Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011

Medicare Set-Aside Blog on March 19, 2012 | Posted by



It is always amusing to watch the federal government contradict itself and this week, some legislation caught my eye. The House of Representatives is scheduled to debate the HEALTH Act (H.R. 5) this week. The Act intends to improve patient access to health care services and provide improved medical care by reducing the excessive burden the liability system places on the health care delivery system. What I found interesting about the Act is that it will contradict much of what we try to achieve in the way of protecting Medicare’s interests in an insurance settlement, judgment or award because it proposes to cap non-economic damages. Thankfully every kid who eats lead paint chips will still be entitled to claim the economic losses of a dually degreed nuclear and aerospace engineer, however they had better not require too much medical treatment because the combined recovery for past and future non-economic damages will still only be $250,000. Particularly important to the concept of MSAs is the fact that the Act specifically provides that the future damages will be reduced first, meaning that if no funds remain after past liens are reconciled, guess that’s just too bad for Medicare.


The other interesting aspect of the Act is that it introduces a collateral source rule. Looking into the future where Medicare is able to claim secondary payer status and simply not provide related benefits, plaintiffs would not have a collateral source, but what will happen to past medical expenses endured by Medicare if “[n]o provider of collateral source benefits shall recover any amount against the claimant or receive any lien or credit against the claimant’s recovery or be equitably or legally subrogated to the right of the claimant in a health care lawsuit involving injury or wrongful death.” Medicare does not have a right to deny payments until the MSP is triggered and until that happens, the benefits it provides a Medicare beneficiary are merely entitlement benefits under the program. In a liability insurance situation, the MSP rises by operation of law upon the settlement, judgment, award or other payment. Think any of this will make the debate this week?


Pertinent parts of the bill are copied below, but for the full text, click this link


 


SEC. 4. COMPENSATING PATIENT INJURY.


(a) Unlimited Amount of Damages for Actual Economic Losses in Health Care Lawsuits- In any health care lawsuit, nothing in this Act shall limit a claimant’s recovery of the full amount of the available economic damages, notwithstanding the limitation in subsection (b).
(b) Additional Noneconomic Damages- In any health care lawsuit, the amount of noneconomic damages, if available, may be as much as $250,000, regardless of the number of parties against whom the action is brought or the number of separate claims or actions brought with respect to the same injury.
(c) No Discount of Award for Noneconomic Damages- For purposes of applying the limitation in subsection (b), future noneconomic damages shall not be discounted to present value. The jury shall not be informed about the maximum award for noneconomic damages. An award for noneconomic damages in excess of $250,000 shall be reduced either before the entry of judgment, or by amendment of the judgment after entry of judgment, and such reduction shall be made before accounting for any other reduction in damages required by law. If separate awards are rendered for past and future noneconomic damages and the combined awards exceed $250,000, the future noneconomic damages shall be reduced first.
(d) Fair Share Rule- In any health care lawsuit, each party shall be liable for that party’s several share of any damages only and not for the share of any other person. Each party shall be liable only for the amount of damages allocated to such party in direct proportion to such party’s percentage of responsibility. Whenever a judgment of liability is rendered as to any party, a separate judgment shall be rendered against each such party for the amount allocated to such party. For purposes of this section, the trier of fact shall determine the proportion of responsibility of each party for the claimant’s harm.


SEC. 6. ADDITIONAL HEALTH BENEFITS.


In any health care lawsuit involving injury or wrongful death, any party may introduce evidence of collateral source benefits. If a party elects to introduce such evidence, any opposing party may introduce evidence of any amount paid or contributed or reasonably likely to be paid or contributed in the future by or on behalf of the opposing party to secure the right to such collateral source benefits. No provider of collateral source benefits shall recover any amount against the claimant or receive any lien or credit against the claimant’s recovery or be equitably or legally subrogated to the right of the claimant in a health care lawsuit involving injury or wrongful death. This section shall apply to any health care lawsuit that is settled as well as a health care lawsuit that is resolved by a fact finder. This section shall not apply to section 1862(b) (42 U.S.C. 1395y(b)) or section 1902(a)(25) (42 U.S.C. 1396a(a)(25)) of the Social Security Act.