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AAJ Working Toward 2nd Circuit Allocation of Medicare Lien

The AAJ sent out an update regarding a case where it is attempting to win a major victory for Medicare beneficiaries.  The plaintiffs are using Bradley v. Sebelius to try to convince a probate court to allocate the settlement funds and reduce Medicare’s lien.  The AAJ writes,

In Bradley, the probate court ordered an apportionment of a small settlement for medical negligence at a nursing home between the estate, which was obliged to reimburse Medicare for advanced medical expenses, and the decedant’s surviving children, who had no such obligation. In Guarneri, the parties settled a medical malpractice case, but lawyer Turkewitz was dealing with a probate court that would not give his client — the surviving spouse —authority to disburse funds from the settlement. When Turkewitz’s client asked the court to apportion the settlement funds and to allow her to distribute the funds, the probate court refused to move forward without the participation of the Centers for Medicare and Medicaid Services (CMS).
Sadly, this is a case that dragged out far too long with no word from CMS. The client’s husband died in January 2007, the case settled in February 2008, and then things grounded to a halt. The trial court told the probate court to apportion the money, the probate court sent it back to the trial court for apportionment, and the trial court sent it back to the probate court for allocation. All the while, no one has heard from CMS.
A Turning Point, at 10 Percent Interest

At long last, the New York City Department of Social Services agreed to the allocation, and said it will accept a proportional share of the settlement. When CMS finally surfaced, instead of compromising, it stated it would send the final debt to the U.S. Treasury Department for collection of the full amount of the debt, minus procurement costs, and it would charge interest on the full amount of the debt at a rate of 10 percent a year.
CCL Litigation Counsel Valerie M. Nannery has contacted the MSP recovery center to ask it to recall the debt from Treasury because no money has even gone to the Estate – meaning there is no money with which to pay Medicare or Treasury. Nannery has also contacted the MSP coordinator in New York to work with Medicare to compromise the debt owed. Medicare has never replied to Turkewitz, who contacted Medicare repeatedly requesting that it compromise its lien.
In the more than five years since Michael Guarneri died, the settlement money has been held in an escrow account. His surviving wife and children have only received enough money to cover funeral expenses.
Next Steps
CCL hopes that Medicare will compromise its lien amount. But if it continues to refuse to participate in an allocation proceeding in the probate court in New York, and if the probate court continues to refuse to act in Medicare’s absence, CCL may need to go to the state court’s appellate division to ask it to mandate the probate court to act and allocate the proceeds of the settlement that was reached more than four years ago.
Subsequent to any allocation and distribution of funds, if CMS maintains that it is entitled to recover its full lien amount, and refuses to take a reduced recovery, CCL will litigate the issue against CMS in the federal courts. The issue of whether Medicare is entitled to recovery only from the part of a settlement that is allocated to medical expenses would eventually be decided by the U.S. Court of Appeals for the Second Circuit

The obvious take away here is that they are nowhere near an authoritative victory.  But – CMS’s lack of response can only help the plaintiffs when the Second Circuit finally gets this case.  My only concern is that CMS might never appeal if it loses, knowing the trial court (even at a Federal level) will be nothing more than persuasive to future cases.

At Lien Resolution Services we can assist you with Medicare lien resolution, Medicaid lien resolution, ERISA liens, private insurance liens, and more.

 

Ryan J. Weiner
Lien Resolution Services
www.lienresolutionusa.com
https://lienblog.wordpress.com
rweiner@lienresolutionusa.com
 
This Blog/Web Site is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

 

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About Ryan J. Weiner

Co-Founder of Lien Resolution Services, LLC, a national healthcare lien resolution firm. Our goal is to assist in the fair administration and resolution of healthcare liens on personal injury cases. Please visit our website for more information: www.lienresolutionusa.com.

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