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A Federal Court Limits Medicare’s Reimbursement Rights

Alabama Wrongful Death Attorneys (Blackwell Law Firm)I’ve written some prior articles discussing Medicare’s rights to be reimbursed for medical payments from settlements or judgments in personal injury claims. It’s a topic lawyers should take seriously. As I stated in the past, dealing with Medicare can be an extremely frustrating experience. So, I am happy to report a recent court decision that, to some degree, requires Medicare to play by rules that apply to the rest of us.

On September 29, the United States Court of Appeals for the 11th Circuit issued a decision in Bradley v. Sebelius. The case involved reimbursement claims by Medicare arising out of a wrongful death settlement in Florida. This case is a welcome decision for attorneys frustrated by the experience of dealing with Medicare. On his blog, Tennessee attorney John Day wrote a great analysis of this decision. I agree with John that the case involved some great lawyering by plaintiffs’ counsel.

In the case, the Federal Court rejected Medicare’s far-reaching argument that its own field manual was basically entitled to the force of law. In rejecting those claims, the Federal Court actually stated:

The Secretary’s ipse dixit contained in the field manual does not control the law.

If you want to understand the Latin phrase ipse dixit, here is one definition as to its meaning:

The term ipse dixit is the Latin equivalent of the Greek autos epha, referring to Pythagoras, as in, The master (Pythagoras) said it so it must be true and no proof is needed.

The master said it so it must be true! That pretty much sums up Medicare’s prior attitude in dealing with beneficiaries. Here, Medicare created its own manual and then attempted to enforce it against beneficiaries as if it were a validly enacted statute. It’s clearly not!

Additionally, according to this case, Medicare must account for underlying state law concerning substantive recovery rights. What does that mean for injured people? What does that mean for personal injury and wrongful death cases? Under Florida’s wrongful death law, the claim of an estate is separate and distinct from the claims of the survivors. Both the estate and survivors of a deceased can sue the party responsible for causing the death in Florida. However, under Florida law, only the estate can claim medical expenses as part of its damages. Thus, only the estate’s share of any settlement is subject to Medicare reimbursement claims.

Let’s apply that to Alabama wrongful death law. Under Alabama law, all wrongful death damages are punitive. You do not recover compensatory damages for a wrongful death in Alabama. Since you cannot recover compensatory damages for your medical bills, Medicare should have no reimbursement claim in Alabama wrongful death cases. In our past cases, we have successfully used this argument to defeat Medicare claims for reimbursement of wrongful death settlements.

This decision is a welcome limitation upon Medicare’s actions. Now, if Congress would only pass legislation requiring Medicare to respond in a timely manner to efforts by private parties to reimburse medical payments!