Medicare is Officially not a Collateral Source in New Jersey

Medicare Set-Aside Blog on March 28, 2012
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It is frequently argued by attorneys that Medicare is not entitled to reimbursement in states with collateral source rules because plaintiffs are unable to recover those damages under state law. In an opinion out of the United States District Court for the District of New Jersey on March 23, 2012, the court concluded that is not the case under the New Jersey statute §2A:15-97. New Jersey courts determined as early as 1994 that reimbursable claims such as payments made by Medicaid are not considered a collateral source for purposes of the statute [see Lusby v. Hitchner, 273 N.J. Super. 578 (App. Div. 1994)]. Well nothing is different when it comes to Medicare. Because Medicare has a “nearly unqualified right to reimbursement,” the outcome is the same as when Medicaid has rendered benefits. The collateral source rule does permit personal injury settlements to include recovery of medical expenses paid for by Medicare because Medicare is statutorily entitled to reimbursement for those same expenses.

JOSEPH B. MASON, Individually and on behalf of all persons similarly situated, Plaintiff, v. KATHLEEN SEBELIUS, et al., Defendants.

Civil No. 11-2370 (JBS/KMW)


2012 U.S. Dist. LEXIS 40592

March 23, 2012, Decided