabled, was disability insured at the time the disability started, and has gotten income
Trial Reporter
benefits for more than two years, or because he or she is the disabled adult child of a Social Security participant. Under the MSP, Medicare has a statutory right to reimbursement for the medical expenses it pays on behalf of a beneficia- ry when the beneficiary later receives a personal injury settlement or judgment. 42 U.S.C. §1395y(b)(2). It may bring an action against any entity that is required to pay for the medical services under a primary plan, or against any other entity – a provider, supplier, physician, attorney, State agency or private insurer -- that has received payment from the entity required to pay under the primary plan. 42 U.S.C. §1395y(b)(2)(B)(ii). As amended, Medicare
1. Is secondary payor after primary in- surers – group health plans (except those exempted), workmen’s com- pensation plans, no-fault and other automobile insurance, and liability insurance including self-insured plans. 42 U.S.C. § 1395y(b)(2)(A). Self-insured plans include a busi- ness, trade or professional entity that carries its own risk – that is, a tortfeasor other than a private individual.
2. Can make payments for care when the primary insurer’s payments are not expected to be prompt, but those Medicare payments are con- ditional. Id., § 1395y(b)(2)(B)(I).
3. Is entitled to reimbursement, for any payments it made, by a primary plan that is responsible, evidenced by, for example, a judgment or payment conditioned upon a com- promise, waiver or release, even without an admission of liability. Interest accrues 60-days after no- tice. Id., § 1395y(b)(2)(B)(ii).
4. Requires third party payors (usu- ally insurance companies) to notify Medicare if they learn that Medi- care has made a payment for the injured person’s expenses, and Medicare has a direct right of action against them to recover payments they should have made. Id., §
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