SHARIKA ROBINSON, ATTORNEY AT BLALOCK LEGAL1
Narrow in scope but broad in impact, the Honoring Our Promise to Address Comprehensive Toxics (“PACT”) Act, which included the Camp Lejeune Justice Act of 2022, has sparked much “buzz” in the legal, veteran, and civilian communities—and rightfully so. Signed on August 10, 2022, by President Biden, the Act allows claimants two years from the date of enactment to file claims against the United States for exposures to toxins in the water at Camp Lejeune, a United States Marine Corps Training Base in Jacksonville, NC that was established in 1942.
ABC One-Hour Cleaners, an off-base dry-cleaning firm, dumped gallons and gallons of deadly toxins into water used for everyday functions, such as drinking, bathing, and swimming. The United States knew about the toxins but failed to provide adequate notice to those who were impacted. Because of this, several veterans, their family members and others who were at Camp Lejeune suffered severe illness or even died. The victims sued. But courts ultimately dismissed their claims for a variety of reasons, including the statute of repose and the Feres doctrine, under which veterans cannot sue for harms incident to military service. The Camp Lejeune Justice Act will give the victims a second chance.
The Camp Lejeune Justice Act Basics
The Camp Lejeune Justice Act was a direct response to the Camp Lejeune litigation. The Act extends to 23 specific conditions.2 The list includes 11 respiratory conditions, along with several forms of cancer.3
To begin the process, applicants must file an administrative claim with the Department of the Navy (“DON”) before filing an action in federal court. The DON has six months to evaluate the claim before it can be filed in federal court. If a claim is filed before exhaustion, it will be procedurally defaulted. There is no need to submit medical documentation when filing a claim with the DON. In fact, the DON prefers claims to submit no medical documentation. The DON is working with a medical archive to streamline medical requests through a designated portal.
The Eastern District of North Carolina has exclusive jurisdiction and venue over Camp Lejeune claims. It has directed, however, that if “a plaintiff does not reside within the Eastern District of North Carolina, the case should be filed in the Southern Division” of the Eastern District of North Carolina.4
At this point, a few claimants have filed claims without exhausting or re-exhausting administrative remedies. These plaintiffs argued that their administrative exhaustion of similar claims before the Camp Lejeune Justice Act passed satisfies the Act’s exhaustion requirement. The exhaustion requirement of the Camp Lejeune Justice Act appears to be a provision borrowed from the 1966 Amendment of the FTCA that requires one to first file an action administratively before proceeding in federal court.5 The district court concluded that earlier filed claims must be exhausted again under the Act and dismissed the claims.
How does the Medical Care Recovery Act apply to Camp Lejeune claims?
Properly filing a successful claim is just one part of the process. Knowing how to collect and, more importantly, how to maximize recovery is another part. Likewise, many would-be claimants under the Camp Lejeune Justice Act are worried about the effect a recovery under the Act will have on their other benefits.
Such questions as, will the United States be able to claw back? One statute that concerns potential claimants is the Medical Care Recovery Act (“MCRA”) as enumerated under 42 U.S.C. § 2651. The United States is statutorily required to provide medical care to military personnel.6 The MCRA was enacted to provide the United States with a remedy to collect when a third-party injures a veteran.
The MCRA provides the Veteran Affair (the “VA”) with the right to subrogation. It allows the United States to recover from a tortfeasor the reasonable value of care furnished to an injured soldier or veteran. But the plain language of § 2651(a) limits the United States’ right to recovery; it cannot recover from itself. It provides that, if the United States treats someone “under circumstances creating a tort liability upon some third person (other than or in addition to the United States …) to pay damages therefor, the United States shall have a right to recover (independent of the rights of the injured or diseased person) from said third person[.]”7
As such, the United States’ reach under the MCRA is not absolute and, more importantly, it is not applicable to Camp Lejeune claims.
