1395y(b)(2)(B)(iii) and (iv).
5. Requires individual beneficiaries to cooperate with Medicare recovery efforts, 42 C.F.R. § 411.23, but re- lieves them of liability unless they received payments to reimburse them for the cost of services provid- ed. Id., § 1395y(b)(1)(F). Whether an attorney for the beneficiary has the same duty to cooperate is prob- lematical. U.S. v. Sonowski, 822
F.Supp. 570 (W.D.Wis. 1993)(judg- ment against plaintiff and his attorney).
As a matter of administrative conve-
nience, Medicare disregards settlements and judgments under $250,000 and does not require notice for determining its subrogation claim at all. On the other hand, and beyond what Medicaid does, in all worker’s compensation cases it does, and in large settlements it could, require notice so that it can determine what it believes to be the future cost of medical care associated with the injury that would otherwise be paid by Medi- care. It then requires that funds be set aside, in a Medicare Set-Aside Arrange- ment, to pay the costs, as they arise, that Medicare would have paid for. There are commercial services available to serve as Medicare set-aside trustees. After the set- aside funds are exhausted, the individual can again use Medicare for all services covered by it. The MSP statute also gives indi-
viduals – including insureds – a private right of action with double damages against a plan that “fails to provide for primary payment (or appropriate reimbursement)” for services covered by both the insurance plan and Medi- care. 42 U.S.C. § 1395y(b)(3)(A). A double damages claim was successful in Manning v. Utilities Mutual Ins. Co., 2004 U.S.Dist.Lexis 1674 (No. 98 Civ. 4790 (RCC), S.D.N.Y.)6
; a workman’s
compensation insurer refused to pay a claim that it litigated extensively while Medicare paid. The parties settled their
6
See also, O’Connor v. Mayor and City Council, (JMF-06-704 – Motion to Dis- miss denied July 19, 2007.
Summer 2007
WC claim after ten years of litigation for $1.9 million, apparently without any arrangement for re-paying Medicare; this was before the 2003 amendments. The disabled worker then filed his claim for double damages and prevailed; the insurer’s claim against the worker for reimbursement under the settlement was denied summary judgment. Other private right of action claims have not been effective.7 ERISA INSURERS. Health care benefits
under ERISA may also be subject to sub- rogation claims, although the precise wording of the underlying statute has prompted the Supreme Court, over vig- orous but unavailing dissents, to fashion the right to recover only where the cause of action could fit into a form of relief that would have been available under equity practice before the merger of law and equity. The closeness of the ques- tion is reflected in the two most recent Supreme Court decisions, Great West Life & Annuity Ins. Co. V. Knudson, 534 U.S. 204 (2002), which declined relief to
7
E.g., in Glover v. Liggett Group. 459 F.3d 1304 (11th
Cir. 2006), the 11th
that the underlying cause of action did not arise until liability had previously been determined, relying on the provision for establishing liability by a judgment or settlement, including one excluding liability.
Circuit held
the insurer/subrogee where the funds it sought were in the hands of a third party special needs trustee, and not that of the plaintiffs, and Sereboff v. Mid At- lantic Medical Services, LLC, 126 S.Ct. 1869 (2006), where the Supreme Court approved the Fourth Circuit’s finding that a claim against the proceeds of a suit still in the hands of plaintiffs could constitute an equitable lien permitted by ERISA. A subsequent D.C. case,Moore v. Cap-
ital Care, Inc., D.C. Cir., No. 04-7121, decided August 29, 2006, addressed the related question of application of the “made whole” doctrine as a default Fed- eral common law rule in the face of an ERISA plan provision that gave the plan “any rights of recovery of a participant,” and required participants to pay “all amounts recovered by suit, settlement, or otherwise from any third party or his insurer to the extent of the benefits provided under this Contract.” Slip op. At 15. The court did not address whether
this was rather more than subrogation. Rather, the claim looks like the one lim- ited by the Court in Ahlborn, a lien on the entire cause of action without regard to whether the recovery was for the cost of medical services or something else or a combination of the two. The reasoning of Ahlborn does not apply, of course,
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