This post is an update on an earlier post concerning changes to the law of Medicaid subrogation in North Carolina. The earlier post can be seen here: Medicaid: “Ahlborn hearings” are back thanks to the 2018 federal budget which makes Medicaid provide lien reduction hearings again. But watch the deadlines!

Here is the short version of the history: In 2013 NC amended the law on Medicaid subrogation to allow for a reduction hearing to determine Medicaid’s final lien in a third party injury case. That law stood until October 1 of 2017 when a small change to the Federal law had the effect of making the NC statute inapplicable. In anticipation of the Federal change, NC lawmakers had inserted a law in the July 2017 state budget that said in essence, “if the federal changes happen on October 1, then our law changes to this…”. The new state law eliminated the reduction hearings and also eliminated Medicaid sharing prorata with valid medical lien holders. 

Then on February 9, 2018, the Federal Budget was passed and it retroactively repealed the changes that went into effect on October 1 in the federal law. In my opinion, this had the effect of essentially time traveling back to the last day of September, 2017 and making the October 1 federal changes never happen. Which means, of course, that the NC changes conditioned on the Federal changes, never happened either.

The end result is that as of February 8, 2018, the Medicaid lien law in NC was back to the statute that existed since 2013. Or at least that’s what i thought.

That leads me to now. I filed a declaratory judgment suit and motion to determine Medicaid lien in March of 2018 to request a Medicaid lien reduction under the 2013 NC law. In the Compliant I set out all of the changes described above and that the law of NC had “reverted” to the pre-October 1, 2018 law.

The State of North Carolina filed an Answer to the complaint an unequivocally Admitted all of the following allegations in the Complaint.

Long story short, my legal theory set out above is correct.

Below are the legal allegations in the Complaint.

Jurisdiction, Venue, and Governing Law

1. This Court has subject matter jurisdiction over this action pursuant to N.C. Gen. Stat. §7A-240 and §7A-243. This Court has personal jurisdiction in this matter pursuant to N.C. Gen. Stat. §1-75.4.
2. Venue is properly laid in this Court pursuant to N.C. Gen. Stat. §1-80 and §1-82.
3. That NCGS §108A-57 governs Medicaid lien recovery in North Carolina.
4. That NCGS §108A-57 was written, in part, to comply with the requirements set out in Wos v. E.M.A., __ U.S. __, 133 S. Ct. 1391, 1402 (2013) which affirmed that Arkansas Dept. of Health and Human Servs. v. Ahlborn, 547 U.S. 268, 284, 126 S. Ct. 1752 (2006) applied in North Carolina. Ahlborn established that the Department of Health and Human Services is prohibited from recovering “a portion of a Medicaid beneficiary’s tort judgment or settlement not designated as payments for medical care” because such recovery is barred by the federal Medicaid statute’s anti-lien provision, 42 U.S.C. § 1396p(a)(1).
5. That NCGS §108A-57(a2) provides a mechanism for a determination of the portion of the beneficiary’s gross recovery that represents compensation for the Medicaid claim and requires that an application for determining the lien under this subsection shall be filed with the court “no later than 30 days after the date that the settlement agreement is executed by all parties and, if required, approved by the court.”
6. That on October 1, 2017, NCGS §108A-57, was amended pursuant to NC Senate Bill 257. The amendment, which was conditioned upon changes to federal law going into effect the same day, said:
   
   “SECTION 11H.23. If Section 202(b) of the Bipartisan Budget Act of 2013, P.L. 113-67, takes effect on October 1, 2017, as provided in Section 202(c) of that act, as amended by Section 211 of the Protecting Access to Medicare Act of 2014, P.L. 113-93, and Section 220 of the Medicare Access and CHIP Reauthorization Act of 2015, P.L. 114-10, then G.S. 108A-57 reads as rewritten…”
   
