Alabama Workers' Comp Blawg

  • 25
  • Mar
  • 2009

POSSIBLE DEFENSE ATTORNEY IMMUNITY TO CMS LIABILITY

Here is an update to ”http://www.alabamaworkerscompblawg.com/template_permalink.asp?id=118” a post made late last year about the Protocols v. Leavitt case. In this case a company and a law firm that provided consulting services for the settlement of workers’ compensation claims had brought a declaratory judgment action against the Secretary of the U. S. Department of Health and Human Services and the Administrator of Centers for Medicare and Medicaid Services (CMS) claiming that CMS’ sixth policy memorandum opinion misinterpreted the Medicare statute and regulations and exposed the plaintiffs to unexpected liabilities arising out of settlements they had previously structured. The U.S. District Court for the District of Colorado initially granted the defendants motion for summary judgment, but was subsequently reversed and remanded by the 10th Circuit Court of Appeals.

 
One issue that arose that was not previously discussed was Medicare Secondary Payer liability as it relates to workers’ compensation. In its opinion, the court notes that Third Party Vendor (Protocols) has exposure to Medicare by virtue of the fact that it “receives a fee” out of the WC settlement proceeds. This could be viewed as favorable analysis and language for use by defense attorneys. Under this analysis, if Medicare brought a claim against a defense attorney, the defense attorney would have no exposure to Medicare under the law as written because the defense attorney never receives or is paid out of any part of the “settlement proceeds.”  The settlement proceeds go from the insurer to the claimant/claimant’s attorney with out the defense attorney ever receiving any portion of those settlement proceeds. As such, the defense attorney should be immune from suit.
 
I will continue to monitor this case and post any new developments.

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