Sacramento Nursing Home Insurers Fight To Withhold Benefits, Part 4 of 6

The following blog entry is written from a defendant’s position during pre-trial litigation. Reviewing this kind of briefing should help potential plaintiffs and clients better understand how parties in an elder abuse case present such issues to the court.

(Please note: the names and locations of all parties have been changed to protect the confidentiality of the participants in this personal injury case and its proceedings.)

Restitution Is Not An Appropriate Remedy for Medi-Cal or Medicare Patients

Defendants also contend that Plaintiff cannot, as a matter of law, seek restitution on behalf of those residents who receive Medi-Cal and Medicare benefits. Any party seeking to restore federal funds must do so through the federal False Claims Act, 31 U.S.C. §§ 3729-3733. Similarly, individuals seeking to restore state funds based upon false claims must proceed under the California False Claims Act, Government Code §§ 12650-12656.

As to EF’s argument that Medi-Cal is akin to a loan in which Residents have an ownership interest, this argument was soundly rejected by the California Supreme Court in Kizer v. Hanna (1989) 48 Cal.3d 1. The court held, as part of a retroactivity analysis, that there is no debt created by recoupment scheme of Welfare & Institutions Code Section 14009.5. EF is, therefor, simply wrong in its bootstrap assertion that nursing home residents incur a liability at the time Medi-Cal makes payments on their behalf and that the residents, therefore, have an ownership interest in the money. To the contrary, as explained in Hanna, “the payment of Medi-Cal does not create a debt under section 14009.5, because the Department’s right to reimbursement arises only after the recipient’s death and even then is contingent upon conditions in existence at that time.” Id., at 11. As noted in Defendants’ moving papers, Section 14009.5 clearly states that there is no right to reimbursement if the recipient leaves a surviving spouse, a minor or disabled child, or an insufficient estate.

The statute also has no effect on the Medi-Cal recipient’s right to dispose of his property during his/her lifetime. Welfare & Institutions Code § 14015. Consequently, no debt arises upon the payment of Medi-Cal benefits. Kizer, supra, at 12.

Most significantly, the estate recovery program is intended to permit the Medi-Cal program to recoup funds for the California government. It does not mean that the deceased beneficiary has (or had) any property rights in these funds. As the California Supreme Court explained in Kizer, Section 14009.5 enables Medi-Cal to help those persons in need when they have such need, yet ensures that when the need no longer exists by virtue of the recipient’s death, the benefits paid can be recouped. The Medi-Cal benefits thus recouped can be used to assist others in need. Kizer, at 6. Nothing in this system evidences a legislative intent to create any property rights in Medi-Cal beneficiaries. Instead, Welfare & Institutions Code §14002 expressly negates any contractual right to receive Medi-Cal benefits. Moreover, as courts have previously explained, Medicaid recipients do not have a property interest in their Medicaid program participation sufficient to even state private rights of action against providers for violations of Medi-Cal requirements. See, e.g., Stewart v. Bernstein (5th Cir. 1985) 769 F.2d 1088, 1094. Based on the above, it is clear that Medi-Cal recipients cannot possibly have an ownership interest in money they never received or paid. Plaintiff’s claim for restitution on behalf of Medi-Cal recipients must, therefore, be stricken. (See Part 5 of 6.)

For more information you are welcome to contact Sacramento personal injury lawyer, Moseley Collins.

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