What Does the CLJA Say About Liens?

One way is that the statute specifically contemplates certain healthcare benefits and the need to address them. The statute specifically says:

“(2) HEALTH AND DISABILITY BENEFITS RELATING TO WATER EXPOSURE. — Any award made to an individual, or legal representative of an individual, under this section shall be offset by the amount of any disability award, payment, or benefit provided to the individual, or legal representative—

   (A) under—

     (i) any program under the laws administered by the Secretary of Veterans Affairs;

      (ii) the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.); or

      (iii) the Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.); and

   (B) in connection with health care or a disability relating to exposure to the water at Camp Lejeune.”

38 U.S.C. § 804(B).

The CLJA specifically mentions three (3) healthcare programs: any program administered by Veterans Affairs (“VA”); Medicare; and Medicaid. Let’s take a moment to walk through each obligation in more detail.

      a. Veterans Affairs (Military)

When thinking about Veterans Affairs reimbursement obligations, you need to first understand the basics. Veterans who are actively serving in the United States Armed Forces (Army, Navy, Air Force, Marines, and Coast Guard) are eligible for medical care at no charge from medical facilities operated by the VA. The same is true once that veteran is no longer actively serving. Importantly, the VA provides care for all service-related ailments.

For active-duty service members, the VA offers TRICARE insurance. TRICARE plans can take many forms: TRICARE Plus; TRICARE Prime; TRICARE Select; TRICARE For Life; TRICARE reserve; and TRICARE Young Adult are the primary options. www.tricare.mil/Plans/New (last visited June 20, 2023). Each of those contain more particular programs where eligibility will vary. Id. The VA also extends TRICARE coverage to active-duty family members, National Guard and Reserve members as well as their family members, retirees and retiree family members, survivors, and some spouses around the world. Id.

The VA may also provide care for non-service connected ailments under certain circumstances. However, there are exceptions. Veterans and family members are not provided care without charge for non-service connected ailments if one or more of the following are responsible for those ailments:

1.   A tortfeasor and/or its insurer (i.e., auto insurer or medical malpractice insurer);
2.   The Veteran’s own insurer (i.e., auto insurer under a UM or UIM policy); or
3.  Workers’ compensation. 

38 U.S.C. § 1729(a)(2).

Under these exceptions, the VA has a right under federal law to recover under certain circumstances. The Medical Care Recovery Act (“MCRA”) delineates those recovery rights. 42 U.S.C. §§ 2651 – 2653. The MCRA states,

“In any case in which the United States is authorized or required by law to furnish or pay for hospital, medical, surgical, or dental care and treatment (including prostheses and medical appliances) to a person who is injured or suffers a disease, after the effective date of this Act, under circumstances creating a tort liability upon some third person (other than or in addition to the United States and except employers of seamen treated under the provisions of section 249 of this title) to pay damages therefor, the United States shall have a right to recover (independent of the rights of the injured or diseased person) from said third person, or that person’s insurer, the reasonable value of the care and treatment so furnished, to be furnished, paid for, or to be paid for and shall, as to this right be subrogated to any right or claim that the injured or diseased person, his guardian, personal representative, estate, dependents, or survivors has against such third person to the extent of the reasonable value of the care and treatment so furnished, to be furnished, paid for, or to be paid for.”

42 U.S.C. § 2651(a).

But for the fact these are CLJA claims, victims receiving healthcare benefits from the VA or TRICARE should expect liens to be asserted by those organizations. Typically, any military lien obligations asserted by those organizations should be verified, resolved, and satisfied before a victim could expect to receive proceeds. Unfortunately, these organizations lack the tools to expedite lien information and resolve those liens quickly. Attorneys who have had little experience resolving military liens would be well served to look to someone with more experience, knowledge, and connections with the agency to work on their behalf to resolve any military liens associated with Camp Lejeune victims.

After reading that and reviewing the statute, you might be asking yourself a couple questions: Doesn’t the statute specifically exclude the federal government (as the United States) from recovery? Wouldn’t the exposure to the toxic water at Camp Lejeune be deemed service related (at least for active military members)? And what about that word “offset”? All very good questions.

But for the fact that these are CLJA claims, we believe powerful arguments exist to have any potential military liens linked to Camp Lejeune waived in their entirety. Based on the specific facts of these cases, we would argue that the VA has no recovery rights for any liens linked to Camp Lejeune. And we have experience to back up those arguments.