7. On October 1, 2017, the changes to the federal law went into effect which triggered the changes to North Carolina law, eliminating procedure to request a court for the determination of a medicaid lien pursuant to NCGS §108A-57(a2).
8. On February 9, the United States Congress passed, and the President signed, H.R.1892 – Bipartisan Budget Act of 2018, which contained “SEC. 53102. THIRD PARTY LIABILITY IN MEDICAID AND CHIP”.
9. SEC. 53102 of H.R.1892, the Bipartisan Budget Act of 2018, repealed subsection (b) of section 202 of the Bipartisan Budget Act of 2013. The repeal stated that it “includ[es]any amendments made by such subsection” and the repeal “shall be applied and administered as if such amendments had never been enacted.”
10. The effect of all of these statutory changes on February 9, 2018 was that because the federal changes “had never been enacted” the changes to NCGS §108A-57 set out in NC Senate Bill 257 never took effect and the provisions of NCGS §108A-57(a2) allowing for judicial determination of Medicaid’s lien came back into existence on February 9, 2018.
11. That any matter settled between October 1, 2017 and February 9, 2018, could not apply for a lien determination during that time period and that NC DHHS properly refused to grant requests for reductions during that time frame.
12. That Plaintiff’s Workers’ Compensation case was approved for settlement in an Order of the Industrial Commission in IC. File No. Y26729 filed on January 24, 2018.
13. That upon the reinstatement of NCGS §108A-57(a2) on February 9, 2018, cases settled during the October 1, 2017 through February 9, 2018 period should have 30 days to file for hearings pursuant to NCGS §108A-57(a2) and that the first day they could request such hearing was February 9, 2018.
14. That Plaintiff in this matter has filed for this hearing pursuant to NCGS §108A-57(a2) within 30 days of February 9, 2018 and has satisfied the filing requirements of NCGS §108A-57(a2).

Again, all those allegations were ADMITTED by the State.

This should settle the question of what law applies now. I will also point out that the website for the General Assembly is still displaying the “new” (but incorrect) NCGS 108A-57. You can view the “old” (but now the current) NCGS 108A-57 in the body of the budget bill, Senate Bill 257 (2017) beginning at the very bottom of page 222 and continuing on to 223. All of the “repealed” portions in that Bill are now law again. Here is the link- go to page 222 or do a search for “subrogation” within the PDF. www.ncleg.net/Sessions/2017/Bills/Senate/PDF/S257v9.pdf

My firm is now taking in limited numbers of Medicaid reduction cases for other lawyers. Make sure you remember that you only have 30 days to file and serve your Motion to Reduce Medicaid lien beginning on the date that the client settles the case (signs the Release of Claims or a court approves a settlement).

Feel free to email me or call me if you have matter you think might qualify for a reduction. 

Chris Nichols
www.NicholsTrialLaw.com
Chris@NicholsTrialLaw.com

http://www.buchanandisability.com/helpful-resourcesandarticles/erisa-502c-actions/

Click SEND on the top of the form or attach to an email to me.

Chris Nichols

Trial: Priest joked about abusing 3 boys in week

By MARYCLAIRE DALE | Associated Press – 17 hrs ago

PHILADELPHIA (AP) — Jurors in a landmark priest-abuse trial heard Monday about a priest-turned-camp prowler and another who allegedly bragged about having sex with three boys in one week.

Also Monday, two jurors were replaced by alternates, but a gag order prevents lawyer from discussing the reasons for the move.

Monsignor William Lynn is on trial for child endangerment and conspiracy. Lynn, 61, is the first Roman Catholic church official in the U.S. charged for his handling of priest-abuse complaints. Prosecutors say he helped the church bury them in secret files, far from the prying eyes of investigators, civil attorneys and concerned Catholics.

In the day’s most startling testimony, a detective read internal church memos about a priest who allegedly “joked about how hard it was to have sex with three boys in one week.” His accuser also stated that the priest had a “rotation process” of boys spending time sleeping with him.

________________________________________

Interestingly, North Carolina has no Statute of Limitation for criminal cases involving this type of sexual assualt. Unfortunately, the general rule for civil cases is that the civil statute of limitations runs three years after the last date of sexual abuse. If the abused person is a minor, the statute of limitations would begin to run when the minor reaches age 18, and expire 3 years later on the minor’s birthday.

There is case law in NC for “recovered memory” cases, but the requirements for this exception to the statute of limitations on sexual abuse require expert testimony and almost a complete lack of awareness of the abuse until the memory was recovered.

For more information on sexual abuse cases in North Carolina, you can go to our Sexual Abuse Injury page.

Chris Nichols
www.Nicholstriallaw.com

The oral argument can be heard here: http://coop.ca4.uscourts.gov/OAarchive/mp3/10-1865-20111026.mp3#

Chris Nichols
www.NicholsTrialLaw.com

No comments from members.

He’s been sued, and a plaintiff.

Wife Joan. 5 children.

10 Yeats ago burned. Shows photos of her severe burns to her face and photos of slow recovery.

She does not want to relive these times

Learned three truths about med mal:

1. Genuine medical malpractice cases tepresnt the tip o the ice berg of mapractice
2. Very hard to even initiate a claim.
3. Med mal case is just drawn out war.