There are three groups of people who may recover under the Camp Lejeune Justice Act and who may have concerns related to the balance of their recovery. The first group of individuals are the veterans who were subjected to the toxins. The second group of individuals are the veterans’ family members. The third group of people who may recover are contractors who performed work at Camp Lejeune and were impacted by the toxins. The MCRA applies to the first group of people and their families directly. The analysis can become complicated, however, when applying the MCRA to contractors who received free treatment at a veteran hospital.
With respect to veterans, the Fourth Circuit’s decision in United States v. Brooks is particularly important.8 There, the Fourth Circuit held that it is “perfectly clear that in making the award of damages to plaintiff nothing should be included on account of hospital or medical expenses which the government has paid or on account of loss of earning power for the period for which he has drawn army pay.”9 Like the plaintiff in Brooks, Camp Lejeune claimants must sue the United States, not a third-party tortfeasor. Thus, the United States has no right to subrogation from settlement funds of the value of services provided.
For the reasons stated in the previous section, the Camp Lejeune Justice Act claims are claims against the United States and are not subject to subrogation under the MCRA even with respect to veterans’ family members.
The Camp Lejeune Justice Act also allows recovery by those who were contracted to provide services at Camp Lejeune, were exposed to the toxic water, and have a qualifying illness. By definition, those who were exposed in the employment context and were also veterans, may have a claim under worker’s compensation. Because there is an intersection of employment-related injuries and subrogation, the United States could assert a claim, not against the contractor or veteran directly, but the employer’s insurer.
The Coordination of Benefits Statute, 10 U.S.C. § 1095, provides that the United States may collect health charges provided to a covered beneficiary from a third-party payer. 10 Section 1095(a)(1) states:
In the case of a person who is a covered beneficiary, the United States shall have the right to collect from a third-party payer reasonable charges for health care services incurred by the United States on behalf of such person through a facility of the uniformed services to the extent that the person would be eligible to receive reimbursement or indemnification from the third-par
ty payer if the person were to incur such charges on the person’s own behalf.
The United States can seek recovery under the MCRA in conjunction with § 1095. The MCRA opens by stating, “[i]n any case in which the United States is authorized or required by law to furnish or pay for hospital, medical, surgical, or dental care and treatment . . . .” 11 This opening provision authorizes the United States to collect for the services and medical treatment that it provides to the family members of military persons. The United States’ right to collect for medical treatment provided, however, is limited in the same way it is limited to collect from the military person.
The MCRA alone does not allow the government to recover for services and medical treatment provided by the VA for injuries sustained by a veteran who sustained an injury and has coverage under workmen’s compensation.12 The United States only has the right to recover against employer or workmen’s compensation carrier for value of hospital and medical services furnished by Veterans Administration to veteran for injuries sustained in course of employment where veteran has assigned to the government his rights against the workmen’s compensation carrier. 13
Where a claim has been assigned to the government after treatment at the VA, the VA could have a basis to contend that it has a right to recover from the insurer.
The Fifth Circuit addressed this precise issue in United States v. Bender Welding & Mach. Co.14 There, a veteran employee was injured at work and treated by the VA. The VA billed the veteran, and the veteran assigned the right to recover medical expenses to the VA. The Fifth Circuit ruled the VA could recover the value of its services under worker’s compensation.
The VA has also publicly stated that it will not seek subrogation under the MCRA, so principles of waiver and estoppel will likely also prevent it from doing so.
Subrogation of Other Benefits
For the reasons explained above, the VA cannot under any circumstance seek subrogation from a claimant for the care that it provided to the claimant under the MCRA. Section 804(e)(2) of the PACT Act, however, has its own subrogation provision that at first glance, seems to allow the United States to seek subrogation under the Camp Lejeune Justice Act for other benefits provided to a claimant. But there are many nuances to the United States’ right to offset an award for benefits provided when the United States is both the beneficiary and tortfeasor.
Section 804(e)(2), entitled “Subrogation for Health and Disability Benefits Relating to Water Exposure” provides that an award under the Camp Lejeune Act will be offset by any award a claimant has received for the same illness due to exposure at Camp Lejeune:
Any award made to an individual, or legal representative of an individual, under this section shall be offset by the amount of any disability award, payment, or benefit provided to the individual, or legal representative … in connection with health care or a disability relating to exposure to the water at Camp Lejeune.
