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Medicare Reined in by a True "Haro"

Gavel_iStock_000015518511XSmall1A huge win for injured individuals, as well as their lawyers, is a rather complex and mind-numbing decision that came down recently in the case of Haro v. Sebelius, No. CV 09-134, TUC DUB, United States District Court D. Arizona, May 5, 2011.

To explain this decision in a fairly simple way, this means that people with injury settlements where they were waiting for Medicare to come up with a conditional payment and final demand letter do not have to be in limbo anymore.

Let's begin by explaining the backbone of the Medicare Secondary Payer Recovery Contractor statute and rationale. More information than you would ever want to know about this can be found on the MSPRC website. Essentially, the law says that anytime Medicare reasonably believes that payment for medical services has been made or reasonably will be made by another entity, such as auto insurance or workers' compensation, Medicare cannot pay these expenses and, most importantly, Medicare can and should expect to be reimbursed for the monies it has paid out for these services.

What this means for injured persons who are either receiving Medicare or will become eligible to do so in the near future, is that they and their attorneys must go through an extremely convoluted and frustrating process in order to determine just exactly what they owe in "reimbursement" and when. In short, attorneys and their clients had been found by courts to be personally liable for failing to honor MSPRC's automatic lien on these cases.

This is where the Haro decision enters into the equation. There, a group of injured persons and the lawyers representing them, filed suit to have the court determine whether it was valid for MSPRC to require attorneys and their clients to issue payment in advance for amounts that had yet to be determined finally and whether they could hold attorneys personally liable for failing to do this. Granted, this is the simplified version of the case. If you have not yet nodded off and are fiercely interested, I suggest you read the entire decision of Haro v. Sebelius, No. CV 09-134, TUC DUB, United States District Court D. Arizona, May 5, 2011.

The good news is that the court in this case decided firmly and emphatically that: 1. The Secretary of Health and Human Services had no authority to require the advance payment and 2. That there was no authority to hold lawyers personally liable for failing to do this.

In fact, I couldn't say it any better than the court did in its own words:

IT IS FURTHER ORDERED that Defendant's demand for payment of her MSP reimbursement claims, under threat of collection actions before there has been a resolution of an appeal regarding the amount of the Defendant's MSP claim or a waiver request, exceeds her authority under the Medicare statute, and Defendant is enjoined from demanding payment of a MSP reimbursement claim with threats of commencing collection actions before there is a resolution of an appeal or waiver request.

IT IS FURTHER ORDERED that the Defendant's demand that attorneys withhold liability proceeds from clients pending payment of amounts claimed by the Defendant as MSP reimbursement exceeds her authority under the Medicare statute, and Defendant is enjoined from demanding that attorneys withhold liability proceeds from their clients pending payment of disputed MSP reimbursement claims.

What all this means for injured people and the lawyers who represent them is that things will move a lot faster (we hope) at MSPRC and that settlement monies can be distributed sooner. It may not seem very exciting but it had a pervasive effect on many injured people and their lawyers by making MSPRC move a bit faster in determining final amounts and taking the heat off lawyers just a bit.

If you have any questions about how Medicare could affect you or any potential injury case you may have, please feel free to contact us.

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