Hadden v. United States
2011 U.S. App. LEXIS 23289
| 6th Cir. | 2011Background
- Hadden is a Medicare beneficiary injured in Kentucky; medical bills totaled $82,036.17.
- Medicare paid the bills in full; Pennyrile Rural Electric Cooperative settled with Hadden for $125,000.
- Medicare seeks reimbursement when the third party settles; Hadden escrowed $62,000 for reimbursement.
- Medicare demanded $62,338.07 after subtracting Hadden's attorney fees; Hadden paid under protest claiming only $8,000 was due.
- District court and Appeals Council ruled Hadden must reimburse the full amount; Hadden challenged the decision.
- Issue centers on whether § 1395y(b)(2)(B)(ii) requires full reimbursement or a proportionate amount.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does 'responsibility' in § 1395y(b)(2)(B)(ii) require full reimbursement? | Hadden argues Pennyrile's 10% liability limits reimbursement. | Medicare argues 'responsibility' as defined by 2003 amendments imposes full recovery. | Full reimbursement required |
| Does the 2003 amendment define 'responsibility' for purposes of § 1395y(b)(2)(B)(ii)? | Amendment is not explicit about amount, so proportionate share could apply. | Amendment defines 'responsibility' to include settlements/releases showing liability, supporting full reimbursement. | Amendment defines 'responsibility' broadly; supports full reimbursement |
| Can the government enforce its right to reimbursement under § 1395y(b)(2)(B)(iii) rather than (iv)? | Only subrogation under (iv) would allow enforcement, not (iii). | Rights exist under (iii) independently of (iv) subrogation. | Enforcement under (iii) exists; separate and independent from (iv) |
| Should the Secretary waive reimbursement under 42 U.S.C. § 1395gg(c) on equity grounds? | Waiver due to undue hardship or inequity possible. | Council considered factors; denial of waiver appropriate given evidence. | No waiver; denial sustained |
Key Cases Cited
- Zinman v. Shalala, 67 F.3d 841 (9th Cir. 1995) (upheld full reimbursement as reasonable construction of statute)
- Arkansas Dept. of Health & Human Servs. v. Ahlborn, 547 U.S. 268 (Supreme Court 2006) (limits Medicaid recovery based on liability and allocated medical costs)
- Bio-Medical Applications of Tennessee, Inc. v. Central States Southeast & Southwest Areas Health & Welfare Fund, 656 F.3d 277 (6th Cir. 2011) (discussed 'demonstrated responsibility' concept and MSP context)
- Christensen v. Harris County, 529 U.S. 576 (2000) (agency interpretations lacking force of law receive Skidmore deference)
- Arkansas Dept. of Health & Human Servs. v. Ahlborn, 547 U.S. 268 (Supreme Court 2006) (reiterated in-context discussion of Medicaid lien and settlement allocation)