to the court for an order that equitably allocates any court settlement among categories of damages. Medicaid. Each State Medicaid


program has an office for pursing sub- rogation and estate recovery claims. These claims have similarities and dif- ferences. Both of course require that the services actually be provided to the cli- ent/decedent, but the former requires a causal relationship between the tort and the incurred medical expense, while the latter does not. And there is relief from estate recovery obligations if there is a surviving spouse or young or disabled child, or the services were provided prior to age 55, but none of those facts (except to the extent they make out a hardship defense) are relevant to subrogation claims. The practical steps to take in either the


subrogation or estate recovery claim in include requiring the agency to provide a bill as it were – a detailed statement of all charges and all goods and services paid for, to be reviewed for accuracy and make sure all of the charges are in fact for your client and in fact related to the injury upon which suit is based. You should review those claims against the billing and service records of all provid- ers to identify discrepancies, and require strict proof by the claimant that it has paid the claims its computer records report. The context of the Medicaid claim will


provide the procedure for resolution. A subrogation claim in a personal injury suit will be resolved, if all else fails, by the trial court. An estate claim arises by definition in a probate proceeding; the personal represetnative denies the claim and the Medicaid agency files a complaint with the probate or orphan’s court for payment. At that point, the estate can require proofs of payment, and if not settled at that stage, can be resolved by the court. Medicare. The nation-wide Medicare


program is vastly more complicated and formal than the fifty-one Medicaid programs. A Coordination of Benefits (COB) contractor will take a report of a possible claim, send a “Medicare right


Summer 2007


of recovery” letter and an information release form for the beneficiary to sign and return, and will open an MSP file for the beneficiary in the CMS database. The COB contractor will identify all claims paid for the beneficiary, a time consum- ing process, and determine which are related to the injury for which liability may be claimed in a personal injury suit. The COB will provide a list of claims it believes to be related to the suit; as with Medicaid claims, the first task is to re- view the COB report to weed out goods and services not arising from the cause of action. Medicare shares procurement costs


– expert witness fees, cost costs, and attorneys fees – ratably with the entire recovery, but it insists on being paid first, and appears to claim priority over Med- icaid, as well as everyone else. 42 CFR §§ 411.24 through 411.26. If total fees and expenses of a recovery equal 39.4% of the total recovery, then Medicare’s claim is also reduced by that much. But absent a court decision to the contrary, Medicare anticipates getting the first dollar of recovery. If the recovery exceeds the amount recovered, Medicare expects 100% payment after deducting its share of fees. If the recovery is less than the amount recovered, Medicare expects to receive the entire amount less fees and expenses. If dissatisfied with the results, the


plaintiff can sue the primary insurer or refuse to pay and let Medicare sue him or her, appeal, or seek waiver or com- promise. The injured party is entitled to double damages where a primary plan fails to pay or to reimburse Medicare. Or, the client could appeal under 42 U.S.C., § 1395ff and 42 C.F.R. § 404.900, which is appropriate if a claim otherwise settled quickly and the client did not want to/could not use the trial court for a determination of which costs were due to the tort. Alternatively, the client can seek compromise under 31 U.S.C. § 3711; the claim here turns on the cost of collection, the liable party’s inability to pay within a reasonable time, and the ex- tent to which the prospect of successful litigation is uncertain. These are handled


Trial Reporter


only by CMS offices – home or regional – and not by fiscal intermediaries or oth- ers. You can also ask the COB to waive claims where the Medicare beneficiary was “without fault” (but see the follow- ing sentence), where recovery would defeat the purpose of Social Security or Medicare laws, or would be against “equity and good conscience.” 42 U.S.C. § 1395gg©. The “without fault” standard is really a means or needs test based on the beneficiary’s out of pocket expenses, ability to pay Medicare, considering in- come, assets and expenses, and his or her age and physical or mental handicaps. Medicare Secondary Payor Manual, 7-§ 50.6.3. Defeating the purpose of the two laws means causing financial hardship so that a beneficiary cannot meet ordinary and necessary living expenses, e.g., set- tlement or insurance proceeds have been spent and only basic income remains. Id., §§ 50.6.5 and 50.6.5.1. “Equity and good conscience” looks to whether the beneficiary did not, or Medicare did, contribute to the overpayment; whether recovery would cause undue hardship; and whether waiver would unjustly en- rich, or the beneficiary was harmed by relying on incorrect information from Medicare. Id., §§ 50.6.5 and 50.6.5.2 (with examples). Judicial review is available. 42 U.S.C. § 1395gg. Finally, CMS can waive recovery if it is “the best interest of the Medicare program,” id. § 1395y(b)(2)(B)(iv); regional offices can handle claims up to $100,000, above that the CMS central office in Baltimore must decide. CMS says these waivers are not reviewable. 42 C.F.R. § 405.705(d). Assuming no resolution by any of the


preceding steps, Medicare has a number of remedies, including the following, in- cluding a direct right of recovery against third-party payor, even if the payor then has to pay twice, 42 C.F.R. § 411.24(i)(1), indeed double damages are provided for; against anyone who has received pay- ment from the primary plan, including the beneficiary, especially if he or she fails to cooperate with CMS’ collection efforts, id., §§ 411.23 and 411.24(k)(1) and (2), his or her attorney,Thompson v. Goetzmann, 315 F.3d 457 (5th


59


Cir. 2002),


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