When interpreting a statute, a court must first start with the unambiguous text to see if it is susceptible to multiple meanings. 15 If the text is unambiguous, the statute will be enforced based on the terms as drafted. 16 A statute is ambiguous if the statute is susceptible to more than one reasonable interpretation. 17
While no court has interpreted this statute, the title itself states that the scope of subrogation is limited to benefits related to water exposure. Furthermore, a plain reading of the text requires offset of an award based on the receipt of benefits that have been provided in connection with exposures to water at Camp Lejeune.
Thus, there will be no offset of an award under this statute if, for instance, a veteran is receiving benefits for Post-Traumatic Stress Disorder but was diagnosed and received an award under the Camp Lejeune Justice Act for leukemia.
Equally important is judicial interpretation of the FTCA in regards to the offset of Social Security Benefits, Medicare, Medicaid and other benefits paid by the United States. Courts have similarly held that social security and other benefits do not offset an award unless those benefits are directly linked to the injury caused by a tortfeasor.
The Fourth Circuit has discussed what would offset an award when the United States is both the tortfeasor and benefits provider.18 In Brooks, the Fourth Circuit articulated what is now known as the “collateral source doctrine” in a context when the United States is both the tortfeasor and benefit provider. The collateral source doctrine, as a general rule, bars a tortfeasor from deducting from its liability any compensation or benefits which the harmed party may have received from a third person or entity—that is, from a source not related to the defendant, a “collateral source.”19 The Restatement (Second) of Torts states that “[p]ayments made to or benefits conferred on the injured party from other sources are not credited against the tortfeasor’s liability, although they cover all or a part of the harm for which the tortfeasor is liable.”20 “A payment made by a tortfeasor or by a person acting for him to a person he has injured is credited against his tort liability, as are payments made by another who is, or believes he is, subject to the same tort liability.”21
If the United States is both the tortfeasor and the benefit provider, the application of the collateral source doctrine is modified.22 When the United States is on both ends, courts look at both the character of the benefits received and the specific source of those benefits. If the benefit is a fringe benefit, as opposed to an effort to offset its liability, it is generally considered “collateral” and is not deducted from an award.23 Likewise, where the benefits are paid out of a special fund or designated government benefits program, rather than general government revenues from the department of the treasury, courts generally decline to deduct them from a damages award. This is particularly true when the plaintiff has contributed to the special fund.24
Indeed, the Fourth Circuit’s focus is to determine if an award will result in double payment from the Department of the Treasury. For example, the Fourth Circuit refused to reduce an award to a claimant based upon the payment of a life insurance that was provided by the United States because it was paid for by the veteran. The Fourth Circuit further explained the collateral source doctrine in United States v. Price.25 There, the Fourth Circuit stated that the underlying principal seems to be that if a plaintiff receives payments from a tortfeasor to compensate her specifically for injury from the tortfeasor, it is inequitable to require the tortfeasor to pay twice for the same injury. But if the compensation comes from a collateral source, it should not be offset against the injured party.26 In Price, the court concluded that payments made by the United States under the Civil Service Retirement Act were collateral to injury the United States caused and thus did not reduce the balance of the award.27
The Third Circuit has reached similar—if not even more favorable to plaintiffs—results. Based on the Fourth Circuit’s decisions, 28 the Third Circuit indicated that its primary focus is whether an award would result in “double-payment out of the general treasury by the United States” for the same injury.29 The Third Circuit held that Social Security Benefits should not be deducted from an award in states that recognize the collateral source rule because the payments are contributions from an employee and employer and not solely out of the treasury.30 The Third Circuit is firm that it will not allow a claimant’s award to be reduced based on payment of funds from sources other than the United States’ treasury even if provided to mitigate the same injury. More importantly, the Third Circuit suggested that it would allow a veteran to actually increase the payment of an award based on the value of services provided by the VA, if, and only if, the recovery is to be sourced from an entity other than the United States. In doing so, the Third Circuit expanded its application of the collateral source rule. In the Third Circuit, a veteran may be allowed to recover for the value of medical services provided by the VA from an entity other than the United States.31
