Wednesday, May 28, 2008

Application of Law in an ERISA Case

Posted by Matthew Garretson

I am in federal court in Nevada fighting with a Plan (document) out of New York over reimbursement from a tort recovery. My client incurred his injuries here and benefits were paid here. What circuit’s law would apply first to the judge’s determination re: the Plan’s right to reimbursement? The Plan language itself does not address the issue.

-Nevada Attorney

I would make the argument that your venue in Nevada is proper under ERISA and that 9th Circuit precedent should be applied. ERISA allows for venue in any jurisdiction where the plan is administered, where the breach occurred, or where a defendant may be found. See 29 USC 1132(e)(2). There isn’t much consensus among the courts on this point, but an early ERISA decision from the 9th Circuit held that this may be the location where the participant resides because 1) the Plan and its parent company can be “found” there, 2) maintenance of a plan there satisfies the minimum contacts test, and 3) forcing the beneficiary to pursue an action across the country would cause “peculiar hardship.” Varsic v. U.S. Dist. Court for Central Dist. of California, 607 F.2d 245 (9th Cir. 1979). (However, take note that in Varsic, the beneficiary was the plaintiff suing the Plan. If the Plan files suit, it may choose to do where it is administered under ERISA. Your client would then likely have to seek to transfer venue based on hardship.)

Once venue is secure, I would then argue that because the plan document is silent on the matter, the law of the proper venue should be applied. I recently spoke about this issue with Mark Taylor, our firm’s lead on ERISA / Private health liens, and he wasn’t familiar with any solid authority to the contrary. However, be wary of an attempt by the plan to argue that the law of its home jurisdiction should be applied to promote uniformity in plan interpretation – a stated policy of ERISA’s original enactment.

Thursday, May 22, 2008

Medicaid, Wrongful Death Case

Posted by Matthew Garretson

Husband, wife and two kids are involved in an accident. Father dies at age 31 as the sole bread winner (no conscious pain and suffering, but taken to the hospital), mom has extensive injuries and both kids have injuries (not quite as severe) all paid through Medicaid. We have a $60K offer of limits from tortfeasor (two policies) and $240K offer of limits from UIM carrier.

Questions: can all $300,000 in insurance proceeds be allocated to wrongful death? Can Medicaid subrogate against the underinsurance proceed (or only against a liable party or third party in 5101.58)?

The law doesn't seem real clear on these issues. Am I missing something in my research?

-Ohio Attorney

Based on your description, it appears that if there was no conscious pain & suffering, that a survivorship claim is limited, at best. As a result, allocating all to the wrongful death statutory beneficiaries under R.C. 2125.02 is more than likely acceptable. The Judge will be comparing the death of a person and his associated injuries with the loss of a husband and father. Under the statute (2125.02) the wife and children are conclusively presumed to have been injured for loss of society, companionship, etc. We have taken the position before that in an instance where settlement proceeds are allocated to WD beneficiaries, the Medicaid lien that follows the decedent does not follow to the those beneficiaries. Getting the Judge to allocate in this manner is just a matter of explaining the facts of the case. BUT, to be sure of a result, I would notify ODJFS as well - give them a chance to argue in court if they want to - that the children should not get it all (along with wife).

It would appear that there is likely to be some conditional payments made by Medicaid for the benefit of the children, but you note their injuries were not as severe, so opening a tort recovery file on them would likely not lead to a significant recovery amount.

The UIM question I do not know off the top of my head, but I believe that question may be rendered moot if the allocation goes to beneficiaries for whom injury-related care has not been paid by Medicaid.

Wednesday, May 21, 2008

Medicare Set-Aside Specifics

Posted by Matthew Garretson

Mr. Garretson – I had the pleasure of listening to your presentation with regard to Medicare Set-Asides last August in Montana. In follow up, I would appreciate a few minutes of your time to respond to the following questions.

We are negotiating settlement of a client’s future medical benefit entitlement relative to a work comp claim. A set-aside has been calculated and approved through CMS, with funds reserved specifically for conservative treatment to include prescription drugs, follow appointments with the treating physician, etc. The set-aside amount was calculated with use of a WC fee schedule (for provider care) and wholesale pricing (for pharmaceuticals). The set-aside provisions specify that expenses are to be paid in accordance with the fee schedule and wholesale pricing used to calculate the set-aside amount. As the basis for our dispute, the necessity of a particular (and costly) medical procedure is at issue.

My questions are as follows:

(1) If our client self-administers his set-aside account, how does he pay medical expenses based on fee scheduled or wholesale prices if billed at “retail” prices for expenses incurred?; and

(2) If the medical procedure at issue is determined to be necessary by a treating physician post-settlement, will Medicare pick up the cost as they have signed off on they have signed off on the set-aside and the procedure was not considered in the assessment of future treatment (Medicare has approved payment for such procedures)?

I understand you are extremely busy, and I appreciate any insight you can provide us into these issues. Thank you for your time, and I hope all is well.

-Montana Attorney

Your questions are ones we are asked on a regular basis. Both are very good questions. My response to both follows:

If your client chooses to self-administer his MSA, to ensure that he receives the benefit of paying only the appropriate workers compensation fee schedule amounts, we recommend that he directs his providers to the section of the CMS approval document which specifically states: The proposed settlement agreement provides for future medical expenses to be paid based on the workers’ compensation fee schedule for the state of Montana. Therefore, the WCMSA is approved to pay providers, physicians and suppliers based on the workers compensation fee schedule in effect for this state for future medical expenses that would otherwise be reimbursable by Medicare. (This statement is usually found on page 3 and the second paragraph). We recommend that your client contact his providers to address this situation prior to receiving treatment to avoid any confusion. Usually providers abide by the CMS document and welcome the payment at time of service. Obtaining the fee schedule can usually be done by contacting the state of jurisdiction worker’s compensation office, via internet or even asking the provider.

The issue of obtaining prescription medications at the worker’s compensation rate may prove to be more difficult. Usually pharmacies are not as willing to bargain regarding price, so it may take some effort of your client’s part to be able to achieve this. Networking with a cost-containment company would prove beneficial should they run into problems in this area.

Your question regarding a procedure which is determined to be medically necessary by the provider - but was not included in the MSA allocation - and its ability to be paid for by the MSA is a great question. When the allocation was prepared, it is simply a “snapshot in time” of anticipated injury related medical care. If an unexpected infection, delayed wound closure or some unforeseen condition should develop, as long as it is determined to be injury related and a Medicare approved service, it can be paid for by the MSA. Usually a note from the provider relating this service to the injury provides enough documentation in the eyes of CMS.

I hope that you found my answers informative, but should you have any additional questions, please feel free to contact me again.