New Medicare and Medicaid Self-Calculated Final Conditional Payment Amount Option

As many of us who practice personal injury law know, the new Medicare and Medicaid laws regarding subrogation interests for a personal injury settlement are time consuming and strenuous to deal with. Many consider these laws draconian in nature because of the harsh penalties that can be handed down on the injured victims and their representatives for even minor mistakes or omissions. In practice, clients want to know why it is taking so long for the release of their settlement funds and become frustrated at us because the government is holding up the process. Even when a case is in an MDL and the attorney has the benefit of a special master and an ombudsman to help, the process is still daunting. However, it looks like there are some new mechanisms on the horizon that will hopefully help alleviate this process for everyone.

The Centers for Medicare & Medicaid Services (CMS) will be implementing an option that will allow certain Medicare beneficiaries to obtain Medicare's final conditional payment amount prior to settlement. This option is scheduled to be available in February 2012, for certain settlements involving physical trauma based injuries where treatment has been completed. Under this option, the beneficiary or his representative will calculate the amount of Medicare's conditional payment amount using information received from the Medicare Secondary Payer Recovery Contractor (MSPRC), the MyMedicare website, or other claims information available to the beneficiary. The MSPRC will review this amount and, if finding the amount accurate, will respond with Medicare's final conditional payment amount within 60 days. To secure the final conditional payment amount, the beneficiary must settle within 60 days after the date of Medicare's response.

In order to use this option, ALL of the following criteria must be met:

1. The liability insurance (including self-insurance) settlement will be for a physical trauma based injury (the settlement does not relate to ingestion, exposure, or medical implant- basically disqualifying this option for almost all mass torts cases);
2. The total liability settlement, judgment, award, or other payment will be $25,000 or less;
3. The Date of Incident occurred at least six months before the beneficiary or his representative submits his proposed conditional payment amount to Medicare;
4. The beneficiary demonstrates that treatment has been completed and no further treatment is expected either through a written physician attestation or by certifying in writing that no medical treatment related to the case has occurred for at least 90 days prior to submitting the proposed conditional payment amount to Medicare

Explicit instructions on how to use this process will be posted on the Medicare Secondary Payer Recovery Contractor's website at www.msprc.info by January 15, 2012. CMS will leverage existing processes to the greatest extent possible. This is an initial step to provide beneficiaries and their representatives with Medicare's conditional payment amount prior to settlement. CMS plans to expand this option as it gains experience with this process. Hopefully, this option will be expanded both in the types of injuries and the amount of settlement.

GLOBAL SETTLEMENT ANNOUNCED FOR CHINESE DRYWALL KNAUF CLAIMS

On Thursday in New Orleans, Judge Fallon announced at the monthly status conference for the Chinese Drywall MDL that a global settlement has been reached with Knauf (KPT).　The settlement will include all plaintiffs who filed claims against KPT prior to December 9, 2011.

The final settlement document is not presently available.　It will be made public and posted on the Court's website December 20, 2011.

The general terms of the settlement were described as follows:

The homeowner will have three (3) options to choose from.

1. The homeowner can participate in a remediation performed by Moss Construction (essentially the same settlement as the pilot remediation program); or,

2. A self-remediation with a "qualified contractor" of the homeowner’s choosing; or,

3. A pure cash-out option. The cash-out option will not include the $8.50 per square foot for move out cost. In addition, the cash-out option will be provided at a $4.00 per square foot discount from the remediation cost.

Finally, the settlement will create a $30 million "other loss," fund. Plaintiffs can make claims against this fund for economic losses caused by Chinese drywall as well as claims for personal injuries. The economic losses envisioned for this fund include those homeowners who have been foreclosed on or were forced into a short-sale because of toxic and corrosive Chinese drywall.

In addition, Knauf has agreed to pay attorneys’ fees and costs up to $160 million. This option will make homeowners whole because attorney’s fees will not be taken out from this option.

There will be no details of the settlement until the settlement documents are released on December 20, 2011. A preliminary settlement approval hearing will be held on January 4, 2012. After that, it is anticipated that a fairness hearing will be held in front of Judge Fallon sometime in either June or July of 2012.

For those homeowners whose claims are already in the pilot remediation program, this settlement should have little effect on that process moving forward.

ACTOS LAWSUIT UPDATE

Actos, a prescription drug designed to help diabetes patients manage their blood sugar levels, is one of the best selling drugs in the United States, bringing in over $2.4 billion dollars in sales. Hundreds of thousands of people worldwide have taken Actos, but many may be unaware of the increased danger of bladder cancer that long-term usages of Actos can bring.

In early testing, Actos was found to provide only a small increase in the chance of contracting Actos bladder cancer while taking the drug. However, in September 2010, the FDA announced that Takeda Pharmaceuticals, the manufacturer of Actos, provided interim data spanning five years that suggests there may be a risk of bladder cancer the longer the medication is used. After 24 months, the rate of exposure and the increased Actos cancer risk reached statistical significance. In June 2011, an Actos recall was issued in France after health authorities ordered doctors to stop prescribing the drug due to the possible risk of bladder cancer.

Germany has also pulled the drug completely off of the market. The sale of Actos is still allowed in the United States at this time, but the FDA has issued a warning about the product and the risk of bladder cancer. The FDA has also ordered the manufacturer to change the wording on the drug’s warning labels. Despite the enhanced warning labels on the drug, this does not mean that patients who have contracted Actos bladder cancer after taking Actos long-term to treat their diabetes cannot file an Actos lawsuit.

Because of these new findings, dozens of Actos lawsuits have been filed by people seeking redress for their injuries. A class action lawsuit has recently been filed in Louisiana against Takeda pharmaceuticals claiming that information about the danger of Actos bladder cancer was suppressed or hidden from the general public. The Actos lawsuit also alleges that the manufacturer had significant financial incentives to try and prevent the spread of the information.  In general, anyone who was prescribed the drug is a potential class member of the Actos lawsuit, even if they did not contract Actos bladder cancer while taking the drug.

A motion was filed by plaintiffs’ lawyers in August to centralize the federal litigation over bladder cancer from Actos into an “MDL”. An “MDL”, or Multi-District Litigation, is a powerful tool useful in mass torts litigation and I have blogged extensively about the benefits of the procedure. Pittman, Dutton & Hellums has represented many injured plaintiffs in a number of MDL’s including In re: Total Body Formula, In Re: Chinese-manufactured Drywall and In re: DePuy Orthopaedics, Inc. ASR Hip Implant.

Although Takeda Pharmaceuticals has indicated they agree the lawsuits should be consolidated for discovery and pretrial proceedings, they disagree about where the cases should be centralized. The U.S. Judicial Panel on Multidistrict Litigation heard oral arguments for a motion for centralization of the Actos lawsuits on December 1, at their hearing session at the Tomochichi United States Courthouse in Savannah, Georgia. All lawsuits allege that defendants, including Takeda Pharmaceuticals, were negligent and failed to warn of the risks associated with the medication. The motion for the MDL was filed on August 31 by plaintiffs Glen and Nina Weant. Our firm filed a brief advocating for the MDL to be located in Birmingham, Alabama.

As a patient who was prescribed Actos, either for diabetes glucose management or any other reason, you need to be aware of the increased risk of Actos bladder cancer that taking Actos brings. If you have Actos bladder cancer, or believe that you may have Actos bladder cancer, please contact me at booths@pittmandutton.com or call toll free 1-866-515-8880.