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Litigation in Brief
Fall 2010
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DeCaro, Doran, Siciliano,
Gallagher & DeBlasis, LLP
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The “Brave New World” of Medicare Secondary Payer Requirements
By John W. Leonard
Since 2005, when Congress implemented revisions to the Medicare Secondary Payer (MSP) provisions, the government approach to recovering past ‘conditional payments’ made for the benefit of injured Medicare-eligible parties, has taken on a new zeal. In fact, by most accounts, there has been a greater emphasis on recoupment by the Centers for Medicare & Medicaid Services (CMS) and U.S. Attorney’s Office in the previous five years than the preceding twenty-five combined. Take, for instance, two illustrations.
In USA v. Stricker, a case currently pending in the U.S. District Court for the Northern District of Alabama, the U.S. Attorney’s Office filed suit to recover Medicare funds that were paid during a class action lawsuit in 2003. Ultimately, the underlying class action settled for approximately $300 million dollars but, the government alleges, the parties failed to inform Medicare that the case had been resolved. Now the government is seeking reimbursement to the tune of $134 million—double damages on the original sixty-seven million dollar lien.
On the opposite end of the spectrum, in USA v. Harris, CMS filed suit in the Northern District of West Virginia to collect $10,000 that it conditionally paid and did not recoup. Try telling Mr. Paul Harris, the plaintiff’s attorney in the underlying matter (which settled for a total of $25,000), that CMS is only interested in the ‘big fish.’
Originally enacted in 1980, MSP issues have been relevant for the last thirty years. However, with CMS’ renewed emphasis on recovery, it appears MSP’s have taken on a new significance.
Today, when a Medicare eligible person is injured in an accident and requires medical treatment, Medicare will conditionally pay for the services. The attorney, insurer, or beneficiary will then notify Medicare’s Coordination of Benefits Contractor, who follows with an investigation of the injury, gathers all information related to the parties and underlying accident, and passes that information along to the Medicare Secondary Payer Recovery Contractor (MSPRC) for collection.
MSPRC, as of 2006, is now the only entity charged with MSP collection efforts nationwide. After issuing a series of formal letters noting the party’s rights and responsibilities, it becomes incumbent upon the attorney, insurer, or beneficiary to notify MSPRC of final settlement, judgment, or award in the underlying case. MSPRC then issues a final demand letter, and recoupment of Medicare’s original conditional payment is due within sixty days thereafter. After sixty days, interest begins to accrue. After 120 days, the matter is referred to the Department of Treasury. The government then has a six-year statute of limitations to file suit—evidenced by the Stricker and Harris cases—and collect their debts.
In many cases, a Medicare eligible party will require medical treatment for the remainder of his or her life. And, with Medicare expected to make payments into the future for continued treatment, Medicare ‘set asides’ must be included in any settlement agreement to ensure that Medicare is reimbursed in the future.
While the previous five years have seen a surge in recoupment efforts by Medicare for conditional payments, the next five years could see the same increased attention being paid to reporting requirements and, perhaps, set asides. Beginning October 1, 2010, in fact, insurers and self-insured entities are required to report claims that are made by all Medicare-eligible individuals, subject to certain threshold requirements that will diminish over time. The new reporting system will utilize a secured CMS website. Failure to file such a report carries a $1,000 civil penalty, per beneficiary, per day.
Although Medicare does not currently mandate reporting set asides, we recommend that all set asides be reported to help protect against future collection efforts. By regulation, CMS has a right to collect payment from any entity that received a primary payment.
With an increased emphasis on recovering past conditional payments, and new mandatory electronic reporting requirements (not to mention stiff penalties for noncompliance), CMS has made it clear that a new day in Medicare Secondary Payer requirements has arrived.
