The Court of Appeals held that Medicaid discounts are not collateral sources subject to offset under Minnesota Statute §548.251 and Swanson v. Brewster. As a result, a plaintiff can collect the entire amount billed by a health care provider at trial, even if Medicaid paid less than the billed amount to satisfy the bill.
Because of this decision, plaintiffs will be treated differently based on whether they receive Medical Assistance or Medicare benefits, or whether they do not. Those receiving assisted benefits will be awarded the negotiated discount which in turn requires the defendants to pay said discounts. Unfortunately, this will impact the value of those cases. The Court did acknowledge differential treatment of plaintiffs as the current statute reads but did not specifically address this issue. Instead, the Court simply stated that, if the collateral-source-calculations statute “needs revision in order to make it embody a more sound public policy, the Legislature, not the Judiciary, must be the reviser.”
In Getz, the appellant, who was injured in an automobile accident, was awarded over $224,000 in past medical expenses. Appellant was a Medicaid recipient, and Medicaid had satisfied these bills in full by paying approximately $45,000. After trial, Respondents moved for a determination of collateral sources pursuant to Minn. Stat. § 548.251, subd. 2, asking the Court to limit the award of past medical expenses to the amount actually paid by Medicaid, and to treat the negotiated discount as a collateral source offset.
The District Court determined that because the Medicaid payments were made pursuant to privately negotiated contracts with UCare and Medica, and were not made by or pursuant to negotiations by Minnesota DHS, these payments were not “payments made pursuant to the Social Security Act” and therefore were properly considered collateral sources and reduced the total award of past medical expenses to the amount of Medicaid’s lien.
Appellants appealed, arguing that the Medicaid payments are “payments made pursuant to the Social Security Act” and therefore are excluded from the definition of a collateral source under Minnesota Statute § 548.251 and the Court of Appeals’ decision in Renswick v. Wenzel.
The Court of Appeals agreed with Appellants and reversed the decision of the District Court. In reversing the District Court’s decision, the Minnesota Court of Appeals looked to the plain language of the collateral source statute which provides that payments made “pursuant to” the Social Security Act are not collateral sources subject to offset, and held that because Medicaid plans, including the plans making payments in this case, are authorized by Title XIX of the Social Security Act, these Medicaid payments are made “pursuant to” the Social Security Act and are not collateral sources.
If you have any questions or would like more information regarding this decision and its impact on the evaluation of civil cases, please feel free to contact us.
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