Like the Fourth and Third Circuits, other jurisdictions, including the Ninth and Tenth Circuits, also hold that a claimant may receive benefits directly from the United States which, because of their nature, are not considered double compensation for the same injury but deemed collateral. 32
Reading the courts’ holdings leads to the conclusion that the VA’s right to subrogation or decrease of an award is not solely based on the source. Rather, the focus of the inquiry is whether the subsequent award will result in double payment to a veteran out of the United States’ treasury.33
Many courts have concluded that Social Security disability benefits and funds from other similar government programs do not offset tort liability.34 Importantly, the Eastern District of North Carolina is among those courts to have recognized no offset. 35 Other courts in the Fourth Circuit do not offset Social Security disability benefits. 36
Likewise, courts hold that Medicare payments are also a collateral source, because, like Social Security disability benefits, they are paid out of a “special fund that is separate and distinct from general government revenues” and to which a plaintiff has contributed.37 The same rule is applicable to Medicaid benefits. 38 This is true for district courts in the Fourth Circuit. 39 This, however, does not imply that Medicare and Medicaid will not have a lien on medical expenses. Furthermore, Civil Service Retirement benefits are not deductible.40 National Service Life Insurance Policy benefits also not deductible.41
Thus, it is reasonable to conclude that there will be very minimal deductions in awards under the Camp Lejeune Justice Act.
How Will Other Veteran Benefits be Impacted After Receiving an Award?
Another important and practical concern that arises in personal injury settlements is what impact a windfall of funds will have on other benefits received from the United States. Some veterans rely on these benefits to pay for their monthly and daily living expenses.
There are two types of Social Security. Social Security Disability (“SSD” or “SSDI”) and Social Security Supplemental Income (“SSI”) benefits. SSD benefits are broken into three categories: Retirement, Disability, and Survivor. Retirement benefits can be paid once a person reaches 62 to 70 years old. Disability benefits are paid to those who can’t work because they have a medical condition that’s expected to last at least one year or to result in death before retirement. Survivors’ benefits are paid to widows, widowers, and to the dependents of eligible workers.
Individuals who receive SSD have met eligibility requirements by paying into the social security system and being classified as disabled by the Social Security Administration’s standards. A personal injury settlement will not affect SSD benefits. Social Security benefits will continue.42
SSI is a federally funded supplemental income program that provides financial assistance to low-income or disabled adults and children. SSI is considered a “needs-based” government benefit. As such, one of the main eligibility requirements for SSI is an asset or resource test. SSI considers “income” anything a person receives that can be used for food or shelter but there are exclusions.43 The maximum income varies by state, but it relatively low. To be eligible for SSI, a person must not have more than $2,000 in assets and a couple no more than $3,000. The Social Security Administration considers any money as a resource in the month after it was received. Accepting a cash settlement that exceeds the statutory threshold would likely disrupt SSI eligibility.
There are some exceptions. Supplemental Nutrition Assistance Program benefits do not count as income. Income tax refunds do not count as income. And Agent Orange settlement payments do not count as income. 44 Thus, there is some room to assert a claim that Camp Lejeune Settlements, likewise, should not count as income.
Under the Medicare Act, the federal government reimburses hospitals for supplying medical services to the elderly and disabled.45 Settlements do not impact Medicare eligibility, but any settlement must be reported to Medicare within 60 days for any recovery related to personal injury claims to with it has paid medical bills. Medicare does have a lien to the claims related to the treatment received for the settled injury.
Title XIX of the Social Security Act, 42 U.S.C. §§ 1396, et seq. provides for the establishment of Medicaid, which makes federal financial assistance available to states that provide medical services to needy individuals in accordance with the Medicaid Act.
