May 2012 Subrogation Update

Home » Legal Updates » May 2012 Subrogation Update

The United States District Court for the Eastern District of New York has provided plaintiffs and their attorneys more ammunition to dispute that Medicare Advantage plans and their collection agents have any form of a “lien” or subrogation right on injury settlements in New York.

In Konig v. Yeshiva, 2012 WL 1078633 (E.D.N.Y.) the Eastern District remanded a notice of removal filed by Rawlings Company, LLC on behalf of Oxford Health Plans, LLC finding that there was no basis for federal jurisdiction to review the decision of the Supreme Court of King’s County which purported to extinguish any lien or subrogation rights that Rawlings and Oxford asserted on a monetary recovery made in a negligence action.  Rawlings and Oxford had contended that there were entitled to be heard in federal court as the health plan at issue was a so-called Medicare Advantage Plan (“MAP”) and, according to them, their status as a MAP provided them with subrogation rights under the federal Medicare laws creating a federal question. In issuing their decision the Court not only held that this contention was not grounds for removal but they again reiterated that recent case law has held that MAP’s are not Medicare and that the Medicare laws do not create any private cause of action for MAPs to enforce any claimed subrogation rights.

In addition, the Court gave a little verbal smack to Rawlings in a footnote where it wondered how Rawlings “which has no interest at stake in the lawsuit” could properly consider itself a defendant in the civil action for purposes of removal.  Although the Court gave no answer to their implied query, most PI lawyers probably have a long list of potentially unflattering answers to that question.  However, we will leave it to them to supply those answers on their own.  To read the entire opinion, please click here.