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Supreme Court Case: Gallardo v. Marstiller Oral Argument Analysis

Paul Loudenslager Paul R. Loudenslager, Esq., MSCC
Senior Lien Attorney
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A Certified Medicare Set-Aside Consultant, he focuses his practice on Medicare Advantage Plan, ERISA, and Medicaid liens, specifically, the litigation and resolution of these lien amounts in personal injury actions.
Yeganeh Gibson, Esq., CMSP
Lead Lien Attorney
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A Certified Medicare Secondary Payer Professional, Ms. Gibson serves as Precision Resolution’s Lead Lien Attorney, focusing on lien resolution in the areas of Medicare, Medicare Advantage and Medicaid.

On Monday, January 10th, the U.S. Supreme Court heard oral arguments in Gallardo v. Marstiller, on appeal from the 11th Circuit’s decision in Gallardo v. Dudek, 963 F.3d 1167 (11th Cir. 2020).

The central issue here is the extent of the state Medicaid agency’s right to place a lien for medical expenses on a Medicaid recipient’s personal injury recovery. Specifically, whether it is entitled to place a lien on the portion of the settlement that represents compensation for past medicals; or whether it can also satisfy its lien from the portion of the settlement that represents compensation for future medical expenses. The merits of the argument are hyper-technical, and rest upon a reading of several provisions of the Medicaid statute, most notably 42 U.S.C. §§ 1396a(25)(H) and 1396k.

But the ramifications of a potential decision here that would uphold the 11th Circuit’s decision allowing collection of the Medicaid lien from both the past and future medical components of the case are potentially far-reaching, and would substantially increase Medicaid’s ability to collect in some cases.

Of course, it is difficult to predict how the Court will rule based solely on oral argument. But here are our impressions of the proceedings.

 

Justices Breyer, Kagan, and Sotomayor got into the most substantive discussion about the merits of the case. Justice Breyer mentioned that the whole system is one that was created for the benefit of those who need it, i.e., the Medicaid recipients:

“[B]ecause we have a system that says don’t take any of their money. Then it says take some of the money for the past stuff you paid, but take it only from, they have money coming from a future guy, a victim, a tortfeasor for that, and then you have something say take an assignment.  So it seems to me you’re asking us to read these two provisions, higgledy-piggledy, slightly in conflict –if not direct conflict, at least hard to make consistent –and they’re asking you, the government, to read them consistently with the whole spirit of the thing, which is leave the money with the Medicaid victim.

Justice Sotomayor addressed the question directly to the Florida Attorney General, of why sue for medical expenses at all if Medicaid is involved.

“JUSTICE SOTOMAYOR: Does a beneficiary have to sue at all for past –I don’t see anywhere in here there’s an assignment to the state, there’s a

 subrogation by the state, but why should Medi –why should any of the recipients bother to sue for what you’re going to be paid -­ . . . if you’re going to take it all anyway?”

There really wasn’t much of an answer to this question. The implication here is a point that was brought up a couple of times throughout the course of the arguments, i.e., why doesn’t Medicaid actively protect its right to payment for medicals by becoming directly involved in the litigation and exercising a right of subrogation.

Chief Justice Roberts was silent for the majority of the proceedings; but tellingly this was his only question:  

“CHIEF JUSTICE ROBERTS: Counsel, does the state ever participate in the underlying litigation that gives rise to the judgment or the settlement?

WHITAKER: Well, certainly, Florida’s statute allows us that authority. In terms of our practice right now, my understanding is that we don’t do that, just -­just because it’s not cost-effective for it to do it that way, for us to –­

CHIEF JUSTICE ROBERTS: Well, maybe not in every one, but if you have sort of ones where the amounts will be significant, that would avoid the allocation hearings after the fact, and you could address those things in the structuring of the –of the settlement or the judgment, right?”

The answer was that the State does not take part in the underlying litigation, even in the largest cases. Because obviously it is much easier for them to do nothing and assert a lien.

Meanwhile, Justices Thomas, Gorsuch, and Barrett’s concerns were largely related to ancillary issues and not the merits of the actual arguments being made. And so it is difficult to determine whether they leaned one way or the other. Justice Alito was largely silent, and chimed in only once.

Finally, Justice Kavanaugh expressed concern with Medicaid spending, which in my opinion might as well be an overt declaration of intent to rule for the State of Florida. Indeed, the Florida Attorney General in his first sentence to the Court made that plea to any fiscally conservative members of the Court, stating: “To help keep Medicaid solvent, Congress made Medicaid the payer of last resort, meaning that other available resources should pay medical expenses before Medicaid pays.” Moreover, Justice Kavanaugh seemed to suggest that, if there is a discrepancy between provisions of the Medicaid statutes, the Court could look to the Medicare statute for guidance, which also doesn’t bode well for Ms. Gallardo.

Another interesting face was the federal government’s participation in this case. The United States appeared as amicus supporting the Petitioner Ms. Gallardo. Attorney Vivek Suri of the Solicitor General’s office argued, and I think boiled down the issue well into a few sentences. This is while discussing the issue of the state enforcing its right to medicals by actively participating in the underlying litigation, he argues: 

“But what the state is doing here is it’s not going after the tortfeasor. It’s going after the victim of the accident, and it’s seeking funds that don’t correspond to the things it paid for.”

