The U.S. Supreme Court has denied the petition for writ for certiorari in the Hadden v. United States case, marking the final chapter in perhaps the most watched Medicare Secondary Payer (MSP) court case in U.S. history. The issue in this case was whether Medicare is entitled to full reimbursement of its outlay under the MSP Act when a beneficiary compromises a personal injury claim, (as the 6th Circuit held in the Hadden case) or whether Medicare is entitled to only a proportional recovery (as held by the Eleventh Circuit). By refusing to hear this case, this conflict in the courts will not be resolved and confusion will remain the status quo in the MSP compliance industry.
The Facts of the Case
On a warm, August afternoon in 2004, Vernon Hadden was standing next to the traffic circle at the center of the small, historic town of Elkton, Kentucky. Mr. Hadden was severely injured when a service truck struck him as it swerved to avoid collision with a car that ran a stop sign. The car kept going and has never been identified. The company that owned the work truck agreed to settle for $125,000, which represented 10% of the value of the case. Medicare claimed that Mr. Hadden must make 100% reimbursement of their outlay (less attorneys fees), or $62,338, even though Mr. Hadden only received 10% of the value of his case. Mr. Hadden paid Medicare under protest, appealed to Medicare and lost, filed suit in U.S. District court and lost, appealed to U.S. Court of Appeals for the Sixth Circuit and lost, and finally petitioned the U.S. Supreme Court, which just denied his appeal.
It seems remarkably unfair that Mr. Hadden, who was seriously injured and received only 10% of the value of his case because the “at fault” driver left the scene, must reimburse Medicare for 100% of their outlay. After all, Medicare is his medical insurance plan he paid the premiums to that insurance plan on every paycheck during his working life. The Sixth Circuit’s decision, which now stands, was based on its interpretation of the word “responsible” in the statute. So, Mr. Hadden suffers again. This time his suffering is based on a vaguely worded statute, the meaning of which the courts cannot agree.
Perhaps the legislative branch of government should resolve this conflict by passing a bill that amends the MSP statute, allowing Medicare to only receive a proportionate recovery in cases like this where the injured person receives a reduced settlement.
Ironically, on the same day that the U.S. Supreme Court refused to hear the Hadden case, it agreed to hear a Medicaid case (Delia v. E.M.A.) that involves a very similar proportional recovery issue.
To view the Hadden petition for writ of certiorari, click here.
To view the U.S. Supreme Court docket for Hadden, click here.
To view the 4/12/2012 Medivest blog on Hadden petition filed with the U.S. Supreme Court, click here.
To view the 12/30/2011 Medivest blog regarding Hadden losing appeal to 6th Circuit, click here.
To view 11/2/2010 Medivest blog regarding Bradley and Hadden cases, click here.
To view the Delia v. E.M.A petition to the U.S. Supreme Court, click here.
To view the U.S. Supreme Court docket for Delia v. E.M.A, click here.