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Recent Developments - Maryland
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Causation in Workers’ Compensation Cases
Evidence, at a minimum, must establish beyond mere conjecture or guess that the injury could have caused the consequence and that there was no other intervening cause. In this case, the Plaintiff worked for Shady Grove Hospital, the Defendant, as a psychiatric technician. On July 2006, while retraining a patient, Plaintiff fell to the ground and injured his right knee. He underwent surgery for his right knee and during recuperation he began complaining about his left knee. An MRI of his left knee was then ordered and he subsequently sought approval from the Workers’ Compensation Commission (“WCC”). A WCC hearing was held to determine whether Plaintiff’s left knee injury was causally related to the work-related event that occurred July 2006. The WCC found that the left knee injury was causally related to the aforesaid July 2006 accident. Shady Grove Hospital appealed the WCC decision to the Circuit Court. The court was asked to instruct the jury as follows: “In workers’ compensation cases, proximate cause means that the accident could have caused the injury and no other efficient cause intervened between the accident and the injury.” The trial judge refused to grant the instruction and responded: “. . . that language was written for you and for me and for law professors to sort of think about all this.” He further noted that if he did give the instruction he would have to define words such as: efficient, intervening, and proximate cause to the jury. Because the WCC’s decision is presumed to be prima facie correct, the jury was not properly apprized that the burden was on Shady Grove Hospital to prove that the WCC decision should be reversed. Thus, the trial court’s refusal to grant the instruction as to causation, which was at the heart of the only issue submitted to the jury, prejudiced the Plaintiff. Wilson v. Shady Grove
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Workers’ Compensation - Location of Injury Determines
A Maryland resident, Johnson, suffered an injury while working in the District of Columbia. As a result, the central question in the workers’ compensation case was whether the principal contractor was liable to pay workers’ compensation benefits to its subcontractor’s employee where the principal only carried workers’ compensation coverage in Maryland. The Workers’ Compensation Commission (“WCC”) determined that Johnson was the principal’s statutory employee within the meaning of the Workers’ Compensation Act. Despite that fact, however, the WCC found that the principal was not liable because, given the location of the injury, no jurisdiction would have existed had the principal been Johnson’s direct employer. The circuit court upheld the WCC decision, but the Court of Special Appeals subsequently reversed for public policy reasons. The Court of Appeals ultimately agreed with the WCC and the circuit court and found that the principal was not responsible to pay the benefits. W.M. Schlosser Co., et al. v. Uninsured Employers’ Fund
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Non-Economic Damages Cap
In this case, the Plaintiff was seriously injured when his motorcycle and a Washington Metropolitan Area Transit Authority (“WMATA”) Metrobus collided at an intersection. The Plaintiff and his wife filed their complaint for negligence and loss of consortium seeking $7 million in damages, in addition to costs. The court identified the loss of consortium claim as derivative of the underlying personal injury claim and, as a result, applied a single non-economic damages cap to the entire action. Sylvester Poctor v. Wash. Metro. Area Transit
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| Recent Developments - Virginia |
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Contributory Negligence a Jury Question in Virginia
A trial court erred in granting a motion to strike the evidence following trial. The plaintiff was operating his bicycle on a public roadway and admitted that he looked down upon entering the intersection and was struck by defendant motorist. Defendant motorist successfully moved to strike the evidence as plaintiff was contributorily negligent in failing to pay full time and attention. The Supreme Court of Virginia reversed, holding that the trial court erred in granting the motorist’s motion to strike because the jury could have determined from the evidence that the bicyclist had acted reasonably under the circumstances. Moreover, even if the bicyclist's failure to maintain constant visual contact with the motorist's vehicle was negligent, the jury could nonetheless have found that such negligence did not proximately cause the accident or that the bicyclist's action of momentarily looking at his speedometer was reasonable. The Supreme Court of Virginia stated in its opinion that it would “take the opportunity to again stress the principle of tort litigation that issues of negligence and proximate cause ordinarily are questions of fact for the jury to determine, rather than questions to be determined by the trial court as a matter of law.” The Court explained that the proper procedure is for the trial court to overrule a motion to strike and submit a case to the jury. The trial court should then set the verdict aside in such a case so that the Court could simply reinstate the verdict if the matter were appealed, instead of ordering a new trial. Rascher v. Friend
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Virginia Statute Which States That a Violation of the Statute is Not to be Considered Negligence Does Not Preclude a Finding of Common Law Negligence
A Virginia statute requires that infants be secured in approved car seats, but states that failure to do so shall not be considered for purposes of negligence, mitigation of damages or be admissible. Father did not secure his four year old in a car seat, but instead placed her on the floor of his pickup truck in a foam seat. Vehicle was involved in a car accident in which daughter was violently thrown about the vehicle. Daughter, by her mother, brought suit against father for failing to properly secure daughter. The trial court granted father’s demurrer as the statute did not allow violation of the statute to be considered. The Supreme Court of Virginia reversed, holding that the statutory change in the common law was limited to that which was expressly stated in the statute or necessarily implied by its language. The Supreme Court of Virginia held that the General Assembly did not intent to eliminate common law causes of action arising from injuries sustained by a child in a motor vehicle accident. Instead, the statute precludes negligence per se actions. The statute itself could not be mentioned during trial. The Supreme Court also stated that daughter could not be contributorily negligent due to her age and, further, could not legally be responsible for mitigating her damages. Evans v. Evans
