Medicare Set-Aside Blog on February 13, 2012
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For the better part of the past 18 months, I have been sitting around hoping for any federal appellate decision involving MSP apportionment for the sole purpose of putting us on the path to the Supreme Court. Well Workcompcentral has reported that Patton Boggs is petitioning for cert in Hadden v. US [Hadden to Challenge Medicare Decision at U.S. Supreme Court: Top [2012-02-07]]. On behalf of all of us in the MSP industry that are tired of fighting this pointless and questionably constitutional fight, may I just say thank you to the MARC Coalition for raising the necessary funds to make that happen. In a recent article in Business Insurance where I was quoted as hopeful that this course of action would be pursued, Mike Merlino of Sedgwick disagreed that the issue of apportionment would reach the Supreme Court due to the state law distinctions in Bradley. But what I think the article failed to recognize was that his statement is the crux of the problem – that the determination under state law should be the important distinction. While first year law school taught me that federal law trumps state law, the point I think is lost on CMS is that absent the underlying state law issues, there is no recovery for Medicare. Bradley is the right outcome, perhaps not in dollar amount so much as in principle given that the probate court accepted the dollar claims of the 10 surviving children without question which severely diminished Medicare’s tangible claims. The probate court was the appropriate venue to make a determination as to who got what under the state wrongful death laws and rather than participate in those proceedings and challenge the valuation of the various intangible claims, CMS played the MSP card. Medicare should not have rights to recover anything more than what is available under state law and whether that be affected by contract governing policy limits, comparative law or statutory caps limiting recovery, or because a state agency had proper jurisdiction to make such a determination, CMS should only be able to access its equitable share. Only badly written law, cobbled together over 30+ years, supports the fact that Medicare has a right under federal law to be fully reimbursed up to the full amount of the settlement after procurement cost reductions regardless of the underlying legal issues. The issues on cert are equity and public policy, plain and simple, and I remain optimistic that the Supreme Court will recognize the significance of their decision on this petition.

[PS: To Dave Farber in response to your invitation at the end of the article, I am absolutely willing to help with amicus briefs in any way that I can. – Jen Jordan]