Medicare Secondary Payer – The Next Big Cash Cow for Trial Lawyers?

From former Attorney General Ed Meese and Hans Spakovsky of the Heritage Foundation, a good summary of the complicated Medicare Secondary Payer issue, subrogation and qui tam litigation. The House Ways and Means Committee recently considered — and ultimately did not pass – an amendment that would have opened wide the gates for bounty-hunting attorneys to file suit supposedly to reclaim Medicare money but really just to achieve big settlements. And they wouldn’t have to prove actual harm, but make their claims solely based on statistical data.

From The Trial Lawyers’ Earmark: Using Medicare to Finance the Lifestyles of the Rich and Infamous

In one of the starkest examples of how plaintiffs’ lawyers want to use Congress to get rich at the expense of the American taxpayer, an amendment that would have generated abusive Medicare litigation on a massive scale–along with the usual huge attorneys’ fees–was recently added to [and then removed from] the health care reform bill in the U.S. House of Representatives.  The current Medicare statute simply ensures that Medicare is reimbursed for the medical benefits it pays when a third party is legally responsible for a Medicare beneficiary’s injuries or medical costs. However, the tort lawyer amendment would:

  • Allow new types of lawsuits against the makers of consumer products (including food) for supposed injuries to Medicare beneficiaries based on questionable statistical speculation;
  • Flood the federal courts with lawsuits that circumvent state tort law and federal requirements for class action lawsuits, diversity jurisdiction, or amount in controversy;
  • Violate the privacy of Medicare beneficiaries by making their medical records available to tort lawyers without their permission (or that of the government);
  • Interfere with the rights of beneficiaries against third parties responsible for their medical costs; and
  • Improperly and unwisely turn the Medicare reimbursement provision into a qui tam statute that would allow plaintiffs’ lawyers to pursue claims that Medicare does not think are valid or proper, reducing the availability of medical treatment for Medicare beneficiaries.

Walter Olson of the Manhattan Institute first blew the whistle on this jaw-dropping effort to include special interest legislation in the health care bill. See his column in Forbes, “Inside the Health Care Bill.

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