District of Columbia v. Jackson

KELLY, Associate Judge,

concurring as to reversal:

I would reverse on the basis of the District’s alternative argument, i.e., that the trial court erred in refusing to grant a credit against the judgment for the medical bills paid or to be paid by Medicaid. Specifically, the District claims that in the present context provisions of the federal Medicaid Statute, 42 U.S.C. § 1396a(a)(25) (1974), and regulations, 42 C.F.R. § 433.136 (3) (1980), require recovery of Medicaid funds where a tortfeasor is liable for the expense of medical care given a Medicaid recipient.

The Medicaid program, 42 U.S.C. §§ 1396 et seq. (1965), was enacted by Congress as an amendment to the Social Security Act. Medicaid provides free medical care in the form of public assistance to persons whose indigency qualifies them for receipt of such benefits. The costs of providing free care are divided between the federal government and participating states or the District of Columbia. Each state which chooses to have a Medicaid program is responsible for administering its own program under a state plan which conforms to federal requirements and has been approved by federal officials. See id. §§ 1396, 1396a. In 1967, Congress gave local authorization for the District of Columbia to develop a conforming plan. D.C.Code 1973, § 1-266, and in June of 1968, the Secretary of HEW approved the plan submitted by the District.

42 U.S.C. § 1396a(a)(25) (1974) provides: (a) A State plan for medical assistance must—

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(25) provide (A) that the State or local agency administering such plan will take all reasonable measures to ascertain the legal liability of third parties to pay for care and services (available under the plan) arising out of injury, disease, or disability, (B) that where the State or local agency knows that a third party has such a legal liability such agency will treat such legal liability as a resource of the individual on whose behalf the care and services are made available for purposes of paragraph (17)(B), and (C) that in any case where such a legal liability is found to exist after medical assistance has been made available on behalf of the individual, the State or local agency will seek reimbursement for such assistance to the extent of such legal liability . . . .[ 1 ]

This provision requires the states to obtain reimbursement for Medicaid payments provided to victims of negligence or other torts, where it is determined that a third *876 party is liable for the victims’ medical expenses. 2 When collected, reimbursements representing third party liability are distributed to the federal government and to the state in accordance with their contributions. 42 C.F.R. § 433.154 . Failure to seek reimbursement leads to the elimination of federal funds. 42 C.F.R. §§ 433.138 , -.139, -.140(a)(1). 3

42 C.F.R. § 433.136 defines “third party” as “any individual, entity or program that is or may be liable to pay all or part of the medical cost of injury, disease, or disability of an applicant or recipient.” In this case the District is an “entity ... that is liable to pay all or part of the medical cost” of appellees. Therefore, the District falls within the definition of “third party” in the circumstances here. Accordingly, the District must seek reimbursement, and appel-lees are not permitted a double recovery.

Appellees argue that the District is not a “third party” within the meaning of the statute and they should therefore be permitted to keep any amounts recovered which might represent Medicaid payments. I disagree. If appellees’ interpretation were correct, there would be an anomalous result: District Medicaid recipients would get a double recovery in instances where, fortuitously, the District was the tortfeasor; they would receive no double recovery if another party were the tortfeasor. By requiring states to seek reimbursement or face loss of federal Medicaid funds, Congress intended to reduce the costs of Medicaid. Permitting appellees to keep the portion of the judgment which represents expenses already paid by Medicaid is contrary to that intent. The federal statute mandates that the District receive a credit on *877 the judgment for medical expenses paid by-Medicaid.

I do agree that Medicaid is not a collateral source and that under the majority’s theory of reversal the District is likewise entitled to a credit for all bills paid by Medicaid. Were I to join that decision, however, I would not remand for a new trial on damages. According to the stipulation, the court allocated the medical expenses proved between the two causes of action. The amount of the verdicts exceeded those expenses by a comfortable margin. It seems to me unjust to fault the District for failing to request a special verdict in view of its repeated objection to the submission of the medical bills in evidence, and the appellees’ insistence that the bills be introduced and the question of a setoff be decided by the court post-verdict. 4 The case should be remanded with instructions to reduce the verdicts by the amounts of the Medicaid payments.

. 42 U.S.C. § 1396a(a)(25) was modified in 1981. It now provides:

(a) A State plan for medical assistance must—

(25) provide (A) that the State or local agency administering such plan will take all reasonable measures to ascertain the legal liability of third parties to pay for care and services (available under the plan) arising out of injury, disease, or disability, (B) that where the State or local agency knows that a third party has such a legal liability such agency will treat such legal liability as a resource of the individual on whose behalf the care and services are made available for purposes of paragraph (17)(B), and (C) that in any case where such a legal liability is found to exist after medical assistance has been made available on behalf of the individual and where the amount of reimbursement the State can reasonably expect to recover exceeds the costs of such recovery, the State or local agency will seek reimbursement for such assistance to the extent of such legal liability.

. The legislative history of § 1396a(a)(25) (1974) makes it clear that Congress intended that states actively seek reimbursement. E.g., S.Rep. No. 744, 90th Cong., 1st Sess. 35, U.S. Code Cong. & Admin.News 1967, p. 2834 (Nov. 14, 1967) (“States would have to take steps to assure that the medical expenses of a person covered under the Medicaid program, which a third party had a legal obligation to pay, would not be paid, or if liability is later determined, that steps would be taken to secure reimbursement in order to reduce program costs.”). See also H.R.Rep. No. 544, 90th Cong., 1st Sess. 123 (Aug. 7, 1967).

. 42 C.F.R. § 433.138 Determining liability of third parties, provides:

The agency must take reasonable measures to determine the legal liability of third parties to pay for services under the plan.

42 C.F.R. § 433.139 Payment of claims, provides:

(a)The agency has the following options for payment of claims:

(1) It may pay the amount remaining, under the agency’s payment schedule, after the amount of the third party’s liability has been established. Under this method, the agency may not withhold payment for services provided to a recipient if third party liability or the amount of liability cannot be currently established or is not currently available to pay the recipient’s medical expense.

(2) It may pay the full amount allowed under the agency’s payment schedule for the claim and seek reimbursement from any liable third party to the limit of legal liability. If the agency chooses this option, it must seek reimbursement from the third party within 30 days after the end of the month in which payment is made.

(b) If, after a claim is paid, the agency learns of the existence of a liable third party, it must seek reimbursement from the third party within 30 days after the end of the month it learned of the existence of the liable third party.

(c) An agency must suspend or terminate an effort to seek reimbursement from a liable third party if it determines that the effort would not be cost effective because the amount it reasonably expects to recover will be less than the cost of recovery. The State plan must—

(1)(i) Specify the threshold amount or other guideline that the agency uses in determining whether to seek reimbursement from a liable third party; or

(ii) Describe the process by which the agency determines that seeking reimbursement would not be cost effective; and

(2) Specify a dollar amount or period of time for which it will accumulate billings with respect to a particular liable third party, in making the decision whether to seek recovery.

42 C.F.R. § 433.140 FFP [Federal Financial Participation] and repayment of Federal share, provides:

(a) FFP is not available in Medicaid payments if—

(1) The agency failed to fulfill the requirements of §§ 433.138 and 433.139 with regard to establishing liability and seeking reimbursement from a third party ....

. Appellees, of course, also insisted that the medical expenses resulted from the injuries the decedent sustained in the assault.