Tuesday, December 9, 2008


Posted by Matthew Garretson

I have a Medicare question. We have a case where arguably the medical treatment given to the deceased client, which was paid by Medicare, is not related to the medical malpractice. In the death compromise (approval) I asked the court to hold that none of the medical treatment was related and that there would no allocation in the settlement for past medical expenses. I put Medicare on notice and they didn't respond. My questions are as follows: Is this court determination binding? If not, is there a process for me to hold the money in escrow and get an administrative or other determination from Medicare?

-New York Attorney

My general thoughts are as follows: As long as you have a judicial allocation based on the merits (i.e. fact-based determination on allocation), Medicare will follow the order. See excerpt from MSP Manual below:

50.4.4 – Designations in Settlements
(Rev. 1, 10-01-03)
In general, Medicare policy requires recovering payments from liability awards or settlements, whether the settlement arises from a personal injury action or a survivor action, without regard to how the settlement agreement stipulates disbursement should be made. That includes situations in which the settlements do not expressly include damages for medical expenses. Since liability payments are usually based on the injured or deceased person’s medical expenses, liability payments are considered to have been made “with respect to” medical services related to the injury even when the settlement does not expressly include an amount for medical expenses. To the extent that Medicare has paid for such services, the law obligates Medicare to seek recovery of its payments. The only situation in which Medicare recognizes allocations of liability payments to nonmedical losses is when payment is based on a court order on the merits of the case. If the court or other adjudicator of the merits specifically designate amounts that are for payment of pain and suffering or other amounts not related to medical services, Medicare will accept the Court’s designation. Medicare does not seek recovery from portions of court awards that are designated as payment for losses other than medical services.

With respect to notice, how long ago did you put Medicare on notice and did you provide the MSPRC with a copy of the court order or just a letter advising?

Another consideration (if this is a wrongful death case in New York) is that NY does not allow for the recovery of meds under their wrongful death statute. New York WD Statute McKinney's EPTL § 5-4.1 Survival EPTL 11-3.3(a) Doe v. State, 155 Misc. 2d 286: this case interprets the survival act and defines the damages that are recoverable under the survival act and what is not. It also points to the wrongful death act as being for the beneficiaries and the estate has no part in those damages. The wrongful death act is for the survivors...i.e. spouse, minor children, etc.