A Capehart Scatchard Blog

Third Circuit Rejects Argument That Plaintiff Was Not Required to Reimburse Medicare for Medical Expenses Incurred for Accident

By on August 21, 2014 in Blog with 0 Comments

Plaintiff Cecilia Taransky appealed to the Third Circuit Court of Appeals, claiming that she was not required to reimburse Medicare for conditional medical expenses advanced on her behalf as a result of a trip and fall accident. In Taransky v. Sec’y of the United States HHS, 2014 U.S. App. LEXIS 14408 (3rd Cir. 2014), the Third Circuit rejected that argument.

Taransky fell at the Larchmont Shopping Center in Mt. Laurel, NJ and sued the owners and operators of the shopping center (“Larchmont”) for the bodily injury she suffered. Taransky was a Medicare recipient and Medicare paid her medical bills. She settled her suit for $90,000 and Medicare demanded reimbursement for its payments.

After Taransky settled her lawsuit, she signed a release of “all past, present and future claims,” including medical treatment and for medical expense benefits in connection with the accident. The release also provided that any liens or subrogation claims would be satisfied and discharged from the settlement proceeds and specifically included Medicare liens and claims.

After the settlement, Taransky filed a motion in the New Jersey Superior Court, requesting an order apportioning the proceeds of the settlement between various elements of damages relevant to the anticipated administrative proceedings with the federal Centers for Medicare and Medicaid Services. She acknowledged her lawsuit sought damages for certain medical expenses for medical treatment, some of which were paid for through Medicare. However, she claimed that the New Jersey Collateral Source Statute N.J.S.A. 2A:15-97 (“Collateral Source statute”), precluded tort plaintiffs like herself from recovering losses such as medical expenses that were already paid by another source. Based upon that premise, she claimed that her Medicare expenses were not considered in the settlement negotiations and were not included in the settlement amount.

The Superior Court granted Taransky’s motion and entered an order that the settlement did not include any Medicare expenses. The order specified that the settlement amount was allocated solely to the plaintiff’s bodily injury and pain and suffering claim.

Thereafter, the Medicare contractor demanded reimbursement of the $10,121 that the Medicare program paid on her behalf. Taransky refused to pay, citing to the Collateral Source statute and the allocation order she received from the Superior Court.

Taransky then proceeded through the Medicare appeals process up to a hearing before an Administrative Law Judge, all of whom rejected her claims. Next, Taransky filed suit in the United States District of New Jersey, reiterating her claim that she was not responsible to reimburse Medicare from the proceeds of her settlement. The Government was granted summary judgment, dismissing her claim, and this appeal followed.

Taransky argued that the Government failed to demonstrate that Larchmont had a responsibility to make payment for her Medicare expenses and, thus, the obligation to reimburse was not triggered. However, the Third Circuit held that if the settlement releases the tortfeasor from claims for medical expenses, that is sufficient to demonstrate the beneficiary’s obligation to reimburse Medicare. Here, Taransky’s release specifically anticipated Medicare’s lien and provided that it would be satisfied and discharged out of the settlement proceeds. Thus, the court found that Taransky was reimbursed for her medical costs and she cannot hide behind the lump sum settlement to deprive the Government of the reimbursement it is owed.

Next, she argued that her settlement amount could not have included her medical costs as a matter of law because Medicare payments are a “collateral source” of benefits that may not be obtained form a tortfeasor under the Collateral Source statute. Although the New Jersey Supreme Court has not ruled on this issue, the Third Circuit predicted that the Court would hold that the Medicare payments, because of their conditional nature, do not constitute a collateral source under the Collateral Source statute. Thus, Taransky could not rely on that statute to avoid reimbursement to the Government.

Taransky also argued that the Government must defer to the Superior Court’s apportionment order, which provided that no portion of the settlement recovery is attributable to medical expenses. The Third Circuit rejected this argument as well, finding that it was not an adjudication on the merits and Taransky never made the Medicare contractor or the Government a party to her suit.

Thus, after rejecting the plaintiff’s numerous arguments, the Third Circuit found that the plaintiff must reimburse Medicare for the conditional payments it made for her medical expenses incurred in her trip and fall accident.

Share

Tags:

Betsy G. Ramos

About the Author

About the Author:

Ms. Ramos is an Executive Committee Member and Co-Chair of the Litigation Department at Capehart Scatchard, P.A. located in Mount Laurel, New Jersey. She is an experienced litigator with over 25 years experience handling diverse matters. Practice areas include tort defense, business litigation, estate litigation, tort claims and civil rights defense, construction litigation, insurance coverage, employment litigation, shareholder disputes, and general litigation.

.

Post a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Top