BARRICELLA v. CARDIOLOGY PLLC (2022)

By Notice of Motion dated September 29, 2022, Plaintiff seeks an order determine the lien amount due to Onondaga County Department of Social Services (Doc. No. 71). Plaintiff seeks a “reduction of a Medicaid lien based upon the governing statutory language, and its interpretation in Arkansas Department of Health & Human Services v. Ahlborn, 547 U.S. 268, 126 S.Ct. 1752, 164 L.Ed.2d 459 [2006]” and its State progeny (see Affirmation, Doc. No. 72, ¶2). Onondaga County Department of Social Services (“DSS”) appeared and opposes a reduction in the Medicaid lien (see Affirmation, Doc. No. 81).

The underlying action was set for trial, to be commenced on April 18, 2022, however, the matter was settled in the amount of $X ¹ paid to Plaintiff Veronica L. Barricella (see Affirmation, Doc. No. 72, ¶4). Plaintiff contends there is a Medicaid lien in the amount of $45,629.39 (ibid, ¶5). Subsequent to reaching the settlement agreement, Plaintiff's Counsel contacted the third-party liability contractor, HMS, and requested a lien compromise (ibid, ¶6). In response to the lien compromise, the Office of the Medicaid Inspector General sent a letter dated April 20, 2022 that it was “determined that there are sufficient funds to pay the Medical Assistance lien in full” and the request for a lien compromise was denied (see Letter, Doc. No. 75). Plaintiff's counsel sent a reply to HMS with an itemization of Plaintiff's losses, totaling $1,821,963.21 and asked that a lien compromise be reconsidered (Affirmation, Doc. No. 72, ¶7). Plaintiff's counsel avers efforts at compromise were not successful (ibid). Plaintiff notes that pursuant to Ahlhorn, supra, DSS may not impose its lien on the full recovery and are limited to that portion of a judgment or settlement that represents payments for medical expenses (ibid, ¶8). Plaintiff asserts the settlement represents only X%² of her losses (ibid, ¶10). Plaintiff seeks reduction of the Medicaid lien to $912.59 (ibid, ¶11).

DSS opposes the relief sought. DSS acknowledges that notice of the instant action was provided to HMS (see Affirmation, Doc. No. 81, ¶6). In response to such notice, HMS filed a notice of lien with the Onondaga County Clerk's Office pursuant to Social Services Law § 104-b (ibid). DSS acknowledges that Plaintiff's counsel requested from HMS a statement of the Medicaid lien amount and was provided a figure of $45,629.39 (ibid, ¶8). DSS claims that amount was incorrect and the proper amount should be $54,156.08 (ibid). DSS claims it was not given notice of settlement negotiations “nor was [DSS] allowed to participate in those settlement discussion” (ibid, ¶9). DSS acknowledges the instant motion is the proper venue to determine the Medicaid lien (ibid, ¶10). DSS claims that pursuant to Gallardo v. Marstiller, ––– U.S. ––––, ––––, 142 S.Ct. 1751, 1755, 213 L.Ed.2d 1 (2022), DSS is not only entitled to funds already expended, but also to future medical expenses (ibid, ¶11). DSS further asserts Plaintiff is incorrect with her calculation of the value of her case at $1,821,963.21 (Affirmation, Doc. No. 81, ¶20, et seq.). DSS claims the true value of Plaintiff's case would not exceed the agreed settlement of $X ³ (ibid, ¶28). DSS opposes the relief sought.

Plaintiff replied and reiterated her arguments (Doc. No. 88).

 Discussion:

Plaintiff seeks reduction of a Medicaid lien. The Parties waived oral arguments and submit the motion to be determined on papers. DSS opposition mistakenly relies upon the Federal Supreme Court's opinion in Gallardo. In Gallardo, the “question presented is whether § 1396k(a)(1)(A) permits a State to seek reimbursement from settlement payments allocated for future medical care” and the Supreme Court held a State may (Gallardo at 1755). At issue was a specific Florida statute which provided a specific formula for calculating what Florida was entitled to recover (ibid at 1756). That formula created a presumptively correct amount, however, “Beneficiaries can rebut that presumption by proving with clear and convincing evidence ‘that the portion of the total recovery which should be allocated as past and future medical expenses is less than the amount calculated by [Florida's] formula’ ” (Gallardo at 1756, citing Florida Statutes § 409.910(17)(b)). The facts in Gallardo are also distinguishable from the instant matter as Gallardo involved a minor struck by a truck while exiting a school bus who remains in a persistent vegetative state and “Medicaid continues to pay her medical expenses” (Gallardo at 1757). Plaintiff was admitted to Crouse Hospital from April 25, 2015 through April 29, 2015 (see Bill of Particulars, Doc. No. 73).

