Medical Liens After Fasso v. Doerr (12 N.Y.3d 80)
Fasso v. Doerr (12 N.Y.3d 80) decided by the Court of Appeal on February 24, 2009 will have a lasting effect on an insurer's equitable subrogation rights and will cause consternation in the lower courts as trial judges grapple with the resolution of health insurer's liens on personal injury settlements.

Insurers must determine whether a claimant is entitled to Medicare benefits and if so report information about the claim to Medicare before the settlement can be paid. Therefore, Defense Counsel and Claims professionals need to find out if there is a Medicare lien, as opposed to sitting back passively waiting for a lien notice.
A subrogation interest to any award given in a workers' compensation, medical malpractice or auto accident claim (both first and third party recoveries) exists under 42 USC 1395y(b)(2)(B)(iii).   Unlike many liens, notice is not required.

 

Under the statute, if the lien exceeds the amount of the recovery, Medicare recovers the entire lien, excluding only the lawyer fees and expenses. The United States Supreme Court decision in Arkansas v. Ahlborn, 126 S.Ct. 1752, 164 L.Ed.2d 459 (2006) held the federal Medicaid law would not support a claim by the State Agency to enforce liens against settlements which were attributable only to lost wages or pain and suffering. In Lugo v. Beth Israel Medical Center,  819 N.Y. S2d, 192, 13 Misc.3d 681 (2006), a medical malpractice action that was settled on behalf of the infant plaintiff for $3.5 million, the Department of Social Services (DSS), which asserted a lien against the settlement proceeds totaling $47,349.58 for Medicaid benefits provided to the infant plaintiff, was limited by the "anti-lien" provisions of the Medicaid law ( 42 USC § 1396a [a] [25] [H]) to recouping its lien only from that portion of the settlement proceeds allocated to past medical expenses. After Ahlborn, in New York "only the portion of the personal injury settlement or award specifically allocated to compensate the plaintiff Medicaid recipient for past medical expenses arising out of the personal injury is available to satisfy a 104-b lien." (See Office of Medicaid Management Memorandum GIS 06 MA/022; 9/14/06.)

 

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In the Matter of the Rehabilitation of Interboro Mutual Indemnity Insurance Company, Jason Tenenbaum prevailed on an issue in Supreme Court which could have had dire consequences for our client.  

The issue presented was whether Interboro would have to pay statutory no-fault interest for claims that preceded their entering Rehabilitation.  It was estimated that the potential cost savings to Interboro, as a result of this favorable appellate decision, was between $ 2 to $4 million.  By order of the Hon. Edward McCarty in 2004, Interboro was placed into Rehabilitation.  While in Rehabilitation, claims were handled in the normal and ordinary course of business.  Many of the so-called no-fault claims were resolved during this period. 

At some point, a group of investors sought to infuse capital into Interboro in an attempt to bring Interboro out of Rehabiliation.  The investors, when they analyzed the data, considered the debt-to -asset ratio.  In this regard, outstanding no-fault claims were considered, but not the penalty interest that accrues on outstanding no-fault claims in the amount of 2% per month, which was compounded for claims prior to 2003.  In fact, the Liquidation Bureau, Justice McCarty and the investors never considered this as an outstanding liability.
In 2007, Justice McCarty executed an order allowing Interboro to exit Rehabilitation.  Interboro became only the second insurance carrier in recent history to reorganize after Rehabilitation.  Historically, most insurance carriers will liquidate after entering Rehabilitation.

In 2007, a medical provider - Grand Central - in a civil court action - sought no-fault benefits in the amount of $10,000.  The dates of service were from 1999-2000.  Interboro never denied any of the bills.  It should be noted that although no-fault claims have a six year statute of limitation period, this period was extended three years for the time period Interboro was in Rehabilitation, since insureds and their assignees could not seek redress from Interboro while they were in Rehabilitation.

Grand Central moved for summary judgment on the outstanding bills.  Interboro did not have a defense and conceded liability.  The sole issue presented before Judge McCarty was how much interest Interboro would owe Grand Central.  Under the prevailing law, interest commences from the date a bill becomes overdue, should a denial not be issued.  In this case, that was in 1999.  The Court granted Grand Central summary judgment and directed that Interboro commence an action in Supreme Court to determine whether penalty interest was applicable to Interboro.  In the event penalty interest was applicable, then Grand Central would be given leave to enter judgment in the amount approximately $110,000.  This would be $10,000 in principle and $100,000 in interest.  There were many claims, similar to that of Grand Central, where the provider was seeking pre-rehabilitation interest.

 

Picciano & Scahill moved for an order seeking to modify the original order allowing Interboro out of Rehabilitation.  The amendment we sought was a declaration that no-fault penalty interest could not be assessed against claims that were adjusted prior to Interboro's exiting Rehabilitation.  Grand Central was named as an interested party in accordance with the Civil Court order.  Following extensive research and the presentation of our brief, Grand Central's brief and the Liquidation Bureau's brief, as amicus curae, the Court granted our motion.
 