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Podiatrists Can Testify as to Reasonableness of Treatment but Cannot Testify as to Cause of Injury
– Plaintiff brought a claim under the Federal Employers' Liability Act for injuries suffered to his feet and ankles while working at a rail yard. The circuit court had granted a motion in limine preventing podiatrists designated by plaintiff from testifying as to causation. In affirming, the Supreme Court of Virginia explained that statutory law defined the practice of medicine, which included diagnosis of injury, and podiatry, which did not. Both medical doctors and podiatrists can engage in the treatment of a foot and ankle injuries, but only a medical doctor can engage in diagnosis and therefore, only a medical doctor is qualified to render an expert opinion regarding causation. Hollingsworth v. Norfolk S. Ry
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Recent Developments -
District of Columbia
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Medical Malpractice - Consulting Physician’s Duty
The District of Columbia Birth Center (DCBC) operated as a group of nurse-midwives providing child birth services to women. Dr. Miodovnik worked as both director and consulting OB/GYN for DCBC, which includes “chart reviews” but not physical examinations of the patients. Plaintiff Abdul-Haqq went to DCBC and requested a vaginal birth.. Despite concern with Plaintiff’s preference, Dr. Miodovnik noted the associated risks and approved the birth plan. Abdul-Haqq’s child was subsequently born with brain damage and other severe and permanent injuries. Abdul-Haqq alleged that Miodovnik breached his duty of care by failing to override the birth plan and patient preference to proceed with vaginal birth. The District of Columbia Court of Appeals affirmed the Superior Court’s decision that Miodovnik owed only a reasonable duty of care, which he followed when he expressed his concern for the associated risks. Failure to override the patient’s preference, in this particular case, was not a breach of the standard of care. Gilbert v. Miodovnik
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Medical Malpractice - Expert Testimony
After a negative colonoscopy, a CT scan showed a large mass attached to the bladder of Mr. Kordas, which was subsequently found to be appendiceal cancer. Kordas’ treating physician, Dr. Sugarbaker, suggested and performed a “second-look” surgery that revealed millions of tiny nodules in Kordas’ abdominal cavity. Sugarbaker removed the entire colon, mesentery, omentum, and surrounding tissue area. The nodules were later found to be a fungal infection indigenous to the area where Kordas lived. Kordas brought a malpractice suit against Sugarbaker which resulted in a finding for Sugarbaker. On appeal, Kordas challenged the admission of Sugarbaker’s expert testimony regarding the national standard of care. Kordas argued that Sugarbaker’s specialty is relatively rare and the majority of the expert testimony presented was based on Sugarbaker’s own research and publications. The Court of Appeals upheld the trial court’s decision to admit the expert testimony and allow the jury to apply the proper weight to the testimony.
The D.C. Court of Appeals rejected this argument stating “the national standard of care against which a defending doctor’s actions should be measured must be that of a physician under the ‘same or similar circumstances,’” and not simply a generic Board Certified Surgeon without specialty. The competing testimony - Kordas’ general surgeon experts and Sugarbakers’ specialized surgeon experts - was an issue properly left to the jury. Kordas v. Sugarbaker
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Negligent Supervision Found to Stand Alone
A local resident, Tulin, and a police detective, Rauf, were involved in a motor vehicle accident. Despite Tulin’s vehicle having been hit from behind, Rauf called Officer McKoy to the scene and suggested that Tulin be arrested for reckless driving. Tulin spent the next 14 hours in jail and was subsequently found not guilty of the charges. Tulin filed suit against Rauf, McKoy, and the District of Columbia on several counts, including negligent supervision. The jury found in favor of McKoy on all counts but against the city for negligently supervising McKoy. The District appealed, arguing inconsistent verdicts. The District of Columbia Court of Appeals disagreed. It held that a reasonable jury could find that McKoy was compelled to arrest Tulin because of the influence exerted by Rauf and that the negligence existed in the improper influence alone. District of Columbia and Rauf v. Tulin
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17251 Melford Boulevard
Suite 200
Bowie, Maryland 20715
(301) 352-4950
Fax - (301) 352-8691
3930 Walnut Street
Suite 250
Fairfax, Virginia 22030
(703) 255-6667
Fax - (703) 299-8548
740 Stagwell Road
Mail: P.O. Box 338
Queenstown, Maryland 21658
(410) 827-5013
Fax - (410) 827-4323
www.decarodoran.com
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About The Firm
DeCaro, Doran is very pleased to announce that John W. Leonard will join the firm as an associate attorney later this year. John has been a law clerk with the firm since June 2009 and recently sat for the Maryland Bar Exam in July of this year. John continues as a full-time law clerk at this time and, upon being sworn in to the Maryland Bar, he will become an associate attorney working on the defense of tort claims under the supervision of Chris Dunn.
John attended the University of Richmond where he received his Bachelor of Arts degree in Political Science in 2002. Thereafter, he worked as a Division Administrator for the United States Department of Commerce before attending the Columbus School of Law at The Catholic University of America, from which he received his law degree in May 2010. While pursuing his legal studies, John also served as Editor in Chief of the Journal of Contemporary Health Law and Policy.
Additionally, during 2008, John served as a clerk to Administrative Judge Richard Schneider at the Equal Employment Opportunity Commission in Washington, D.C. In that capacity, John reviewed discrimination claims and drafted proposed orders for the administrative judge for matters arising out of the Equal Pay Act, Title VII, Age Discrimination and Employment Act, and the Rehabilitation Act. In addition to handling insurance defense matters with the firm, John will be called upon to utilize his EEOC experience in assisting in the defense of employment related claims.
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