US v Stricker Decision published

Medicare Set-Aside Blog on October 4, 2010 | Posted by

DOJ attorney to Boss: “Remember that $69 million dollars we were going to collect for the Medicare Trust Fund”?

Boss: “Oh yes, that case was a slam dunk. We had a statutory right of recovery.  I was having lunch with Katherine Sebelius just last week and told her we were close to getting a favorable decision. Did the Court Rule”?

DOJ attorney:  “I have some good news and some bad news….”

The bad news for CMS is that they will not be getting a check for $69 million this week from the likes of AIG, Travelers, or the plaintiff attorneys. Several Defendants’ Motion to Dismiss were granted. The Court ruled that regardless of whether the statute of limitations is three or six years (thanks for the clarification), the government’s filing was not timely. The opinion does support the notion that the statute is triggered by the insurance payment, primarily due to CMS’ own interpretation of the MSP as published in its various manuals.

The good news (for CMS) is that this case answered very little in the way of how to address MSP obligations in a liability settlement. Without definitive judicial interpretation, it is business as usual. And the perceived threat of CMS action has proved very effective at collecting conditional payments and preventing future payments post settlement. So win, lose or draw, CMS comes out a winner. Look for CMS to pick a better case to assert their recovery rights in the near future.

And a little bad news for plaintiff attorneys. The Stricker court did provide a little definitive analysis with regard to the three vs. six years options available under the Federal Claims Collection Act as applied to the representative attorneys involved. Because their involvement stemmed from the representatation of the Medicare beneficiaries contractually bound to Medicare, it was decided that the six year SOL for actions founded upon contract applied to them, whereas the corporarate defendants had no contractual ties to Medicare therefore their SOL was dictated by six years provided for actions arising out of tort. Again, there was no need to determine if the use of either was appropriate or not, let alone the FCCA over the MSP SOL, because that point was moot, we do now know that Medicare’s rights against attorneys under the FCCA is greater than the original defendants to the claim. That’s progress, right???

Read the decision here .