Our historical results lead us to that conclusion. In our history, in cases involving the federal government as the defendant, our firm has a 100% record of getting military liens waived in their entirety. Included in these results was a case involving a VA bill ledger of $686,683.83. 

After our client hired us to handle the lien in that case, we argued for a full waiver and received exactly that. Leaning on this experience and our legal rationale, we firmly believe all military liens should be waived in their entirety for cases involving Camp Lejeune victims. However, the statute provides the U.S. government the ability to “offset”. More on that shortly.

      b. Medicare

Over 65 million Americans are Medicare beneficiaries and Medicare pays for their healthcare.https://www.cms.gov/pillar/expand-access (last visited June 20, 2023). Under ordinary circumstances, Medicare would pay medical expenses no questions asked. However, when there is a settlement of a personal injury claim (as CLJA claims appear to be), Medicare has certain rights of recovery for medical expenses paid.

When we talk about Medicare reimbursement, we speak about it using the term “conditional payments” as opposed to a lien. Some have incorrectly called Medicare’s right a “superlien” in the past to highlight the importance of addressing Medicare when resolving a claim. Technically it’s not a lien. Instead, the federal Medicare program possesses a priority right of recovery.

Medicare conditional payment reimbursement obligations arise under the Medicare Secondary Payer (“MSP”) Act. 42 U.S.C. §1395y(b)(2). The MSP Act says,

“Payment under this subchapter may not be made, except as provided in subparagraph (B), with respect to any item or service to the extent that — (ii)payment has been made or can reasonably be expected to be made under a workmen’s compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance.”

42 U.S.C. §1395y(b)(2)(A)(ii).

This statute broadly prohibits Medicare from paying medical expenses when another entity has accepted responsibility for the beneficiary’s medical expenses. Id. Only one exception exists to that broad statutory prohibition. The law permits Medicare to pay medical expenses on behalf of a Medicare beneficiary where it does not yet know that a primary payer who accepts responsibility for the beneficiary’s medical expenses exists. 42 U.S.C. §1395y(b)(2)(B)(i). This is called a “conditional payment.” While the MSP Act permits conditional payments to be made, it requires repayment of those conditional payments “if it is demonstrated that [a] primary plan has or had a responsibility to make payment with respect to [an] item or service. 42 U.S.C. §1395y(b)(2)(B)(ii).

A Camp Lejeune victim may be Medicare enrolled if they are age 65 or older, or have been deemed disabled by the Social Security Administration and possess a sufficient work history to qualify for Medicare under age 65. Other individuals may be automatically Medicare enrolled due to conditions such as End Stage Renal Disease or amyotrophic lateral sclerosis (also known as Lou Gehrig’s disease). https://www.hhs.gov/answers/medicare-and-medicaid/who-is-eligible- for-medicare/index.html (last visited June 20, 2023).

As if the MSP Act is not complex enough, recent developments have increased the degree of difficulty. Medicare has four (4) parts: A, B, C, and D. Id. Medicare Part A generally covers hospital inpatient care or care received in a skilled nursing facility. Medicare Part B generally covers visits and care rendered by providers in office for medically necessary or preventative care services. Medicare Part C (also known as Medicare Advantage) is a substitute for Medicare Parts A or B. An individual can purchase coverage under a Medicare Advantage plan every fall instead of maintaining coverage under Medicare Parts A or B. Over 30 million Americans receive Medicare benefits from a Medicare Part C plan. https://www.cms.gov/pillar/expand- access (last visited June 25, 2023). Medicare Part D (also known as Medicare Prescription Drug) covers prescription medications. Over 50 million Americans are enrolled in a Medicare Part D plan. Id.

Historically, Medicare Part C (aka Medicare Advantage) and Medicare Part D (aka Medicare Prescription Drug) have been treated akin to private insurance. However, in the aftermath of the In Re Avandia decision from the 3rd Circuit Court of Appeals in 2012, Medicare Part C and Part D plans have aggressively expanded their rights of recovery under the Medicare Secondary Payer Act. In re Avandia Mktg., Sales Practices & Prods. Liab. Litig., 685 F.3d 353 (3d Cir. 2012). At the time of this White Paper, it is generally accepted that Medicare Part C and Part D plans have the same rights of recovery under the MSP Act of traditional Medicare Parts A and B.

Any Camp Lejeune victim may have had medical insurance through any singular part of Medicare or a combination of these Medicare programs during their lifetime. Some could have had coverage through all parts of Medicare during the life of their claim. Verifying and resolving these multiple Medicare obligations is complicated and could easily slow down the settlement process unless a specific process is in place or the organization handling the lien negotiations has ample experience in this area.

