Court Addresses Interplay Between MSPA and Florida's Collateral Source Rule

The U.S. District Court for the Southern District of Florida recently considered the interplay between the Medicare Secondary Payer Act and Florida’s medical malpractice collateral source statute. Gordon v. Azar, 2021 U.S. Dist. LEXIS 28314, (S. D. Fla. 2021). There, the Plaintiff settled his medical malpractice claim for $1,000,000 and subsequently received a demand for reimbursement of conditional payments from CMS for $75,701.81. The Plaintiff appealed these claims and was denied at each level of the Medicare appeals process, which resulted in this appeal to the District Court. Plaintiff argued that Medicare is not entitled to recover from the settlement proceeds because their payments constitute “collateral source payments” subject to offset under Florida’s collateral source statute. Fla. Stat. 766.207 and 766.209. This was an issue of first impression in Florida, though the interplay between the MSPA and other Florida collateral source laws has been addressed. Each time, Florida courts recognized the priority of Medicare’s right to reimbursement and held that the collateral source rule does not apply to Medicare conditional payments. See Joerg v. State Farm Mut. Auto. Ins. Co., 176 So.3d 1247 (2015) and Pollo Operations, Inc. v. Tripp, 906 So.2d 1101 (Fla. 3d DCA 2005). The present Court agreed, finding that the MSPA and implementing regulations make clear that Medicare benefits are secondary to benefits payable by a primary payer and cannot be limited by state law.

Notably, there was a flaw in the Plaintiff’s appeal. The Plaintiff argued that he was legally precluded from recovering medical expenses under the Florida statutes and thus, such expenses could not have been- and were not- included in settlement. However, he failed failed to provide any documentation supporting his argument that medical expenses were not part of the settlement despite multiple requests from Medicare to do so throughout the appeals process. In absence of evidence to the contrary, the Court noted that the substantial settlement amount supports an inference that medical expenses (including expenses paid by Medicare) were considered in negotiating the amount of settlement. If the plaintiff had demonstrated that medical expenses were, in fact, not considered or recovered, it is possible that the outcome of the appeal may have been different as Medicare is only entitled to recover to the extent that statutes/settlements provide for payment of medical damages.

As this case demonstrates, the Medicare appeals process is complicated and it is extremely important to ensure that appeals include the proper supporting documentation. Our team here at Carr Allison is well versed in the nuances of the appeals process and would be happy to assist you with an appeal at any stage.