Archive for November, 2010

Statutes of Limitation for Claims by the Federal Government

On September 30, 2010, the United States District Court for the Northern District of Alabama issued an order in U.S. v. Stricker, CV 09-BE-2423-E (N.D. Ala., Dec. 1, 2009) establishing applicable statutes of limitation for claims for reimbursement by the government pursuant to the Medicare Secondary Payer Act (“MSP”). In this case, the government sought reimbursement from multiple corporate defendants, insurance companies and plaintiffs’ counsel based on a global settlement for $300 million of two consolidated class action cases. It appears this is the first time that the government has sued multiple plaintiffs’ counsel for recovery under the MSP.

As previously reported on our website, the MSP makes Medicare a secondary payer when a beneficiary has other insurance or a tort settlement that does or can pay for their medical expenses. (Medicare Set-Asides in Liability Settlements) Therefore, any recipient of a payment that qualifies as reimbursable to Medicare based on the language of the MSP must reimburse Medicare in accordance with the statute and related rules. If such reimbursement is not made in a timely matter, the government may file a lawsuit against a primary payer seeking such recovery. However, the MSP does not address the deadline for the government to file its claim for recovery.
In Stricker, the parties agreed that the relevant statutes of limitation for the government’s claims were controlled by the Federal Claims Collection Act (FCCA). However, they disputed whether the FCCA established a three (3) or six (6) year statute of limitations. The FCCA provides a three (3) year statute of limitations for a tort action and a six (6) year statute of limitations for a contract action. The Court held that because the government’s MSP claims against the corporate defendants were founded on the alleged tortious activity of those defendants and the resulting settlement, its claims against them were subject to a three (3) year statute of limitations. However, because the plaintiffs’ attorneys’ relationship with the plaintiffs was contractual in nature, the six (6) year statute of limitations applied to the federal government’s claims against the Plaintiffs.

The Court also held that a settlement beneficiary’s responsibility to reimburse Medicare pursuant to the Medicare Secondary Payer Act arises no later than when the settlement is executed and approved by the court. In doing so, the Court rejected the argument that the reimbursement obligation begins when payment is distributed. The Court explained that the MSP clearly establishes that the federal government can assert its claim to reimbursement as soon as payment is made or could be made. This ruling is critical in establishing the starting point of the calculation of the statute of limitations for claim(s) by the federal government regarding reimbursement pursuant to the MSP.

For more information, please contact Timothy Buckley III, Esq. at (404) 633-9230.


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