Congress has directed States, in administering their Medicaid programs, to seek reimbursement for medical expenses incurred on behalf of beneficiaries who later recover from third-party tortfeasors. States must require beneficiaries to assign the State any rights . . . to support (specified as support for the purpose of medical care by a court or administrative order) and to payment for medical care from any third party. 42 U.S.C. §1396k(a)(1)(A). 46
Thus, a state that
made any Medicaid payments will be entitled to subrogation. Similar to Medicare, settlements must be reported to Medicaid. Medicaid’s portion must be held in trust. In Wos, the Supreme Court struck down North Carolina’s practice of requiring holding one-third of settlement proceeds in escrow to reimburse Medicare for the payment of services. 47 The Court explained that the state may not “take any portion of a Medicaid beneficiary’s tort judgment or settlement not designated as payments for medical care.”48 Now, North Carolina cannot arbitrarily hold one-third of settlement proceeds to secure a Medicaid lien.
Medicaid eligibility will also be impacted by a lump-sum settlement. To be eligible for Medicaid, there are strict income limits. Typically, the benefits will discontinue for a period of time in the event a claimant receives a lump sum payment. 49 Though not considered income, lump sum payments must be reported.
Most of the courts analyze Medicaid benefits in line with other need-based programs. Until 1981, a recipient of a need-based benefit could receive a lump sum payment and not be disqualified if the funds had been depleted.50 The Omnibus Budget Reconciliation Act of 1981, required that a lump sum of money be deemed “income” to the recipient.51
Under the lump-sum rule, recipients who receive personal settlements of a claim in an amount in excess of the monthly income limit allowed by the state, are to be excluded from the program for a time equal to the time the money should have lasted under the state’s need standard.52 The rule applies regardless of how the funds are used and where the funds are derived. The United States Supreme Court upheld the termination of a family’s benefits received from a lump-sum Social Security disability payment that was used to keep the family from foreclosure.53 The only criterion is that the money falls in the possession of a person or family who is a needs-based benefit recipient. 54
CONCLUSION
The Camp Lejeune Justice Act allows veterans, veterans’ family members, and contractors a chance to recovery for the serious injuries they received at Camp Lejeune. If the VA attempts to seek subrogation from a veteran for the United States’ payments under the Camp Lejeune Justice Act, it will have an uphill battle. Neither the historical context of the Camp Lejeune Justice Act, law, nor primary purpose of the MCRA is consistent with the idea that a veteran must repay the United States for medical services it provided due to a harm that the United States caused. Such a result would be nonsensical. Nevertheless, that does not mean that a veteran can dip into the federal treasury twice for the same harm. And there may be certain limitations to benefits that have been paid. But rest assured that subrogation from a veteran for the provision of medical care and services, is not one of them.
1 B.S. in Chemistry, North Carolina State University, 2005; J.D. North Carolina Central University School of Law, 2012; Law Clerk for the Eastern District of Michigan and Sixth Circuit 2012-2015. Sharika Robinson is an attorney at Blalock Legal, a firm that primarily consists of “Veterans for Veterans”. Many of the attorneys at Blalock Legal are military veterans, including founder Harry Blalock. Sharika Robinson has litigated matters throughout state and federal courts in North Carolina on behalf of plaintiffs.
2 https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/10/fact-sheet-president-biden-signs-the-pact-act-and-delivers-on-his-promise-to-americas-veterans/
3 https://www.congress.gov/bill/117th-congress/senate-bill/3373/text
4 https://www.nced.uscourts.gov/
5 28 U.S.C. § 2675
6 Id.
7 42 U.S.C. § 2651(a) (emphasis added).
8 176 F.2d 482, 483 (4th Cir. 1949).
9 Id at 484.
10 10 U.S.C. § 1095.
11 42 U.S.C. § 2651.
12 Pa. Nat’l Mut. Cas. Ins. Co. v. Barnett, 445 F.2d 573, 574 (5th Cir. 1971) (“He made no assignment to the Veterans Administration of the United States of his workmen’s compensation benefits.”).