Saying that, but for the fact that these are CLJA claims, powerful arguments may exist to waive all Medicare conditional payment obligations in full. Built into the federal law are avenues to assert legal arguments based on financial hardship or equity for compromises and waivers. More arguments become available if a victim’s exposure to the contaminated water ended sometime before December 5, 1980. Our firm has been in communication with the Centers for Medicare &Medicaid Services (“CMS”) and is advocating for our clients to minimize (and zero out when possible) any Medicare conditional payment obligations which may exist. These arguments, perhaps, are the most viable reason to pursue resolution of Medicare conditional payments on a victim-by-victim basis as opposed to adopting a programmatic or global approach which may have been pursued historically. However, these are not typical personal injury claims; these areCLJA claims and the CLJA affords the federal government an “offset”. More on that shortly.

      c. Medicaid

Some Camp Lejeune victims will be enrolled in Medicaid. Medicaid is a federally funded health insurance program operated at the state level. Approximately 90 million Americans receive some form of Medicaid benefits today. https://www.cms.gov/pillar/expand-access (last visited June 20, 2023). Of those, approximately 12 million Americans are dually eligible for Medicare and Medicaid simultaneously. Id.

Some states choose to partner with Medicaid Managed Care Organizations (“MCOs”) to provide Medicaid benefits to its beneficiaries. This makes Medicaid lien resolution slightly more complicated as you need to know where to look to find the potential lien.

Medicaid lien recovery rights exist under 42 U.S.C. §1396a(a)(25). States or local agencies who administer Medicaid plans have an obligation to:

“take all reasonable measures to ascertain the legal liability of third parties (including health insurers, self-insured plans, group health plans (as defined in section 607(1) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1167(1)]), service benefit plans, managed care organizations, pharmacy benefit managers, or other parties that are, by statute, contract, or agreement, legally responsible for payment of a claim for a health care item or service) to pay for care and services available under the plan, including—

1. (i)  the collection of sufficient information (as specified by the Secretary in regulations) to enable the State to pursue claims against such third parties, with such information being collected at the time of any determination or redetermination of eligibility for medical assistance, and
2. (ii)  the submission to the Secretary of a plan (subject to approval by the Secretary) for pursuing claims against such third parties...”

42 U.S.C. §1396a(a)(25)(A).

Typically, when Medicaid recipients receive a personal injury settlement compensating them for medical expenses, federal law requires that the Medicaid program be reimbursed out of those funds for any medical expenses paid by Medicaid. 42 U.S.C. §1396a(a)(25)(H). As each state Medicaid agency has a unique recovery statute, each agency has different reduction formulas or guidelines pursuant to their unique statute. Ultimately, it’s the states under their unique lien recovery statutes which may dictate the extent to which Medicaid may recover proceeds from a Camp Lejeune victim.

What happens if a victim has moved from one state to another? Moving to a new state likely means enrolling in another state’s Medicaid program under normal circumstances. That would mean another potential Medicaid lien to resolve. Attorneys representing Camp Lejeune victims should be asking the right questions to make sure they understand everywhere a victim has lived since being exposed to the contaminated water at Camp Lejeune. If that victim has been a multi- state resident and enrolled in Medicaid, multiple Medicaid obligations may exist.

Due to a 2022 United States Supreme Court decision, some state Medicaid agencies may assert a right to satisfy their rights from that portion of a settlement that is allocated to all medical expenses, not just the portion allocated to past medical expenses. Gallardo v. Marstiller, 142 S. Ct. 1751 (2022). Camp Lejeune victims enrolled in Medicaid should anticipate Gallardo arguments from some state Medicaid agencies, and have valid rebuttals to those arguments. In some states (like Florida), those rebuttals may fail to win the day. Lillian Henderson and Nicky Raines, on Behalf of and as Parents of JR, a minor v. Agency for Healthcare Administration, 2022 Fla. Div. Adm. Hear. LEXIS 333 (July 11, 2022); see also https://cattielaw.com/f/here-we- go-post-gallardo-florida-medicaid-lien-headaches (last visited June 25, 2023). 

In other states, those rebuttals should win the day. Experienced lien resolution counsel, having already developed those rebuttals in light of Gallardo, would be of great assistance in this respect.

However, saying all of that, we are not talking about a stand alone personal injury claim; these are CLJA claims. The CLJA provides an “offset” for VA, Medicare, and Medicaid benefits paid to a victim. What is an “offset” and how might that apply here?