Unlike Gallardo, the instant matter is governed by Social Services Law § 104-b. DSS is entitled to “a lien for such amount as may be fixed by the public welfare official not exceeding, however, the total amount of such assistance and care furnished by such public welfare official on and after the date when such injuries were incurred” (Social Services Law § 104-b(1)). The Statute further provides:

“No such lien shall be effective, however, unless a written notice containing the name and address of the injured recipient, the date and place of the accident, and the name of the person, firm or corporation alleged to be liable to the injured party for such injuries, together with a brief statement of the nature of the lien, the amount claimed and that a lien is claimed upon the said right of action, suit, claim, counterclaim or demand by the public welfare official be served prior to the payment of any moneys to such injured party” (Social Services Law § 104-b(2)).

The notice of lien must be mailed to the insurance carrier at least twenty days before payment to the injured party and an additional copy of the notice must be sent to the injured party or her attorney (ibid). The notice of lien must be filed in the county clerk's office (Social Services Law § 104-b(3)). An amended notice may be served in the same manner as an original notice (Social Services Law § 104-b(4)). The person or carrier having notice of the lien needs to give the social services notice of the impending payment at least ten days prior to the payment date (Social Services Law § 104-b(5). While Gallardo found the Florida statute at issue permissible under Federal Law, New York law does not have an analogous provision to seek future medical expenses. In New York, DSS is limited to what is stated in its notice of lien, based upon the record in this case, $45,629.39. However, failure to give notice of the settlement payment permits DSS to file an amended notice to incorporate any other medical expenses paid but not included in the prior notice of lien (Social Services Law § 104-b(5)(c)). Reviewing the record, that amount would be $54,156.08 (see Affirmation, Doc. No. 81, ¶8; see also Member Claim Detail Report, Doc. No. 84).

Gallardo did not disturb this State's caselaw resulting from Ahlborn. This Court is required to determine the value of Plaintiff's case and what portion is allocated to medical costs (see Matter of Homan v. County of Cattaraugus Dept. of Social Servs., 74 A.D.3d 1754, 1755, 905 N.Y.S.2d 387 [Fourth Dept. 2010]; see also D.J. v. 636 Holding Corp., 154 A.D.3d 453, 62 N.Y.S.3d 326 [First Dept. 2017]). In support of Plaintiff's demand, Plaintiff's counsel calculated Plaintiff's losses as follows:

(see Letter, Doc. No. 76) DSS does not attack Plaintiff's specific calculation, but merely states:

“[W]hile there appears to be a dearth of reported upstate verdicts and/or settlements in similar cases, a review of the jury verdicts and settlements that do exist relative to similar cases throughout New York State (upstate and downstate) reveals that juries have routinely found in favor of defendants; or alternatively, have returned verdicts for sums far below the value that Plaintiff has placed on her case, as well as the agreed upon settlement amount” (Affirmation, Doc. No. 81, ¶26).

The Court must accept Plaintiff's value of the case as there is no competent evidence rebutting same. Plaintiff settled the matter for $X,⁴ representing X % of the purported value of the case. Unlike in other cases concerning Medicaid liens, Plaintiff herein does not claim a non-reimbursement or de minimis amount attributable to the Medicaid lien (see D.J. at 457, 62 N.Y.S.3d 326). The Court determines the value of the Medicaid lien to be $X, representing the proportional reduction from the “case value” to the settlement amount.

NOW, THEREFORE, upon reading and filing the papers with respect to the Motion and due deliberation having been had thereon, it is hereby

ORDERED, that the Medicaid lien amount due is $X.

FOOTNOTES

1.   Sealed per settlement agreement

2.   Sealed per settlement agreement

3.   Sealed per settlement agreement

4.   Sealed per settlement agreement

Gerard J. Neri, J.