An Arizona appeals court rules that Medicare Part C preempts the state anti-subrogation doctrine, meaning that a Part C plan may seek reimbursement of medical expenses paid to a nursing home resident who received a settlement from the facility. Estate of Ethridge v. Recovery Management Systems, Inc. (Ariz. Ct. App., Div. 1, No. 1 CA-CV 12-0740, May 13, 2014).
When Deborah Ethridge was injured while in a nursing home, her Medicare Advantage plan paid for care she received to treat her injury. After Ms. Ethridge died, her estate filed a claim against the nursing home, eventually settling for $1.2 million. The Medicare Advantage plan requested that the estate reimburse it for medical expenses.
The estate sued the Medicare Advantage plan, requesting a declaratory judgment that the plan was not entitled to reimbursement for the medical expenses under Arizona’s common law anti-subrogation doctrine. The trial court determined that Medicare Part C did not preempt the anti-subrogation doctrine, so the estate was entitled to judgment. The plan appealed.
The Arizona Court of Appeals reverses, holding that Medicare Part C preempts the state anti-subrogation doctrine. According to the court, the "plain language of the Part C preemption provision demonstrates that Congress expressly preempted all but a very limited number of state laws," and the anti-subrogation doctrine is not one of the exceptions. The court further rules that Medicare law grants "Medicare Advantage plans the same right to reimbursement for conditionally paid medical expenses as granted to traditional Medicare."
For the full text of this decision, go to: https://azcourts.gov/Portals/0/OpinionFiles/Div1/2014/Amended%201%20CA-CV%2012-0740.pdf
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