I represent a man seriously injured due to the negligence of a state employee in a car wreck. Medicare has paid a lot of his medical bills and under federal statute has a right of subrogation. However, under R.C. 2743.02(D), recoveries against the state "shall be reduced by any collateral recovery received by the claimant"- construed to mean that the state is immune from subrogation claims from those entities which have paid the plaintiff's medical bills (see Community Ins. Co. v ODOT, (2001)92 Ohio St. 3rd 376). If the client receives no money from the state for the bills paid by Medicare, there is no money to satisfy Medicare's subrogation claim, other than whatever money is otherwise received from the state in settlement of the claim. Since non-economic damages in claims against the state are capped at $250,000, a claim against the state where Medicare has paid a significant amount may leave little or no money for the client if Medicare's subrogation claim must still be satisfied. The State is adamant that the U.S. Sup. Ct. Case of Alden v Maine supports its claim that insurance companies and Medicare may not maintain subrogation claims against the State of Ohio and that R.C. 2743.02 is not preempted by a federal law passed in the exercise of Article I, Sec. 8 authority is this correct?
Does the federal statutory right of subrogation for Medicare supersede the Ohio state law on this matter? Is Medicare still entitled to receive out of the proceeds of a settlement the amount it paid, despite the Ohio statutory and case law above? I think the answer to both questions is yes, but I'm hoping there are counter arguments supported by case law.
Unfortunately Medicare is entitled to reimbursement for all injury related conditional payments made from date of injury to date of settlement, period. Having said that, I would highly recommend you consider one of several administrative remedies available to you and your client – Pre-settlement compromise, Post-settlement Compromise, or Post-settlement waiver. These remedies are great for situations where the client would end up with little or nothing if they had to pay back the entire conditional payment amount to Medicare. These are based on hardship and the general ideas of fairness and equity.
Please let me know if you need further information or would like our firm to assist.