[TheMercenary]

A trial lawyer power grab that may unleash a flood of Medicare lawsuits.

Just before the House leadership's 794-page health care reform bill went to a Ways & Means markup last Thursday, a remarkable provision was slipped in that amounts to one of the more audacious and far-reaching trial lawyer power grabs seen on Capitol Hill in a while. Republicans managed to fend it off for the moment--but don't be surprised if it shows up again down the road in some form.

The provision would have drastically widened the scope of lawsuits against what are known as Medicare third-party defendants. In the simplest scenario, Medicare has paid the bills of someone injured in, say, a car accident, and then learns that the beneficiary has successfully sued and obtained damages from the other driver. Sometimes at this point Medicare (i.e., the government) demands that the beneficiary hand over some or all of the settlement toward the cost of the health care. Under some conditions, however, it is also free to file its own lawsuit to recover the medical outlays directly from the negligent driver (who in some circumstances might even wind up covering the same medical bills twice). It might file suit directly if, for example, it does not expect to get a collectible judgment from the beneficiary.

For some time now, the federal government has been stepping up its pursuit of money from these defendants. The language slipped into the health bill would greatly expand the scope of these suits against third parties, while doing something entirely new, namely allow freelance lawyers to file them on behalf of the government--without asking permission--and collect rich bounties if they manage thereby to extract money from the defendants. Lawyers will recognize this as a "qui tam" procedure, of the sort that has led to a growing body of litigation filed by freelance bounty hunters against universities, defense contractors and others alleged to have overcharged the government.

It gets worse. Language in the bill would permit the lawyers to file at least some sorts of Medicare recovery actions based on "any relevant evidence, including but not limited to relevant statistical or epidemiological evidence, or by other similarly reliable means." This reads very much as if an attempt is being made to lay the groundwork for claims against new classes of defendants who might not be proved liable in an individual case but are responsible in a "statistical" sense. The best known such controversies are over whether suppliers of products such as alcohol, calorie-laden foods or guns should be compelled to pay compensation for society-wide patterns of illness or injury.

A few other highlights of the provision:

--It would knock out a significant current barrier to litigation by doing away with a rule that restricts the filing of a Medicare suit until after a previous "judgment," that is to say, after the success of an earlier lawsuit establishing responsibility for the injury.

http://www.forbes.com/2009/07/22/med...ter-olson.html