Articles & Updates

John Hull v. Home Depot: An Op-Ed

by James Gallen

Parties closing worker’s compensation cases often worry about liability to Medicare but a recent Michigan case points out that the private enforcement option presents another threat to be guarded against.

The Medicare Secondary Payer Act (MSP) provides a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement). In the workers’ compensation context this can come up when the employer denies bills which are then paid by Medicare but for which the employer is ultimately held responsible.

In the recent case of John F. Hull vs. Home Depot USA, Inc pending in the Circuit Court for the County of Oakland, Michigan the plaintiff was allowed to proceed with his action for double damages against his employer.Hull filed a workers’ compensation claim that was denied. Four years later a decision was issued awarding benefits including medical bills for which Medicare had paid $6,813.83 and Blue Cross/Blue Shield paid $35,419.33.Home Depot filed an appeal that was withdrawn on August 28, 2015. On September 10, 2015 Home Depot reimbursed Medicare the amount it had paid.

While the workers’ compensation claim was on appeal, Hull filed suit under the MSP for double damages to recover Medicare’s interest. After reimbursing Medicare, Home Depot filed a motion for summary disposition on the grounds of payment. In denying the motion the court pointed out that Home Depot refused to pay for Hull’s medical expenses for nearly five years, forcing Medicare to pay them. Only after suit was filed under the MSP did Home Depot finally pay the amounts owed and argue “no harm; no foul.”The court found that “This course of conduct is not permitted in light of the clear intent and purpose of the MSP.”

Judgment was to be entered with the following explanation: “Because Plaintiff’s filing of the suit prompted Home Depot’s payment of $42,233.16, Plaintiff is entitled to the double damage in that amount ($42,233.16) to reward him for his efforts.”

The lesson from this case is that it is not just the government who can sue to enforce a Medicare Lien for Conditional Payments. The injured workers can bring the suit and, if successful, will be entitled to double damages. If the principles of this case are followed by other courts, reimbursement of the conditional payments after the filing of a private action under the MSP will not prevent judgment for the double damages.

The potential for liability for double the amount of conditional payments should be taken into consideration when deciding whether to accept or deny medical expenses. If a private action is filed before settlement of the workers’ compensation claim a release of the private action suit should be included in any settlement negotiations.