An important MMSEA lawsuit we are tracking reached a milestone on May 5. In Patricia Haro, et al. v. Kathleen Sebelius, Secretary of U.S. DHHS, CV 09-134 TUC DCB the U.S. District Court Judge in Tucson granted class action status and an injunction enjoining CMS from demanding (1) claimants' attorneys withhold proceeds from their clients pending payment of disputed MSP reimbursement claims; and (2) reimbursement to MSP by the claimant who received settlement proceeds while there is a pending appeal or waiver request. A copy is attached.
The judge stated that the statute allows CMS to (1) collect double damages from a primary payer who settles directly with the claimant; and (2) collect from the beneficiary after resolution of all appeals and waiver requests. However, the judge ruled that CMS can only collect from the claimant's attorney (1) to the extent that the attorney is an "end-point recipient of settlement proceeds"; or (2) by suing to enforce an equitable lien.
Primary payers must be doubly cautious settling any case where the MSP claim is not specifically resolved and paid. If this ruling stands, the primary payer will be, by far, CMS's easiest target. Any agreement by the claimant's attorney to pay CMS will not be enforced by CMS. The statute only puts their contingency fee at risk.
This order and two earlier ones are posted below. If you have any questions or comments, please do not hesitate to contact us. We will continue to track this and other significant MMSEA litigation.
