LMSA Approval Floodgates in NJ State Courts Officially Opened

Commentary, Liability, Medicare Set-Aside Blog, Medicare Set-Asides on May 17, 2013 | Posted by Jennifer Jordan, JD, MSCC

Lexis released an opinion this morning from a December New Jersey state court ruling approving a liability Medicare set-aside arrangement. The opinion arises out of a September 2012 mediation in which the parties were able to arrive at a settlement but were unable to consummate the settlement because the settlement “contemplated a determination by the Department of Health and Human Services, Center for Medicare and Medical Services” and CMS refused to review the LMSA. The Plaintiffs had retained themselves a “renowned expert” to determine the set-asides, one being for $13,689.25 and the other $114,246.00, submitted them to CMS for review and after three months of waiting, received “no review” letters from CMS stating resource constraints. Given that it had no reason or basis to question the LMSAs presented, the court found that the proposed set-aside amount in each case “fairly took Medicare’s interests into account in that the figures are both reasonable and reliable” and was therefore “satisfied that Medicare’s interests have been adequately protected pursuant to the MSP.”

Readers of this blog are well aware that I find court blessings of this kind pointless and needlessly costly so I am genuinely entertained by the rationale for seeking the same and then blog about otherwise meaningless decisions so here goes. In this case, the “plaintiffs submit that Medicare’s response with regard to plaintiffs’ claims will in effect delay settlement indefinitely, or until Medicare has the resources to review plaintiffs’ claims.” Given that the review of Medicare set-asides in general is voluntary and that no formal program as CMS maintains for WCMSAs even exists at all for LMSAs, the indefinite delay in settlement was caused by the parties alone. The parties are not in dispute over the amount of the LMSAs proposed nor the need in general to set-aside funds for future medical expenses so that Medicare does not have to pay for the same, therefore the only problem here is the erroneous believe that CMS’ approval was available, required or even desirable. This is a situation that could have been worked out among the parties, particularly since the court added no value to the settlement process. Interesting that their renowned expert couldn’t have talked them off the ledge.

The other point of amusement was the irony of the court’s basis for rendering a decision in this case. The court noted that it is CMS’ refusal to render an opinion (voluntary that it may be) that would force cases to trial when they have otherwise reached an amicable resolution outside of court which would violate New Jersey’s strong public policy of encouraging settlements. “Setting this type of precedent would cause a floodgate of litigation in our courts, resulting in expense and delay of the judicial process, where it would not otherwise be necessary.” Do they not realize that by encouraging people to seek a declaratory judgment when CMS approval is not available opens a floodgate of its own on those same judicial resources since at the moment, that LMSA approval is seldom available and otherwise not necessary other than by demand of a party???

 

BRENDA DUHAMELL, Plaintiff, v. RENAL CARE GROUP EAST, INC., RCG
SOUTHERN NEW JERSEY, LLC, PHILADELPHIA SUBURBAN
DEVELOPMENT CORPORATION, Defendants. CATHERINE A. NEY, Plaintiff,
v. RENAL CARE GROUP EAST, INC., RCG SOUTHERN NEW JERSEY, LLC,
PHILADELPHIA SUBURBAN DEVELOPMENT CORPORATION, Defendants. – –
DOCKET NO. L-871-09 DOCKET NO. L-1138-09
SUPERIOR COURT OF NEW JERSEY, LAW DIVISION, ATLANTIC COUNTY
2012 N.J. Super. LEXIS 201
December 7, 2012, Decided