13 United States v. Kirkland, 405 F. Supp. 1024, 1975 U.S. Dist. LEXIS 15773 (E.D. Tenn. 1975).
14 558 F.2d 761, 762 (5th Cir. 1977).
15 Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).
16 Id.
17 See King v. Burwell, 759 F.3d 358, 367 (4th Cir. 2014) (“However, if the statute is susceptible to multiple interpretations, the court then moves to Chevron’s second step and defers to the agency’s interpretation so long as it is based on a permissible construction of the statute.”).
18 Brooks, 176 F.2d at 484 (4th Cir. 1949) (concluding that an award could only be reduced by the amount of benefits that were directly related to the injury at issue).
19 Sloas v. CSX Transp., Inc., 616 F.3d 380, 389 (4th Cir. 2010).
20 Rest 2d Torts § 920A(2).
21 Id. at § 920A(1).
22 Rofail v. United States, No. 04-CV-2502 (CBA), 2009 U.S. Dist. LEXIS 51540, at *34 (E.D.N.Y. June 18, 2009) (“This rationale applies with less force when the government is both the benefits provider and the tortfeasor.”).
23 See, e.g., Haughton v. Blackships, Inc., 462 F.2d 788, 791 (5th Cir. 1972) (“[W]here the employer-tortfeasor makes payment directly or indirectly into a fund established for an independent reason, or where such payment by the employer should be considered in the nature of fringe benefit or deferred compensation, the employer should not be entitled to benefit by setting off such income in mitigation of his responsibility as a tortfeasor.”).
24 Siverson v. United States, 710 F.2d 557, 560 (9th Cir. 1983) (“Courts distinguish between those benefits that come from unfunded general revenues of the United States (deductible) and those that come from a special fund supplied in part by the beneficiary or a relative upon whom the beneficiary is dependent (nondeductible).”
25 United States v. Price, 288 F.2d 448, 449 (4th Cir. 1961).
26 Id. (“There may be some variations among different jurisdictions, depending perhaps upon the exact nature of the compensation received, but the broad rule seems to be that where the plaintiff receives from the tortfeasor payments specifically to compensate him for his injury, the tortfeasor need not pay twice for the same damage, and therefore such compensation payments should be taken into account in fixing tort damages. On the other hand, where the injured plaintiff’s compensation comes from a ‘collateral source,’ it should not be offset against the sum awarded for the tort nor considered in determining that award.”) (internal citations omitted).
27 Id.
28 Carroll v. United States, 625 F. Supp. 1, 8 (D. Md. 1982) (“In Smith v. United States, 587 F.2d 1013, 1016 (3d Cir. 1978), the Court held that where state law recognizes the collateral source doctrine, Social Security benefits should not be deducted from a recovery under the [FTCA]. In so holding, the Third Circuit relied on rulings by the Fourth Circuit that benefits conferred by the United States out of a special fund need not be deducted from a FTCA recovery.”) (internal citations omitted).
29 Feeley v. United States, 337 F.2d 924, 929-30 (3d Cir. 1964).
30 Smith v. United States, 587 F.2d 1013, 1016 (3d Cir. 1978).
31 Smith v. United States, 587 F.2d 1013 (3d Cir. 1978).
32 See, e.g., United States v. Gray, 10 Cir., 1952, 199 F.2d 239 (declined to offset past and future medical treatment of veteran’s wife at VA even though furnished by the United States); United States v. Harue Hayashi, 9 Cir., 1960, 282 F.2d 599 (federal social security benefits, received from the United States, do not lessen the damages in a FTCA action).
33 See, e.g., Murphy v. United States, 836 F. Supp. 350, 352 (E.D. Va. 1993) (“This Court . . . finds that in deciding this issue it should place its primary reliance upon the nature of the benefit, as opposed to the source of the payment. The Price Court determined that benefits received by Price from the Civil Service Retirement Act were a collateral source and therefore such payments should not be off-set against the tort judgment. The Fourth Circuit pointed out here that participation in the retirement program was compulsory for most civilian employees of the United States, a situation which is analogous to that of the Plaintiff.”) (internal citations omitted).
