In Bradley v. Sebelius, the Eleventh Circuit Court of Appeals determined the interplay between the Florida Wrongful Death Act (FWDA) and the federal Medicare Secondary Payer Act. Under Florida law, in a recovery for wrongful death action, children may recover for lost parental companionship, instruction, and guidance and for mental pain and suffering from the date of injury. Fla. Sta. § 768.21(3). It is a well-settled principle under Florida law that proceeds from a wrongful death action are not for the benefit of the estate, rather, they are the property of the survivors and compensation for their loss.
In Bradley, the decedent was hospitalized for three months for injuries resulting from the negligence of the nursing home of which he was a resident. Medicare paid $38,875.08 for the decedent’s medical care during his hospital stay. Without filing suit, Carvondella Bradley, the personal representative of decedent’s estate, settled a wrongful death claim for $52,000, the full amount of the nursing home’s liability insurance policy limits. Bradley notified the Centers for Medicare and Medicaid Services (CMS) of the settlement proceeds and associated legal fees and costs. CMS refused to recognize that the medical expense claim had been settled for less than 100%, claiming that Medicare had the authority to claim the total amount of medical expenses, $38,875.00, less procurement costs, or a net amount of $22,480.89.
Bradley filed an application with the probate court to adjudicate the rights of the estate and the rights of the children with respect to the settlement. Bradley notified Medicare of the probate court proceedings, but Medicare refused to appear or participate. The state probate court ordered that Medicare could recover $787.50, after determining the total value of the claims of the decedent’s surviving children.
Medicare refused to accept the probate court’s determination, contending that the court’s decision was advisory in nature and/or superseded by federal law. Relying on language contained in its field manual, Medicare refused to recognize the probate court’s allocation of liability payments to non-medical losses unless and until payment was based on a court order issued on the merits of the controversy. The surviving children appealed Medicare’s final decision to district court. The district court, also relying heavily on the language contained in the Medicare field manual, determined that Medicare was entitled to the reimbursement of $22,480.89, not $787.50, for conditional medical expense payments made on behalf of the decedent.
The Court of Appeals reversed the district court, holding that Medicare was only entitled to the sum of $787.50, as determined by the allocation of the probate court. The Court recognized that the $52,000 settlement consisted of medical expenses and costs recovered by the estate (subject to the Medicare Secondary Payer Act) and non-medical, tort property claims of the surviving children (not subject to the Medicare Secondary Payer Act) and concluded that Medicare was not entitled to any share of the surviving children’s claim. The Court held that the district court’s reliance on the Medicare field manual was misplaced. Further, the Court noted that Medicare’s position would have a “chilling effect on settlement” by “compelling plaintiffs to force their tort claims to trial, burdening the court system.”
In a dissenting opinion, Judge Martin stated that she would have affirmed the district court’s decision because the district court’s reliance on the Medicare field manual was not arbitrary, capricious, or an abuse of discretion.
Date of Decision: September 29, 2010
0 Response to “MEDICARE NOT ENTITLED TO RECOVER FULL AMOUNT OF ITS LIEN FROM TORT RECOVERY IN FLORIDA WRONGFUL DEATH ACTION”