IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

JOSEPH B. MASON, Individually

and on behalf of all persons

similarly situated,

 Plaintiff,

v.

KATHLEEN SEBELIUS, et al.,

 Defendants.

HON. JEROME B. SIMANDLE

Civil No. 11-2370 (JBS/KMW)

MEMORANDUM OPINION

SIMANDLE, Chief Judge:

 This matter is before the Court on Plaintiff Joseph Mason’s

motion for reconsideration and/or clarification. [Docket Item

20.] Plaintiff requests that the Court issue an Order amending

or clarifying its March 23, 2012 Opinion and Order in this

matter. [Docket Items 18 & 19.] For the reasons stated below,

the Court will deny Plaintiff’s motion. THE COURT FINDS AS

FOLLOWS: 

 1. In this action, Plaintiff seeks to recover, on behalf of

himself and a putative class of similarly situated individuals,

money that he paid as a reimbursement to Medicare under protest

in 2009. Plaintiff was injured when he fell at a casino in 1

2004. He incurred medical costs of approximately $2,500 as a

 The Court incorporates, by reference, the factual and 1

procedural history of this action recited in its March 23, 2012

Opinion. See Mason v. Sebelius, 2012 WL 1019131, *1-3 (Mar. 23,

2012).

Case 1:11-cv-02370-JBS-KMW Document 26 Filed 07/31/12 Page 1 of 8 PageID: 600
result of that fall, which costs were initially paid by Medicare. 

Plaintiff and his wife, Carol Mason, then sued the casino owner

to recover damages for Plaintiff’s pain and suffering, medical

costs, and for loss of consortium. The tort action was

voluntarily dismissed in a settlement for a lump sum of $40,000,

a condition of which was that Plaintiff and his wife agreed to

release all claims against the casino owner, without specifically

allocating the settlement funds among the various claims for

damages. Thereafter, the Centers for Medicare and Medicaid

Services (“CMS”) demanded reimbursement of a discounted portion

of the medical care costs it paid on Plaintiff’s behalf. 

2

 2. Plaintiff sought a waiver of this reimbursement through

the Medicare administrative appeals process, which ultimately

resulted in a final adverse decision by the Medicare Appeals

Council on February 18, 2011. Thereafter, Plaintiff filed this

action. Plaintiff’s principal arguments have consistently been

that the reimbursement was not authorized by the Medicare as a

Secondary Payer (“MSP”) statute and that the reimbursement is 3

prohibited by the New Jersey Collateral Source Statute

 The benefits were discounted to $1,423.43 to take into 2

consideration Plaintiff’s procurement costs, pursuant to 42

C.F.R. § 411.37, a regulation stating that CMS’s reimbursement

will be reduced by taking into account the proportion of the

total settlement or award expended in legal fees and costs.

 Codified at 42 U.S.C. § 1395y(b)(2). 3

2

Case 1:11-cv-02370-JBS-KMW Document 26 Filed 07/31/12 Page 2 of 8 PageID: 601
(“NJCSS”).4

 3. In its March 23, 2012 Opinion, the Court granted

Defendants’ motion to dismiss and for summary judgment,

concluding, in part, that conditional Medicare payments are not a

collateral source under the NJCSS, and that the MSP statute

permits Medicare to seek reimbursement of such conditional

payments from a lump sum tort settlement such as Plaintiff

received. See Mason v. Sebelius, 2012 WL 1019131 at *7-16.

 4. On April 9, 2012, Plaintiff filed his instant motion for

reconsideration and/or clarification. [Docket Item 20.] In his

motion, Plaintiff asks the Court to clarify or reconsider its

March 23 Opinion by holding that CMS is only entitled to

reimbursement of some unspecified fraction of Plaintiff’s medical

costs as a proportionate share of his total recovery. Plaintiff

urges the Court to apply the reasoning of Arkansas Dept. of Human

Svcs. v. Ahlborn, 547 U.S. 268 (2006) to the federal MSP 5

statute, and hold that when CMS seeks reimbursement from a tort

plaintiff who has recovered an undifferentiated lump sum

settlement from a tort defendant or its insurer, in exchange for

release of claims for medical costs conditionally paid by

Medicare, that CMS is only entitled to seek a discounted amount

 Codified at N.J. Stat. Ann. § 2A:15-97. 4

 As will be explained below, Ahlborn addressed state 5

Medicaid reimbursements rather than the federal MSP statute. 

