Wasson et al v. Sebelius

Medicare Set-Aside Blog on July 20, 2011
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On July 18, 2011, the US District Court for the Eastern District of Missouri remanded a case back to state court to determine what reimbursement Medicare was entitled to from a wrongful death action. Missouri statute provides beneficiaries of an estate to make claims for damages incurred by the decedent prior to death, therefore a settlement of all claims resolves claims for medical expenses which were paid by Medicare. The court felt that this was not a federal question and instead an action to apportion proceeds of a settlement pursuant to state law and therefore remanded the case back to the Circuit Court of Marion County.

I disagree with this court in finding this is not a federal question as the plaintiff questioned Medicare’s rights to recovery from a wrongful death recovery in general, not the apportionment from the settlement proceeds. The federal question is whether Medicare is entitled to recover at all from claims brought under a wrongful death statute by anyone other than the estate of the decedent. The Missouri state law is quite clear that the claims of the beneficiaries to the estate include the medical expenses of the decedent, and therefore requires no interpretation and case should have remained in federal court on the MSP application of whether the MSP gives the government rights to recover from those proceeds. Remanding this case to state court for apportionment will only eventually land it back in federal court because CMS has a long standing policy of not accept the apportionment and will likely challenge any such ruling on grounds that the MSP provides it will a full recovery right.

Medicare’s rights in wrongful death situations will depend entirely on whether the state statute permits recovery of the related medical expenses and by whom. By remanding this case to state court for apportionment, this court has in essence inferred that apportionment is appropriate. It will be interesting to see what this opinion contributes to the ongoing debate about apportionment of Medicare reimbursement demands.

MARTIN T. WASSON, et al., Plaintiffs, vs. KATHLEEN SEBELIUS, Secretary U.S. Department of Health and Human Services, Defendant.
Case No. 2:11CV46MLM
2011 U.S. Dist. LEXIS 77771
July 18, 2011, Decided