We think that’s exactly what the anti-lien clause prevents the state from doing.

Ironically, the federal government, which is charged with enforcing the federal Medicaid Act, believed that Florida was in noncompliance with the federal Medicaid laws. Regardless, the federal government believed the proper remedy here was not to cut off Florida and fellow Floridian Medicaid recipients from federal funding for Florida’s noncompliance; but, rather, that it join the plaintiff in asking the United States Supreme Court to rule in Ms. Gallardo’s favor.

In all, it was an interesting discussion between the Justices and attorneys, but difficult to determine where several of the Justices stand on the merits.

We will continue to monitor this case for a decision, and will provide an update as soon as one is issued. In the meantime, Precision Resolution will continue to attack Medicaid liens utilizing the more restrictive interpretation that formed the basis of the Ahlborn decision, as well as our numerous other arguments that we use on a local level. Stay tuned.

Supreme Court Case: Gallardo v. Marstiller Oral Argument Analysis2022-01-20T15:43:22-05:00

What Should an Attorney do Regarding Liens, and When? | Best Practices Series

Q: In a perfect world, what should an attorney do and when, regarding liens. When should they involve Precision in that process?

By: Paul Isaac, Jr.  | Chief Operation Officer, Precision Resolution, LLC

A: For several reasons, an attorney should get Precision Resolution involved as early as possible.
Take Medicare, for example, the earlier that we are involved, the earlier we can eliminate overages, unrelated charges, and eliminate surprise demand amounts.

If you contact early, we can assess validity and exposure to give you a preemptive strategy as opposed to getting stuck with a long battle at the end of a case.

With full-service claim reporting and review processes, your firm can close your file with the confidence in knowing that all claims have been reported, liens have been reduced, and more money has been put into the plaintiff’s pocket at the end of the case.

Precision offers solutions for firms of every size; we’re helping attorneys across the country advance their practice by serving as the trusted outsourcing solution for lien reporting and resolution.

What Should an Attorney do Regarding Liens, and When? | Best Practices Series2021-12-02T16:59:46-05:00

When to Inquire About Liens with Insurance Companies | Best Practices Series

By: Yeganeh Gibson, Esq. CMSP | Lead Lien Attorney, Precision Resolution, LLC

Q: At what point during a case can you inquire about liens with the client’s medical insurance companies?

A: We advise all of our attorney clients to put private and government medical insurance providers on notice of the liability action as early as possible. Whether you outsource lien reporting to an agency like Precision or handle it internally, it is imperative that you know who paid for your client’s treatment and whether or not they are asserting a lien early in the case.

Further, we recommend you request updated lien amounts from these agencies every 90 days, at a minimum, for the life of the case. Then, at the time of settlement, report the gross settlement and other figures to these agencies so that you know the final payoff number and can accurately compile your settlement statement for your client to sign off on.

The only gray area here relates to New York Medicaid.

In New York, if Medicaid asserts a lien against a personal injury claim, it must also comply with the provision of the New York State Social Services Law §104-b,which includes proper written notice to the Medicaid beneficiary. However, 104-b also states that the injured party must serve “notice of the commencement of a [personal injury action] upon the public welfare district that has provided or is providing such assistance and care, or upon the department of health. ”It is a bit of a chicken and the egg scenario and is best assessed on a case-specific basis.

When to Inquire About Liens with Insurance Companies | Best Practices Series2021-11-18T09:36:40-05:00

Settlement Protection Plans

Settlement Protection Plans

By: Paul Isaac, Jr.  | Chief Operation Officer, Precision Resolution, LLC

As we wait for a date the Supreme Court to hear arguments in Gallardo v. Marstiller and the ruling’s impact on Medicaid lien recovery expansion (complete breakdown here), it is important to note a few things about personal injury cases involving Medicaid eligible individuals.

First, as far as we at Precision Resolution are concerned, Ahlborn is still the law of the land. Since the Bipartisan Budget Act of 2018 “revived” the cases’ application, our firm has dug deep into dozens of cases, leveraging Ahlborn-based arguments, to secure millions of dollars in Medicaid lien reductions and eliminations in cases across the country.

These reductions go a long way in putting more settlement dollars back into plaintiffs’ pockets at the end of the case so that they can use the funds for the treatments, services, and lifestyle that they will depend on.

That is why we believe it is critical -not only in cases with Medicaid-eligible beneficiary plaintiffs or family members – but in every case, to allow the plaintiff to establish a settlement protection and preservation plan.

These plans do not always involve structured settlements, trusts, or intricate asset and legacy preservation strategies. Sometimes it is just useful for plaintiffs to seek guidance from an advisor who can assist them in establishing a post-settlement budget and spending plan.

But in complex cases, where Medicaid benefits will be relied upon to preserve future services, proper planning is essential. That is why Precision Resolution and our sister company, Paramount settlement Planning, are staffed with three Chartered Special Needs Consultant® (ChSNC) attorneys.

This unique designation allows us to build plans that anticipate a plaintiff’s future needs.  We make certain that the settlement of the case does not disqualify them or anyone in their household from the government benefits that they depend on. 

This comprehensive approach to planning makes certain that the plaintiff is maximizing the settlement amount through the reduction of any liens, while making certain that those funds and necessary government benefits are protected.

Settlement Protection Plans2021-11-02T10:22:48-04:00

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