CMS Fails to Bypass Requirement to Reduce for Attorneys Fees

March 6, 2019


The US District Court for the Middle District of Pennsylvania recently denied a summary judgment motion to skip the reduction for attorney’s fees and costs in a case between CMS and a Medicare beneficiary.  United States vs. Richard Angino, et al, No. 3:17cv1193 (US Dist Ct Mid PA) (2019). In 2016 that same court held that a Medicare beneficiary's estate, which had just collected a wrongful death settlement, was required to repay Medicare's conditional payments in spite of the fact Medicare added an enormous amount of claim-related benefits to the conditional payments ledger after the case had been settled.*  The decision was upheld on appeal to the 3rd Circuit. Gloria L. Trostle, et al vs. Centers for Medicare and Medicaid Services, No. 16-4062 (3rd Cir. Court of Appeals) (2017).


Apparently giddy from its win over a dead beneficiary, CMS went right to work to collect the reimbursement from the estate, but now CMS wanted more.  Citing 42 CFR § 411.37(e), CMS said it no longer had to reduce the reimbursement by a pro rata share of attorney’s fees and costs, so it wanted 100% of the benefits it paid ($83,353) reimbursed.  The estate responded it was ready to pay the reimbursement but only if CMS applied the attorney fee reduction ($53,295.14).  Unwilling to do so, CMS filed suit and moved for summary judgment on the full amount.


The court found CMS' motion wanting:


"The Plaintiff United States moves for summary judgment on the basis that as a matter of law it is entitled to $84,353.00 plus interest. According to the plaintiff, it is not limited to recovering $53,295.14 as the defendant suggests. Defendants claim that several questions of fact exist which make summary judgment inappropriate. After a careful review, we agree with the defendants."


US v. Angino, MSJ Memorandum at p. 5.  While the court did not fully explain why it did not permit CMS to rely on 411.37(e), it did highlight the fact the central issue of the case was how much was owed, not whether it was owed. US v. Angino, MSJ Memorandum at p. 7.  It seems that were the court to revisit the issue, it would find that arguments over how much in benefits owed does not rise to the level of refusal to pay 42 CFR § 411.37(e) envisions.


The Takeaways: First, don't settle a case under the impression you will only be paying Medicare the total on the Conditional Payments ledger.  Unless you have obtained an amount certain under the Final Conditional Payments Process, you must audit your client's billing ledgers carefully and know how much Medicare could have paid.  Second, remember your Administrative Law class from law school and EXHAUST YOUR ADMINISTRATIVE REMEDIES! This case got out of hand because the beneficiary's attorney didn't appeal the Final Demand through the agency, robbing the US District Court of jurisdiction and subjecting their client to additional reimbursement obligation.  Third, don't take what CMS tells you as gospel.  They get their own rules wrong frequently, and this one could have cost them or their client an additional $30,000.


If you need help with a Medicare reimbursement or have questions about how Medicare appeals work, contact us at


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