34 See Smith v. United States, 587 F.2d 1013 (3d Cir. 1978) (declining to deduct Social Security survivor benefits paid to widow and children from widow’s damage award against government); Steckler v. United States, 549 F.2d 1372, 1379 (10th Cir. 1977) (remanding on issue but stating that Social Security disability benefits are collateral); Carroll v. United States, 625 F. Supp. 1, 8 (D. Md. 1982) (“The collateral source rule permits no such deduction.”).
35 Wood v. United States, 7:97-CV-46-BR(2) IN ADMIRALTY, 1998 U.S. Dist. LEXIS 21043, at *26-27 (E.D.N.C. Dec. 23, 1998) (“Pursuant to the collateral source doctrine, plaintiff’s recovery of Social Security Disability insurance will not be offset from the damages awarded below. Social Security Disability Benefits are funded by a generally applicable employment tax fund into which plaintiff has contributed throughout his working life. It is thus akin to a collateral insurance payment and will be treated as such.”)
36 Musick v. United States, 781 F. Supp. 445, 454 (W.D. Va. 1991) (“The government also raised the issue that Musick received Social Security benefits during the five years for which lost earnings have been calculated. However, the government is not entitled to a reduction for these benefits because these come from a collateral source.”).
37 Berg v. United States, 806 F.2d 978, 985-86 (10th Cir. 1986); Siverson, 710 F.2d at 560 (Medicare benefits not deductible).
38 Simms v. United States, 839 F.3d 364, 369 (4th Cir. 2016) (“Accordingly, under the collateral source rule, the government is not entitled to a credit or offset against Simms’ damages based on Medicaid’s payment of C.J.’s medical expenses.”).
39 “For the same reasons, the Court concludes that plaintiff’s Medicare benefits are not deductible from his award for lost earnings. See Berg, 806 F.2d at 984-86 (holding that Medicare benefits are a non-deductible collateral source); Siverson, 710 F.2d at 560 (same).”; see also Desir v. United States, Civil Action No. TDC-17-3465, 2021 U.S. Dist. LEXIS 36520, at *2 (D. Md. Feb. 26, 2021) (“At the outset, the parties agree that incurred medical expenses paid by Medicare and subject to a Medicare lien, which currently total $22,145, should not be offset, and that the amount may increase if Medicare asserts an additional lien.”).
40 United States v. Price, 288 F.2d 448 (4th Cir. 1961); see also Jennings v. United States, 291 F.2d 880, 887-88 (4th Cir. 1961) (“In United States v. Price, 4 Cir., 1961, 288 F.2d 448, we recently held that these civil service benefits are from a ‘collateral source,’ and, therefore, under the law of Virginia, should not be offset against a tort claims award. The Maryland cases also recognize the rule that benefits from a ‘collateral source’ should not be considered in fixing damages in a tort action, Plank v. Summers, 1954, 203 Md. 552, 102 A.2d 262, and cases therein cited. Thus, it was no error to disregard such benefits to Jennings’ dependents.”).
41 United States v. Brooks, 176 F.2d 482 (4th Cir. 1949).
42 See e.g., Carroll v. United States, 625 F. Supp. 1, 7-8 (D. Md. 1982) (“Defendant contends that any award made to plaintiff in this case should be reduced by the Social Security disability payments he has received and will continue to receive from the government.”); but see Carroll v. United States, 625 F. Supp. 1, 8 (D. Md. 1982) (“Overton v. United States, 619 F.2d 1299 (8th Cir. 1980), is not to the contrary. In that case, the Eighth Circuit distinguished Smith and held in a swine flu case brought under the FTCA that the government was entitled to a set-off for Medicare payments because the plaintiff had not made any contributions to the funds from which the Medicare payments were derived.”).
43 https://www.ssa.gov/pubs/EN-05-11015.pdf
44 https://www.ssa.gov/pubs/EN-05-11015.pdf, at 12.