In the Matter of St. Vincent Medical Care v. Mercury Casualty, Jason Tenenbaum won another appellate decision.  This case involved a motion for Summary Judgment denied by the lower court.  As required by law, our client denied the claim within the required time frame, stating that the medical services rendered were not necessary.  In opposition, Plaintiff submitted an affirmation executed by its principal, Dr. Zakharov.  P&S objected to the affirmation citing CPLR 2106.  Jason Tenenbaum argued that Dr. Zakharov's affirmation was improper because he is a principal of Plaintiff and a party to the action.  (See CPLR 2106, Samuel & Weininger v. Belovin & Franzblau, 5AD466 [2004]; Richard M. Gordon & Assoc., PC v Rascio, 12 Misc 3rd 131 [A] 2006 NY Slip Op 51055[U][App Term 2d & 11th Jud Dists 2006]; see also Pisacreta v. Minniti, 265 AD2d 540 [1999].    The appellate court agreed with us and ruled that Plaintiff failed to proffer any evidence in admissible form which raised an issue of fact (see Zuckerman v City of New York, 49 NY2d 557 [1980].    

Paul Duer took a Directed Verdict on the issue of Liability
This case arises out of a motor vehicle accident which occurred on January 21, 2006 on Mott Ave in Far Rockaway, NY.   Our insured, Sharon Pruitt, was proceeding on Mott Ave with her brother/plaintiff, Dion Pruitt in the front passenger seat.  A parked vehicle attempted to exit a parking space and struck Ms. Pruitt's vehicle along the passenger side doors.  At the completion of Plaintiff's case, Paul Duer moved for a directed verdict to dismiss Plaintiff's complaint as Plaintiff had failed to make out a prima facie case of negligence against Ms. Pruitt.  Queens County Judge Siegel agreed and the case against Sharon Pruitt was dismissed.

Robert Giovinazzi took a jury verdict in the matter of Elias v. Nogueira

This case involved a three car chain auto accident.  Our insured was the owner of the car driven by an employee, Pinto De-Oliveira.  He could not appear at trial because his visa expired and he returned to Brazil.  The Judge, satisfied with our efforts to locate the insured, allowed his deposition testimony to be read at trial - against objections.  The police officer who drafted the accident report testified that based upon her 20 years of experience, she felt our insured rear-ended the co-defendant pushing him into the Plaintiff.  Robert Giovinazzi argued that the police officer did not have independent recollection of the accident because she did not witness it.  After three hours of deliberation, the jury returned a verdict in our favor. 

A Major Defense Verdict for P&S in Talan v. Anderson
There were several factors against P&S in this case.  The Plaintiff's administrator was the son of the deceased and an attorney with good credibility.  He made for a formidable witness on his own behalf.  Plaintiff's mother, a passenger in the car, died six months after the auto accident.  She was hospitalized three times between the accident and death.  She also received treatment to the wounded left leg, which was injured in the accident.  However, the deceased, Shirley Talan, had a history of medical problems prior to the accident.  No autopsy was performed upon death.  Our medical expert concluded that the auto accident in no way contributed to the Plaintiff's death.  Plaintiff's medical expert argued that the auto accident was directly responsible for Ms. Talan's death.  After a long and difficult trial, the jury agreed with us and issued a defense verdict. 

 

Charles Mailloux Takes Two Defense Verdicts
Resto v. Boreland arises from an auto accident that occurred on February 16, 2006, in the parking lot of a Target store.  Plaintiff claimed neck and back injury as a result of the accident.  During trial and cross examination, Charles was able to point out discrepancies in Plaintiff's testimony, deposition and medical records.  The court charged the jury with determining if Plaintiff had sustained a serious injury.  The jury returned a unanimous 6-0 verdict in favor of the defendant finding that the Plaintiff did not sustain a serious injury.  Liability was not deliberated.    

 

Morel v. Beato arose from a two car motor vehicle accident in Manhattan.  The action of Morel v. Delacruz and Beato was joined for trial with the action of Beato v. Delacruz.  The issues of liability and damages were tried in both actions.  P&S were counsel in only the Morel v. Delacruz and Beato action.  In that action the jury returned a unanimous verdict in favor of our finding that the Plaintiff did not sustain a serious injury.  In the Beato v. Delacruz action, which was our client's action as a Plaintiff (she was represented by separate counsel for that action), the jury returned a verdict finding that Ms. Beato sustained a serious injury, and they awarded her $200,000.  The jury also deliberated liability and found unanimously that Co-Defendant Delacruz was 100% responsible for the accident.  
 
 

In the matter of Total Family Chiropractic Gustavo Pina v. State Farm, the treating doctor appeared at trial.  The trial was conducted on March 31, 2009 and pitted the treating doctor against the Independent Medical Examination report.   After a difficult trial, a verdict was rendered in favor of State Farm. Jason Tenenbaum from Picciano & Scahill defended this claim at trial.

 

Contact Frank Scahill, Managing Partner, at fscahill@psnylaw.com.