3

Case 1:11-cv-02370-JBS-KMW Document 26 Filed 07/31/12 Page 3 of 8 PageID: 602
of reimbursement. In short, Plaintiff argues, because he settled

his claims “for something less that [sic] his actual damages,” he

should only be compelled to reimburse Medicare for “something

less” than the total medical costs paid by Medicare. Pltf.s’

Brief at 11. Plaintiff does not articulate what this discount

should be in his case.

 5. Federal Rule of Civil Procedure 59(e) and Local Civil

Rule 7.1(i) governs the Court's analysis of Plaintiff’s motion

for reconsideration and/or clarification.

 6. Local Civil Rule 7.1(i) requires the moving party to set

forth the factual matters or controlling legal authorities it

believes the Court overlooked when rendering its initial

decision. L. Civ. R. 7.1(i). To prevail on a motion for

reconsideration, the movant must show: 

(1) an intervening change in the controlling

law; (2) the availability of new evidence

that was not available when the court . . .

[rendered the judgment in question]; or (3)

the need to correct a clear error of law or

fact or to prevent manifest injustice. 

Max’s Seafood Café ex rel. Lou-Ann, Inc., v. Quinteros, 176 F.3d

669, 677 (3d Cir. 1999); see also Tehan v. Disability Management

Services, Inc., 111 F. Supp. 2d 542, 549 (D.N.J. 2000). To

prevail under the third prong, the movant must show that

“dispositive factual matters or controlling decisions of law were

brought to the court’s attention but not considered.” P.

Schoenfeld Asset Management LLC v. Cendant Corp., 161 F. Supp. 2d

4

Case 1:11-cv-02370-JBS-KMW Document 26 Filed 07/31/12 Page 4 of 8 PageID: 603
349, 353 (D.N.J. 2001) (internal quotations and citations

omitted). The standard of review involved in a motion for

reconsideration is high and relief is to be granted sparingly. 

United States v. Jones, 158 F.R.D. 309, 314 (D.N.J. 1994);

Maldonado v. Lucca, 636 F. Supp. 621, 629 (D.N.J. 1986). 

 7. Defendants argue that, under this standard, Plaintiff’s

motion must be denied because Plaintiff’s argument is not a

controlling decision of law that was brought to the Court’s

attention but not considered. Plaintiff’s argument, Defendants

claim, was not previously raised before the Court in the briefing

for the summary judgment motion. The Court agrees. While the

Court notes that Plaintiff cited to Ahlborn in his opposition

brief, he did not raise it in the context of his present

argument, that the reasoning of the Ahlborn decision should be

applied to limit MSP reimbursement. Consequently, the Court will

not grant Plaintiff’s motion for reconsideration.

 8. Further, even were the Court to reach the merits of

Plaintiff’s argument, that the reasoning of Ahlborn should be

applied to the reimbursement provisions of the MSP statute, the

Court would likewise deny Plaintiff’s motion. Plaintiff makes no

effort to distinguish Hadden v. United States, 661 F.3d 298 (6th

Cir. 2011) (despite the fact that Defendants attached a copy of

the decision in a supplemental briefing to the Court on the

motion to dismiss or for summary judgment, see Docket Item 17,

5

Case 1:11-cv-02370-JBS-KMW Document 26 Filed 07/31/12 Page 5 of 8 PageID: 604
and the Court cited the case in its March 23, 2012 Opinion),

which persuasively explained why Ahlborn should not apply to the

MSP provisions. 

 9. The Hadden court rejected an argument similar to that

which Plaintiff makes now, concluding that Ahlborn was

distinguishable from the Medicare context because it was based on

the specific language of the Medicaid statute.