45 See Social Security Amendments of 1965 (“Medicare Act”), Pub. L. No. 89-97, tit. XVIII, 79 Stat. 286, 291.
46 Wos v. E.M.A., 568 U.S.
627, 633, 133 S. Ct. 1391, 1396 (2013).
47 Wos v. E.M.A., 568 U.S. 627, 630, 133 S. Ct. 1391, 1395 (2013) (“The anti-lien provision pre-empts [North Carolina’s] effort to take any portion of a Medicaid beneficiary’s tort judgment or settlement not designated as payments for medical care.”).
48 Id.
49 Proffit v. Sorrell, No. 88-3167, 1990 U.S. App. LEXIS 27150, at *3 (4th Cir. Mar. 28, 1990) (Fourth Circuit affirmed that the removal of $4,000 from trust, put a Medicaid recipient over the poverty line and resulted in the termination of benefits for a specific period of time predetermined based on income limits and rejected the assertion that the lump sum rule applied only to AFDC, not Medicaid).
50 Watkins v. Blinzinger, 789 F.2d 474, 475 (7th Cir. 1986) (“A recipient who spends a lump sum classified as ‘income’ and becomes destitute remains ineligible for the program nevertheless, while if the lump sum had been called a ‘resource’ eligibility would have been restored.”).
51 Turner v. Ledbetter, 906 F.2d 606, 607 (11th Cir. 1990) (“Prior to 1981, AFDC recipients who received a lump sum of money were deemed in receipt of a ‘resource.’ Under the law at the time, recipients of lump sum payments were terminated from the program until the lump sum was depleted below the $ 1,000 limit. Once the funds were depleted below that amount, the recipient could once again apply for aid. After passage of the Omnibus Budget Reconciliation Act of 1981, a lump sum of money is deemed ‘income’ to the recipient. Additionally, the new law requires that the recipient be terminated from the program for a ‘fixed period’ of time, determined by dividing the lump sum amount by the recipient’s ‘standard of need.’”).
52 Mont v. Heintz, 849 F.2d 704, 707 (2d Cir. 1988) (“The requirement at issue in this case is known as the ‘lump sum rule’… Under this rule, AFDC recipients who receive an amount of income that exceeds the State’s standard of need are rendered ineligible for as many months as that income would last if the recipients spent an amount equal to the State’s standard of need each month. Thus, … if a state’s standard of need is $ 200 per month, a $ 10,000 lump sum payment to a recipient would render the recipient ineligible for AFDC benefits for 50 months.”) (internal quotations omitted).
53 Gardebring v. Jenkins, 485 U.S. 415, 430, 108 S. Ct. 1306, 1315 (1988) (respondent’s husband received a lump-sum Social Security disability payment, which was expended within two days to pay family bills” nevertheless the respondent’s AFDC benefits were forfeited for a specific time and the Court rejected “respondent’s emphasis on the harsh result in this particular case is actually, in large part, a criticism of the lump-sum rule itself”); see also Smith v. Concannon, 951 F.2d 178, 182 (9th Cir. 1991) (“that same hardship occurs with regard to AFDC, and the Supreme Court has ruled that this fact does not preclude the enforcement of Congress’s decision to disqualify. Gardebring v. Jenkins, 485 U.S. 415, 99 L. Ed. 2d 515 , 108 S. Ct. 1306 (1988). Congress wished to create an incentive for recipients of lump sums to budget such sums for monthly necessities, and to eliminate the incentive to spend the money at once. Id. at 418 n.3. The same goals are served by the application of the lump-sum rule to Medicaid. Nothing in the Medicaid Act specifically prohibits such an application.”).
54 Walker v. Adams, 741 F.2d 116, 119 (6th Cir. 1984) (plaintiff received a $5,000 personal injury settlement and the court affirmed that “the lump sum is treated as income for a set period of time, thus disqualifying the family for the number of months equal to the lump sum received divided by the state’s need standard” of Medicaid and AFDC).
