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U.S. Attorney Files Suit Against Texas Personal Injury Firm Requesting Full Reimbursement for CPCs

The United States brought an action against a Texas personal injury firm, Carrigan and Anderson, to recover payments made under the Medicare program on behalf of Carrigan’s client, Tomas Tijerina, pursuant to the Medicare Secondary Payer Act.

Tijerina suffered severe physical injuries as a result of an automobile accident in April 2014. Tijerina’s attorney, Stephen Carrigan, sent notice of Tijerina’s injuries and pending lawsuit to CMS’s Benefits Coordination and Recovery Center (BCRC). In March 2017, Carrigan and Anderson, Defendants, notified CMS that Tijerina had settled the pending claim for $70,000. In response, BCRC sent an Initial Determination demanding reimbursement of $46,244.74 that the Medicare program paid for Tijerina’s medical expenses related to his lawsuit. All charges were within weeks of the automobile accident.

Instead of reimbursing the amount owed to Medicare or challenging the amount due through the Administrative Appeals process, Defendants filed a motion with the 278th Judicial District in Waller County, Texas, requesting that the court issue an order limiting the Medicare reimbursement to approximately one-tenth of the amount of the Medicare demand. Defendant’s reasoning for the reduced reimbursement was based upon the decision in Arkansas Dept. of Health and Human Servs. V. Ahlborn, 574 U.S. 268 (2006). According to the Defendant, Ahlborn found that Medicare is only entitled to a portion of the settlement that actually constitutes reimbursement for the medical payments made. Importantly, however, the Ahlborn decision was not even about Medicare at all. Ahlborn discussed the recovery rights of Medicaid, which is a completely separate program from Medicare with a different right of recovery. Relying on the incorrect information provided by the Defendants, the Texas state court issued an order that reduced the recovery of Medicare’s conditional payments by 90% to $4,700. Defendants then sent notice of the decision, along with a check for $4,700, to BCRC.

In the complaint, the U.S. Attorney alleges that Medicare still has not received full reimbursement for the conditional payments and that the Texas state court lacked subject matter jurisdiction to challenge Medicare’s recovery of conditional payments. The U.S. Attorney is seeking relief for the remaining amount owed on the original demand, plus interest and attorney’s fees.

It will be surprising if this case is not found in favor of the U.S. Attorney’s office. There is a clear Administrative Appeals process that must be exhausted before any Judicial Review is allowed. Even then, a Texas state court would not have subject matter jurisdiction.

This case is yet another example of the importance of properly handling conditional payment claims. Although well-intentioned, the Defendants did not follow the appropriate channels for disputing and reimbursing the lien, therefore leaving other parties exposed. If you have any questions about proper conditional payment handling or your obligation to reimburse, please feel free to reach out to us.


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