Brer_Rabbit_at_the_table_1881

Bringing Medicare To The Settlement Table Is Not So Easy

December 18, 2007

                      
  
          [Image: Br\’er Rabbit at the table from Uncle Remus, His songs and His Sayings: The Folk-Lore of the Old Plantation, by Joel Chandler Harris, p. 90.  Illustrations by Frederick S. Church and James H. Moser.  New York: Appleton and Company, 1881.]

          Recently I the trend among third party healthcare payers to pursue subrogation claims against the proceeds of tort settlements obtained by their covered beneficiaries.  A case involving Walmart\’s recovery from the family of an injured former employee underscored the importance of bringing all necessary parties to the settlement table, even those who are not immediately apparent.   This week\’s AHLA Health Lawyers Weekly contained a summary of a case making it clear that Medicare, too, will pursue its subrogation claims in such cases, even when the parties have tried their best to settle around Medicare\’s claim. 
          In Mathis v. Leavitt, No. 07-0062-CV-W-RED (W.D. Mo. Nov. 26, 2007), the family of a deceased Medicare beneficiary settled a wrongful death claim against the tortfeasor which they characterized as being “in excess of the $77,403.67 that Medicare had paid on behalf of [the decedent]” following his injury but prior to his death.  The family then asked Medicare to acknowledge that it had no lien against the settlement proceeds, and Medicare refused.  On cross-motions for summary judgment, the District Court ruled in favor of Medicare.  The Court found that since a claim under the Missouri Wrongful Death  Statute includes damages for medical expenses paid on behalf of the decedent prior to death, the proceeds of settlement included “payment by a responsible party” from which Medicare must be reimbursed.
          Although it is not clear, it appears that the Court in Mathis is saying that the parties cannot leave Medicare reimbursed medical expenses out of a settlement agreement under the Missouri Wrongful Death Statute and thereby defeat Medicare\’s later subrogation claim.   Since the  same result  could likely be argued under most states\’ wrongful death statutes, the outcome in Mathis is significant.  Whether other courts will follow, and whether the same result will occur in non-death cases under common law remains to be seen.  Plaintiffs seeking to settle all tort cases involving significant prior Medicare reimbursement of expenses will do well to bring Medicare to the table, or proceed at their own risk.