The Supreme Court did not divine principles of

universal application in Ahlborn. What it

did, rather, was interpret the language of the

Medicaid statute. That language limits the

state's right (actually it is the state's

obligation) to seek reimbursement from

settlement proceeds paid to a Medicaid

beneficiary. The relevant limitation is that

the state can seek reimbursement to the extent

the settlement payor has “legal liability ...

to pay for care and services available under

the plan [.]” 42 U.S.C. §§ 1396k(a)(1)(A),

1396a(a)(25)(A). So “liability” was the

critical term there; and the Court construed

it to mean that the state was limited to the

portion of the settlement that, per the

stipulation of the settling parties,

represented compensation for medical expenses. 

That is a natural reading of the term

“liability,” which indeed has a reasonably

precise meaning in the law generally. In

contrast, the critical term here [in the

Medicare context] is “responsibility”--which

does not have a precise meaning in the law

generally, though one might expect its meaning

to be broader than that of “liability.”

Hadden at 303-04 (internal citations omitted). By contrast, the

court concluded, the MSP statute permitted CMS to seek

reimbursement to the extent of the tort defendant’s (or primary

6

Case 1:11-cv-02370-JBS-KMW Document 26 Filed 07/31/12 Page 6 of 8 PageID: 605
plan’s) “responsibility” for medical expenses which, the court

noted, is defined in the statute relatively broadly.

As used in § 1395y(b)(2)(B)(ii),

“responsibility” is no longer an undefined

term into which courts might funnel their own

notions (or [plaintiff’s]) of equitable

apportionment. It is instead a term of art,

which defines several ways in which a primary

plan's “responsibility” can be demonstrated

for purposes of this section. We address only

one of them here: specifically, under §

1395y(b)(2)(B)(ii) as amended, if a

beneficiary makes a “claim against [a] primary

plan[,]” and later receives a “payment” from

the plan in return for a “release” as to that

claim, then the plan is deemed “responsib[le]”

for payment of the “items or services included

in” the claim. Id. Consequently, the scope

of the plan's “responsibility” for the

beneficiary's medical expenses--and thus of

his own obligation to reimburse Medicare--is

ultimately defined by the scope of his own

claim against the third party. That is true

even if the beneficiary later “compromise[s]”

as to the amount owed on the claim, and even

if the third party never admits liability. 

And thus a beneficiary cannot tell a third

party that it is responsible for all of his

medical expenses, on the one hand, and later

tell Medicare that the same party was

responsible for only 10% of them, on the

other. 

Id. at 302 (emphasis original). Therefore, the Hadden court

concluded that the MSP statute does not permit the kind of

proportional discounting of Medicare reimbursement contemplated

in Ahlborn and requested by Plaintiff here. The Court finds this

reasoning persuasive and, therefore, concludes that even had

Plaintiff raised this argument in the briefing on the summary

7

Case 1:11-cv-02370-JBS-KMW Document 26 Filed 07/31/12 Page 7 of 8 PageID: 606
judgment motion, the Court would still deny Plaintiff’s motion on

the merits.

 10. Plaintiff argues that the Court should apply the

Ahlborn reasoning in this new statutory context for policy

reasons. Specifically, Plaintiff argues that permitting CMS to

recover the full value of a beneficiary’s medical costs (minus,

the Court notes, Plaintiff’s procurement costs pursuant to 42

C.F.R. § 411.37) would disincentivize future settlements on the

part of Medicare beneficiary plaintiffs. Whatever the merits of

Plaintiff’s policy concerns may be, it is not in the Court’s

power to rewrite the plain text of the statute. As the Court has

concluded that the plain text of the statute permits CMS to seek

recovery of the beneficiary’s costs according to the

“responsibility” of the primary insurer or self-insured tort

defendant, the Court cannot instead choose to read the text as

limiting that authority to the defendant’s “liability” as was the

case in Ahlborn.

 11. Therefore, for the reasons stated above, Plaintiff’s

motion for reconsideration and/or clarification will be denied. 

The accompanying Order will be entered.

July 31, 2012 s/ Jerome B. Simandle 

Date JEROME B. SIMANDLE

Chief U.S. District Judge

8

Case 1:11-cv-02370-JBS-KMW Document 26 Filed 07/31/12 Page 8 of 8 PageID: 607