Bertrand v. Talen’s Marine & Fuel LLC, 2012 US Dist. LEXIS 78053 (U.S. Dist. Court for the Western District of Louisiana, 6/4/2012).

Facts: (A condensed version of the Court’s Findings of Fact are set forth below):

  1. Plaintiff was injured in a workplace accident, and he was employed, at the time, by defendant Talen’s.
  2. As a result of the accident, plaintiff underwent surgical back procedure.
  3. Plaintiff’s treating physician opined that plaintiff would require medication for his lifetime.
  4. Bertrand filed suit seeking to recover for the damages he sustained as a result of the accident.
  5. Subsequent to a settlement conference with the Court, plaintiff’s claims against defendants settled.
  6. Recognizing that an MSA might be appropriate to protect the interests of Medicare under the MSP Act under the facts and circumstances in this matter, plaintiff hired a structured settlement broker and Medicare Set Aside vendor, and a Liability Medicare Set Aside was prepared.
  7. Based on the Liability MSA Report, plaintiff’s future potential medical expenses that would be covered by Medicare, and related to the injuries claimed in this lawsuit, amounted to $64,866.88.
  8. CMS does not currently require or approve Medicare set-asides when personal injury lawsuits are settled. CMS does not currently have a policy or procedure in effect for reviewing or providing an opinion regarding the adequacy of the future medical aspect of a liability settlement or recovery of future medical expenses incurred in liability cases.
  9. Plaintiff was born in 1960, and he will not obtain the age of 65 within 30 months of the date of settlement.

10.  The Court found the estimate of future medical costs, as set forth in the MSA, to be both reasonable and reliable.

11.  The Court finds that $64,866.88 adequately protects Medicare’s interests and should be available to provide funding for future medical items or services related to what was claimed and released in this lawsuit that would otherwise be covered or reimbursable by Medicare.

12.  Plaintiff is aware of his obligation to reimburse Medicare for all conditional payments made by Medicare for any medical expenses he incurred that were related to the injuries claimed in the lawsuit.

13.  Although provided with notice of the hearing, HHS opted not to participate and provided no notice of any conditional payments for which it intended to seek reimbursement. Therefore, the Court finds that there is no evidence of any conditional payments made by Medicare before the time of the settlement.

Issue:  Have the parties sufficiently considered Medicare’s interests by allocating $64,866.88 of the settlement proceeds to pay for future incident-related medical expenses which would otherwise be reimbursable by Medicare?

Court Holding:  Yes.  The Court references the fact that the Federal Government does not have any formal rules to follow when it comes to future incident-related care and treatment in the liability case.  In fact, the Centers for Medicare & Medicaid Services (“CMS”) was provided with a copy of the Order setting a hearing on the issues.  CMS’s response to the Order read as follows:

[T]he Centers for Medicare & Medicaid Services (CMS) does not review or verify counsel’s determination of whether or not there is a recovery for future medical services or the determination of the amount to be held to protect the Medicare Trust Fund except under limited circumstances. Based on the limited information available in the [*4] complaint and relevant pleadings, CMS would neither participate nor review the parties’ determination of whether a set aside was needed or the amount of the set-aside with respect to the liability settlement.

The Court took evidence of the issues and “SO Ordered” exactly what the parties requested.

Franco Signor LLC Commentary:  The parties to this action spent considerable time, effort and expense to hold a hearing on this issue.  Compliance with the Medicare Secondary Payer Act is now leading to absurd results in absence of guidance by the Centers for Medicare & Medicaid Services (CMS).  It is amazing such extremes are being pursued for a case where the claimant is  not a Medicare beneficiary, and will NOT be a Medicare beneficiary for more than 30 months.   The parties base their involvement of the Court on a Workers’ Compensation guideline issued by CMS.  While we disagree with the applicability of such CMS recommendations for the liability claim, the applicable guideline, on its face, did not apply to this liability case.  If this were a Workers’ Compensation case then no MSA would have been required.  Unbelievably, this guideline, in the parties’ opinion, supports a LMSA.

This is a Jones Act case and falls outside the scope of the applicable Workers’ Compensation Act.  The parties’ reaction to Medicare is inconsistent with CMS recommended Workers’ Compensation guidelines to protect Medicare’s interests.  The  cost and expenses incurred by the parties, not to mention the court, to undertake this exercise is an example of the extreme lengths parties will take to come up with their own ideas of MSP Compliance.  Until CMS brings clarity to this issue, we can expect more interesting decisions.  In the interim, parties should step back and take a reasonable approach to compliance.

Thus far, the only known published guidance by CMS is its Memo on September 29, 2011.  In that document, CMS states that Medicare’s interests are protected if plaintiff’s treating physician certifies that treatment related to the incident has ceased.  The Memo does not offer what to do for situations where treatment is expected to continue.  The term Liability Medicare Set Aside (LMSA) is mentioned, but no guidance is offered concerning when or how to insert the LMSA into a given case.  Until the liability industry is given more direction, the parties will fashion compliance in their own terms.  So long as parties agree upon a certain process to demonstrate compliance, there are no limits to what can be done, as evidenced by the process undertaken in this case.  It is our opinion that the parties should act reasonably in taking next steps with regard to future medicals in a liability settlement for the present.

There is strong evidence that CMS is attempting to formulate rules concerning LMSAs.  We have covered this in our blog and we will continue to do so.  Until more structure is supplied by CMS, going beyond what is reasonable may not be protecting anyone, and could very well be hurting the Medicare beneficiary.

Call upon us prior to taking such costly steps in your liability case!  We can help!


One response to “Bertrand v. Talen’s Marine & Fuel LLC, 2012 US Dist. LEXIS 78053”

  1. Anonymous says:

    Good analysis. In this case, the claimant will be worse off had the attorneys done nothing to “protect Medicare’s interests.” An interests that didn’t need protecting in the first place because the claimant wasn’t a Medicare beneficairy. Regardless, Medicare will probably do nothing to monitor how the MSA Trusts will be administered, so whose interests have really been served/protected? Thanks for sharing! — Jim



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