Current system is tilted toward providers and insurers.

New bill will tilt it even further and simply eliminate claims.

As a physician I know that mistakes happen and we need to be encouraged to be vigilant.

Lowering the standard of care impacts patient safety the wrong way.

I’m an advocate for patients. This bill does not prevent errors. Insulting to him to lower the standard of care to that of a lay person.

This concludes the speakers who will be speaking today.

He misrepresents the law

NC did away with the three part duty set up many years ago.

Overrides the common law.

I’ve brought one premises case in 17 years. This is not an issue in NC

Telling the story of her son Ethan, who dies because the ER misdiagnosed him with croup to death in 4 days.

Patients need to have safety on medical side. System is failing patients. Non-economic cap is failing the injured.

Has net bs spoke with J1 and has net with 20+ legislators.

The ER provision is a very dangerous provision. 1.5 million admissions to ER. Last year there were 481 malpractice suits filed. 15 of those suits are. ER sues.

1:20,0000 ER admissions results in malpractice claim.

This law closes the doors to valid claims that don’t happen often at all.

Back to her sons case. Who would pick up the life time of life support if he has lived? Me.

I’m a fiscal conservative, I’m a republican, and I have a hard time passing on the
Private mistakes to the public via bankruptcy and Medicaid.

Economic value. First heard of it from defense lawyer arguing with her lawyer “You know a 6 year old has no economic value”.

Child’s life would only be worth 250k. The costs o the case would make it impossible to get a lawyer to help.

Asks that patient safety not be partisan. Appeals to her fellow republicans.

The lie in that is that it only preservers cases where there has been misrepresentation by the manufacturer.

Sorry for all the typos. Doing this in iPhone with “autocorrect”. Ugh.

It was awesome.

Does NC want to be the only state in the nation where poisoned baby food is given amnesty?

Cites Michigan losing out on 80million on Vioxx settlements.

Now the guy from the manufacturers is speaking.

It’s a lot of “blah blah blah” about how the FDA works.

Now he’s bashing juries. They don’t have expertise, “beyond a juries capability to understand these cases”

The lobbyists think

1. Juries ate stupid and can not be trusted. Or rather, NC juries.
2. NC judges are giving special favors to plaintiff lawyers in attorney fee cases.

Any lawyer should be outraged by this.

Let me tell you a story. Williams sues Mast. Gets verdict of 62 dollars after a 500 offer.

This Atty fees statute allows for this.

Mary sues Carpenter. Jury says $132.94 but you lose, but your lawyer does not lose: Atty fees of $6000

Citing cases where lawyers get large fees based on loses.

He is failing to say that the law considers the the insurance company ought to make offers early, not late.

Asking to make the situation fair.

Says insurance companies are not lowballing. In fact insurance company is offering more than what is fair.

4.1 is a provision not to just hurt parties. Against his interest because it raises the amount to 15k.

Ought to raise the cap.

But if you ate gonna do that make it fair.

Make an unreasonable refusal to settle case. Says it is now unbridled discretion.

Suggests that judges are “doing their friends a favor”.

Explains bill v paid. No evidence of who pays bill.

New law puts in incurred expense and balance.

Switches responsibility from the prudent party to the innocent party.

This is confusing when you try a case.

This does not work in the real world. You font negotiate expenses with before trial.

It creates no jobs. Not broken, don’t fix

Collateral source bill.

You can’t introduce unto evidence payments made by another source.

Simple. Place responsibility on plaintiff. That’s wrong.

This bill ONLY changes one side. You will not hear information about the Defendnts insurance.

Last section: 6-21.1

Purpose: insurance company low balls you. Allows people to have a lawyer and go to court.

Suggest deleting 1.1. Delete 1.2 and

Jon Moore. Represbets Evan who was in car wreck

ER provides backbone of medicine. We should get the same laws as firemen and police men. (Also known as immunity- would the ER doctors accept their salaries as a trade off?)

EMTALA only covers ER and labor and delivery. But isn’t that what Dick Taylor said? He’s dodged the question that the ER Immunity provision is huge and covers a lot of medicine.

ER challenge by being “Stuck” with patients.

Says TX attached 850 new ER Docs

Gary Clemmons on 6-21.1 fees

Says NC needs Daubert Rule. To prevent juries from being deceived by junk science. Trial Judge has that role now.

Does not mention that Daubert standard creates huge cottage industry for defense lawyers and increases cost of litigation and cost to court system.

Giving prongs of Daubert standards.

