Whose Money Is It? – Medicare Liens in Florida Wrongful Death Cases

dollars.jpgIn Florida, a claim for wrongful death is brought by a court-appointed personal representative on behalf of the decedent’s estate and survivors. Florida’s Wrongful Death Act (FWDA) (Florida Statute Sections 768.16-768.26) outlines the specific damages recoverable by the estate and the survivors (e.g., surviving spouse and children).

Many wrongful death victims receive medical care for the injuries that have caused them to die. Frequently, Medicare pays those medical expenses.

In 1980, Congress enacted the Medicare Secondary Payer Act. The Act authorized the secretary of the Department of Health and Human Services to seek reimbursement for medical expenses incurred on behalf of wrongful death victims. One of the policies employed was to seek reimbursements from the property of wrongful death survivors who have no obligation or other connection to Medicare. This was always wrong, but it took a federal court to make the secretary understand.

Cases brought under the FWDA are resolved in favor of the estate and survivors in one of three ways: (1) pre-lawsult settlement; (2) settlement during suit; or (3) jury verdict rendered to a final judgment. When a case is settled, the personal representative is responsible for allocating the settlement proceeds between the estate and the survivors. In many instances, the estate is left with only a tiny portion of the overall recovery.

Until September 29, 2010, the secretary of the Department of Health and Human Services gave little regard to the allocations made under alternatives (1) and (2). The only allocations respected by the secretary were those made by a jury, alternative (3). Backed by the federal government, the secretary would muscle reimbursements from allocations made to survivors under options (1) and (2), even when the allocations are approved by a probate court judge. This was unacceptable to the personal representative and survivors in Bradley v. Sebelius, 621 F.3d 1330, 2010 WL 3769132 (11th Cir. 2010), who challenged the secretary’s practice of ignoring allocations made by personal representatives and approved by probate courts.

In Bradley, a gentleman named Burke developed bed sores in a nursing home. He was admitted to a Gainesville, Florida hospital where he died three months later from organ failure secondary to sepsis and wound infection. During his hospital stay, the secrtary of the Department of Health and Human Services paid $38,875.08 in medical care through the Medicare program.

One of Burke’s surviving children, Carvondella Bradley, was appointed personal representative. She made a wrongful death claim against the nursing home on behalf of her father’s estate and survivors (she and her siblings). The case settled pre-suit for $52,500, the available insurance policy limits. Bradley allocated the proceeds among the siblings and the estate. The secretary opposed the allocation and demanded reimbursement in the amount of $38,875.08. Bradley responded by seeking approval of the allocation from a Florida probate judge. The secretary was notified of the hearing, at which the judge received evidence regarding the value of the survivors’ and the estate’s claims. He approved the personal representative’s allocation, awarding $787.50, or 1.5 percent of the total settlement to the estate. The secretary brushed off the judge’s findings, taking the position that federal law trumped state law. Appeals followed. After a lengthy legal battle in numerous forums, personal representative Bradley prevailed.

The 11th Circuit Court concluded that the claim of the estate is separate from the claims of the survivors. It decided that all loss of consortium or companionship recoveries are the property of the person of the person who incurred the loss, that a child’s loss of parential companionship claim is a property right belonging to the child. The child’s claims do not include the decedent’s medical expenses, as a claim for medical expenses belongs on to the estate. The federal appellate court approved the state probate judge’s allocation of $787.50 to Medicare.

Bradley is a huge case. No longer may the secretary of the Department of Health and Human Services act without regard to the decisions of personal representatives and state court judges. It should help bring disputed claims to a quick and fair conclusion.

The decision will also be persuasive with regard to Medicaid liens – see, also, Ark. Dept. of Health & Human Services v. Ahlborn, 126 S. Ct. 1752 (U.S. 2006), which limits the right of recovery by Medicaid agencies to the portion of the Medicaid recipient’s settlement representing past medical expenses and cannot be extended to other portions of the settlement which represent a Medicaid recipient’s unassigned private property – and Medicare HMO liens.
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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.

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