Suit Against Medicare to Determine Conditional Payment Amount Dismissed – Action Not Ripe
Roy Franco
April 15, 2011

A recent decision demonstrates the futility of using the courts to establish what is owed Medicare in an ongoing liability or workers’ compensation claim. In this particular situation, plaintiff filed a state court proceeding to recover for injuries she sustained due to an automobile accident. Her lawyers also filed, as part of that state action, a third party complaint against two potential public entity lien claimants for a determination of what they were owed. The Secretary for HHS Centers for Medicare and Medicaid Services (CMS), after service of the third party complaint, promptly removed it to Federal Court and requested dismissal. The court agreed with CMS and the matter was dismissed against them.
Plaintiff learned the hard way that obtaining jurisdiction against CMS is difficult. This process is covered by several statutes. Congress bars jurisdiction against CMS pursuant to 42 U.S.C. §405(h, made applicable through 42 U.S.C. §1395ii. To get to court, first requires a Medicare beneficiary to exhaust her administrative remedies, as required by 42 U.S.C. §1395ff.
The administrative process cannot be accessed by the Medicare beneficiary until CMS makes an initial determination of what is owed. CMS cannot make this determination until a beneficiary receives an award, settlement or other payment in satisfaction of her claim from an insurance company, including self insurance whose responsibility for medical benefits would then be demonstrated. See 42 U.S.C. §1395ff(a). Thus, any court action by plaintiff before a determination and exhaustion of administrative remedies will fail.
This is what took place in Portman v. Goodson, et. al., 2011 U.S. Dist. LEXIS 19491 (Western Dist. Of Kentucky). In summary the District Court Judge found:
Goodson’s purported injury is speculative. There may be no overpayment for Portman’s medical care. Any initial determination of overpayment may be found to be correct. An initial determination may be corrected through the administrative process. Repayment may be made by another person or entity, thus eliminating any possible obligation of Goodson to do so. Thus in the absence of a judgment, settlement, or other payment and without any final determination by the Secretary concerning reimbursement, Goodson cannot establish an “injury in fact [that is] certainly pending.” National Rifle Assoc., 132 F.3d at 280. As the matter is not ripe, there is no justiciable case or controversy and the matter must be dismissed for lack of subject matter jurisdiction. Id., see also, Gobrecht v. McGee, 249 F.R.D. 262 (N.D. Ohio 2007); Walters v. Leavitt, 376 F.Supp.2d 746 (E.D.Mich. 2005).
Jeff Signor and I addressed this very issue in our book, Medicare Secondary Payer Compliance, How to Mitigate Exposure in the Medicare Beneficiary Personal Injury Case, Chapter 6. The book is available through Juris Publishing and will guide the practitioner through the appropriate procedure. If a Medicare beneficiary wants to know what is owed Medicare before settlement with an insurance company, including self insurance, of his or her claim, an estimate can be requested. This usually comes in the form of a Conditional Payment Letter, but CMS could also issue in its place a Conditional Payment Notice, if settlement has already occurred. This is only an estimate. A Final Demand Letter from CMS can only be requested after a settlement.
Franco Signor LLC specializes in securing Conditional Payment Letters, Conditional Payment Notices and Final Demand Letters from Medicare for a reasonable charge. Please feel free to call on us at anytime to show you how. We are certain by having us serve as your Medicare Secondary Payer Compliance Center of Excellence, unnecessary expense can be avoided. Dealing with Medicare can be frustrating, give us an opportunity to take on that burden for you.