Taylor has spoken with Rhyne about bootstrap immunizing all acute care with immunity.

Also concerned about all provisions related to tort reform.

1. Less protection to NC than any other state in nation on products liability.

Gives example of Arkansas tainted chicken sold in NC. Nc citizens would have no rights. Only state that way.

Brings up Michigan immunity but aus ours is way bigger.

Collateral source. Bill provides only information about the plaintiffs prudence in purchasing insurance.

Perhaps the lobbyists for multinational insurance companies think NC is the best state for the lowest protections. We think not.

Next up- Ken Kyre for NC defense lawyers and NC Chamber.

Duabert state.

Strict time limits.

Required to sign in.

Committee will not take questions.

First speaker Dick Taylor and Burton Craige.

John Locke Foundation has showed up too. Will the libertarians promote a bill that embraces FDA regulations to give immunity from suit?

The looks on their faces remind me if my child on Christmas morning. Will Santa come?

The gist of the majority opinion is that the majority interprets Ahlborn (which you will recall is a US Supreme Court decision) to say that NC Medicaid must have some mechanism to protect the injured party from giving ALL of their settlement or verdict to Medicaid. The majority goes on to say that NC’s 1/3 rule is just that stop gap measure and thus NC law is within the requirements of Ahlborn. 

Of course, the Ahlborn opinion actuallysays that Medicaid can only collect their prorata portion of a settlement as it relates to the medical bills Medicaid paid, but that was more or less ignored by our court. Ahlborn boils down to this: If the injured party collects 25% of the actual value of their case then EVERYONE, including Medicaid, should get 25% of what they are owed. All boats rise and fall with the incoming tide. Share and share a like. What’s good for the goose is good for the gander. You get it, right?

Well, the majority didn’t. 

They think that our “1/3 of the total settlement” cap on Medicaid recovery is the same thing as the Ahlborn “fair share” requirement. How? Well, because they said so, I guess. In fact, they not only said so, but implied that the Legislature “may have” intended the “cap” to work in this fashion, despite the fact that the cap was enacted YEARS before Ahlborn.

A simple example of impossibility:

Person in wreck has $200,000 of medical bills. Medicaid pays $100,000. The defendant only has $50,000 in insurance. What should Medicaid get, what should the client get?

Ahlborn Anlaysis:

1. What’s the case worth? At least $200,000, probably more like $500,000 plus, but of course we can’t know exactly. So let’s say $500,000.
2. Ratio of settlement to Value: $50,000 : $500,000 = 10%
3. Medicaid lien of $50,000 x 10% = $5,000 to Medicaid (the fair share)

Andrews Analysis:

1. What’s the case worth? Who cares!! In Andrews, ask, how much was the settlement? $50,000
2. What is 1/3 of the settlement? $50,000/3 = $16,666.66
3. Is Medicaid’s lien > 1/3? If yes, pay only 1/3. Medicaid will get $16,666.66 here.

My question: How can $16,666.66 and $5,000.00 BOTH comply with Ahlborn (the law of the land)?

ANSWER: They can’t, and the Minority opinion, written by Justice Hudson, points this out. I’ll discuss that in my next post.

CURRENT STATUS: Petition of Cert. to the Supreme Court of the United States has been filed.

So what should a (or this Raleigh) personal injury lawyer do with similar Medicaid issues right now? Well, I’d be in no rush to get them resolved in state court. I think our Superior Court Judges are stuck with Andrews right now. One might also consider going the Federal route. Or waiting for the US Supreme Court.

_____________

Nichols Law Firm
Chris Nichols

NC Supreme Court

Sam J. Ervin, IV – Court of Appeals (Tyson seat) www.ervinforcourtofappeals.com

North Carolina Court of Appeals

Jim Wynn – Court of Appeals www.judgewynn.com

Cheri Beasley – Court of Appeals (McCullough seat) www.judgecheribeasley.com

Linda Stephens – Court of Appeals www.judgelinda.org

John Martin – Court of Appeals (unopposed)

“DOWN TICKET” Candidates

Roy Cooper – Attorney General www.roycooper.com

Janet Cowell – State Treasurerwww.janetcowell.com

Elaine Marshall – Secretary of State www.elainemarshall.org

Wayne Goodwin – Insurance Commissioner www.waynegoodwin.org

Beth Wood – State Auditor www.bethwoodcampaign.com

Wake County Judicial Elections

Jacqueline L. Brewer (incumbent) District Court Judge

Anna Elena Worley,(open seat) District Court Judge

Christine Walczyk (incumbent) District Court Judge

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