Medicare Case, 9/29/10: Bradley v. Sebelius

Just came out at the end of last  week,  11th Circuit. Excerpts include:

The facts of this claim against a Florida nursing home for neglect and abuse are simple and not in dispute. However, the question of law as to the interplay between the Florida Wrongful Death Act (FWDA) and the federal Medicare Secondary Payer statute (MSP) is an issue of first impression in this court.

The deceased has been placed in a FL nursing home, and during the deceased's approximate three (3) month hospital stay, the Secretary of the Department of Health and Human Services (Secretary or HHS), on behalf of Medicare, paid $38,875.08 for Burke's medical care.

The Administrator  settled the wrongful death tort claims for $52,500, the full amount of the nursing home's liability insurance policy limits.Settlement was made without filing suit. The nursing home tendered the settlement amount and the party executed a release of all claims of the estate and the surviving children against the nursing home and its liability insurance carrier.

The total, undifferentiated amount of the settlement was $52,500.00. The issue of first impression in this case is therefore: “Whose property is the settlement?” The settlement involved the medical expenses and costs recovered by the estate (and subject to the MSP statute), along with the non-medical, tort property claims of the surviving children for lost parental companionship, etc., under state law, (and not subject to the MSP statute).

Under Florida law, any claim of the estate is separate and distinct from the claim of a survivor. All loss of consortium or companionship recoveries are the property of the person who incurred the loss. Not the Secretary of HHS. A child's loss of parental companionship claim is a property right belonging to the child, not the Secretary of HHS. The children's loss of parental companionship claims do not include the decedent's medical expenses, as a claim for medical expenses belongs only to the estate. Only the estate's allocated share of the proceeds is subject to the province of the Secretary.

The Court wrote, "There is a particularly troubling sub-issue contained in this appeal.... "
 

"The Secretary declined to take any part in the litigation although at all times her position was adverse to the interests of the surviving children. The probate court made the allocation, finding that the Secretary should recover the sum of $787.50. Yet, still, the Secretary, citing no statutory authority, no regulatory authority, and no case law authority, merely relied upon the language contained in one of its many field manuals and declined to respect the decision of the probate court."

The Court went on to write: "The Secretary's position would have a chilling effect on settlement. The Secretary's position compels plaintiffs to force their tort claims to trial, burdening the court system. It is a financial disincentive to accept otherwise reasonable settlement offers. It would allow tortfeasors to escape responsibility."

Only on Westlaw as of this writing.