Medicare Set Aside and MMSEA Section 111 Legal Cases - U.S. v. Hadden

Blackburn Group, Inc. MSA and MMSEA Section 111 Legal Cases - US v. Hadden, No. 1:08-CV-10 2009 WL 2423114 (D. W.D. Ky, Aug. 6, 2009)

This case involved a pedestrian plaintiff, Mr. Hadden, who was struck by a utility truck as he was walking on a sidewalk. The accident was caused when an unidentified driver ran a stop sign, which caused the utility truck to take evasive action to prevent a collision. In doing so, the utility truck struck Mr. Hadden causing bodily injury. Mr. Hadden sued the utility truck driver, however he was unable to sue the driver who ran the stop sign since they could not be found.

Mr. Hadden eventually reached a settlement with the utility truck driver in the amount of $125,000. Medicare made a conditional payment demand from Mr. Hadden for approximately $64,252.37. Mr. Hadden objected to Medicare's conditional payment demand and requested that Medicare reduce or waive its claim based, in part, on "comparative fault" and "equitable allocation" principles. Mr. Hadden argued that based upon the facts of the case a reasonable fault allocation would be 10% against the utility truck driver (against who he could recover) and 90% against the unidentified driver (against who he could not recover). Accordingly, he argued that Medicare should reduce its claim to no more than 10% of the claimed principal amount. Additionally, Mr. Hadden argued that Medicare's claim should be reduced under the "compromise" and "waiver" provisions per the Code of Federal Regulations (CFRs).

The court rejected all of Mr. Hadden's arguments and ruled that Medicare was entitled to a full recovery of its claimed conditional payment amount. In reaching its decision, the court held that the principles of "comparative fault" and "equitable allocation" were inapplicable under the MSP. Furthermore, the court found that Mr. Hadden did not provide sufficient evidence in support of his "compromise" and "waiver" arguments as required under the CFRs. This case was appealed and heard before the United States 6th Circuit Court of Appeals on October 13, 2010. The appellate decision upheld the district court on November 21, 2011. Click here for more information.