Court Finds Questions Remain as to Whether Medicare’s Lawsuit Necessary

David Trostle was hospitalized for sixty-six days after being given the wrong prescription medication by his pharmacy. Medicare paid the costs of medical treatment on Trostle’s behalf. When Trostle filed a lawsuit against the pharmacy and medical care center, he was represented by the Angino Law Firm, P.C. (Defendants). Prior to this litigation, Trostle passed away.

As part of settlement negotiations, Defendants obtained a conditional payment lien from Medicare in the amount of $1,211. However, after being notified of settlement, Medicare determined that $84,353 in conditional payments had been made on Trostle’s behalf. Medicare reduced the amount of the lien by the amount of attorneys’ fees, and determined that Trostle’s estate owed $53,295 in conditional payment claims. Though Defendants assert that $53,295 in settlement funds were set aside, the Medicare lien was not paid before Medicare filed suit for reimbursement of the lien. United States v. Angino, 2019 U.S. Dist. Lexis 30499 (U.S. Dist. M.D. Penn., February 26, 2019).

The United States (Plaintiff) sued Defendants for reimbursement of the full $84,353 lien under the Medicare Secondary Payor Act (MSPA).

Plaintiff filed a motion for summary judgment arguing that, as a matter of law, it is entitled to reimbursement of the full lien, plus interest, and is not limited to recovering the reduced lien of $53,295. To support the motion, Plaintiff relies on section 411.37(e) of the MSPA, which provides that in cases where Medicare “must file suit” to recover conditional payments, Medicare need not deduct attorneys’ fees from the lien amount.

Defendants argue that Medicare did not need to file suit to collect the lien, because funds were set aside for payment of the lien prior to distributing settlement proceeds, and Defendants have been willing to pay that amount. The court agreed that a question of fact remained as to whether Plaintiff had to pursue litigation to recover condition payments, holding that the mere fact that the United States sued is not sufficient to satisfy the “must file suit” requirement of the statute. As such, the Plaintiff’s motion for summary judgment was denied.

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