In an unpublished opinion out of Illinois, McKim v. Southern Illinois Hospital Services, the issue litigated was whether certain government benefit program liens (e.g., Medicare and Medicaid) were capped by state lien law. As expected, the court disagreed, finding that Federal preemption entitled governmental plans like Medicare, Medicaid and Part D to not be subject to limitations imposed by state law. This result reaffirms that parties must exercise due diligence in dealing with these matters before settlement to make certain there are no surprises. Even more important is for settling parties to understand whether a litigant is receiving benefits through Medicare and/or Medicaid. More importantly, this case points out raising such issue at the time of appeal may not work. See footnote 4; the opinion can be found here.

Franco Signor Commentary: Be proactive. Know your lien claims which may be both private, public and quasi-public. Negotiate these liens before settlement or have a plan on how to approach. Legal maneuvers may not necessarily carry the day and recognize that Federal laws such as the Medicare Secondary Payer Act will generally trump state laws which conflict with the Federal law’s purpose.

Roy A. Franco
Chief Client Officer
Franco Signor LLC

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