Court Opinion

ID: 4292117
Source: CourtListenerOpinion
Date Created: 2018-07-06 15:10:20.251135+00
Date Added: 2024-06-11T14:38:23.564799
License: Public Domain

Kathy A. Netro, Personal
Representative of the Estate of Barbara Bromwell, deceased v. Greater Baltimore
Medical Center, Inc., No. 1990.16

Damages: Under Maryland law, assuming other conditions are met, a plaintiff who brings
a negligence action is allowed to put into evidence the bill submitted by his/her healthcare
provider and the defendant is prohibited from bringing to the attention of the jury the fact
that a portion of the bill has been written-off by the healthcare provider. See Lockshin v.
Semsker, 412 Md. 257, 284-285 (2010). Nevertheless, pursuant to Maryland Code (1974,
2016 Repl., Vol.), Courts & Judicial Proceedings Article § 3-2A-09 (“the Maryland Act”),
a defendant against whom a verdict for past medical expenses has been entered may file a
post-trial motion to reduce the judgment by the amount of the write-offs. Id. 285-86.
In 1980, the United States Congress passed the Secondary Payer Act (“SPA”), which
provides, inter alia, that when Medicare makes a conditional payment to the covered
individual for medical bills, Medicare has a right to recover the monies advanced from
either the beneficiary, the tort feasor (if self-insured) or from the tort feasor’s insurer if a
judgment for at least the amount of the medical bill is later entered in favor of the
beneficiary. No provisions in the SPA preempts any part of the Maryland Act.
Circuit Court for Baltimore County
03-C-14-009164
                                                    REPORTED

                                       IN THE COURT OF SPECIAL APPEALS

                                                  OF MARYLAND

                                                      No. 1990

                                               September Term, 2016

                                     ______________________________________

                                            KATHY A. NETRO, ET AL.

                                                         V.

                                         GREATER BALTIMORE MEDICAL
                                                  CENTER, INC.
                                     ______________________________________

                                          Kehoe,
                                          Reed,
                                          Salmon, James P.
                                              (Senior Judge, Specially Assigned),

                                                       JJ.
                                     ______________________________________

                                               Opinion by Salmon, J.
                                     ______________________________________

                                          Filed: July 5, 2018
       Most people in the United States who receive medical services have their medical

costs paid, at least in part, by private health insurers or a government insurer such as

Medicare. When the health care providers send their bills to the patient’s private or

government health insurer, those insurers very frequently do not pay 100 percent of what

the medical care providers charge; instead, they pay a reduced amount and the difference

between the amount charged and the amount paid is often written off by the health care

providers. Under Maryland law, assuming other conditions are met, a plaintiff who brings

a negligence action is allowed to put into evidence the bill submitted by the health care

provider and the defendant is prohibited from bringing to the attention of the jury the fact

that a portion of the bill has been written-off. See Lockshin v. Semsker, 412 Md. 257, 284-

85 (2010). Nevertheless, as a result of Maryland Code (1974, 2013 Repl. Vol.), Courts and

Judicial Proceedings Article (Cts. & Jud. Proc.) § 3-2A-09 (hereinafter “the Maryland

Act”), a defendant against whom a verdict for past medical expenses has been entered may

file a post-trial motion to reduce the judgment by the amount of the write-offs. Lockshin,

412 Md. at 285-86.1 The Maryland Act provides, in pertinent part:

       1
        In Lockshin, 412 Md. at 286, the court explained the reasons that write-offs should
not be considered by the jury:

       If it is for the jury to consider write-offs and reduce their verdict accordingly,
       it will be necessary for a defendant to introduce evidence to the jury of the
       actual payments made by the plaintiff’s health insurers or other collateral
       sources. As noted supra, such evidence contravenes the collateral source
       doctrine. Adopting this interpretation would require reading § 3-2A-09(d),
       as the Circuit Court did here, as fashioning a legislative exception on the
       collateral source rule, despite the statute’s omission of any reference to that
       rule. Alternatively, if evidence of write-offs and discounts by the plaintiff’s
                                                                         (continued . . .)
       (d) Medical expenses . . .

            (1) A verdict for past medical expenses shall be limited to:

             (i)    The total amount of past medical expenses paid by or on behalf
                    of the plaintiff; and

             (ii)   The total amount of past medical expenses incurred but not paid
                    by or on behalf of the plaintiff for which the plaintiff or another
                    person on behalf of the plaintiff is obligated to pay.

Cts. & Jud. Proc. § 3-2A-09(d)(1).

       The obvious intent of the Maryland Act was to prevent the victim of a tort from

recovering a verdict for past medical expenses that neither the plaintiff, nor anyone acting

on the plaintiff’s behalf, ever paid or was obligated to pay. In other words, insofar as past

medical expenses are concerned, the Maryland General Assembly wanted to prevent the

plaintiff from receiving a windfall by recovering for medical bills that were never actually

incurred.

       (. . . continued)

       health care providers is to be presented to the court in a post-verdict remittitur
       setting, similar to the procedures found in [Cts. & Jud. Proc.] §§ 3-2A-05(h)
       and 3-2A-09(c), the collateral source doctrine is not implicated or violated.
       Under this interpretation, the collateral source rule and § 3-2A-09 may be
       harmonized such that collateral source evidence of write-offs and discounts
       is not presented to the jury, but to the court, after the jury has rendered its
       verdict. Compelled by our duties to harmonize statutory language wherever
       possible and avoid repeal of the common law by implication, we embrace the
       latter interpretation as most consistent with the legislative intent and
       principles of statutory interpretation.

                                               2
       In the case sub judice, the Circuit Court for Baltimore County applied the Maryland

Act based on the following undisputed facts. Barbara Bromwell, between June 1, 2011

and June 29, 2013, received medical bills from various health care providers that totaled

$451,956.00. At the time she received those bills, she was eligible to receive Medicare

benefits as well as benefits from CareFirst BlueCross BlueShield (hereinafter “CareFirst”),

her private health care insurer. Medicare made conditional payments to Ms. Bromwell of

$157,730.75; CareFirst also paid part of the bills that were submitted, and Ms. Bromwell

and/or her personal representative paid $47,609.00 in out-of-pocket expenses. But, taking

into consideration $62,941.70 in write-offs, by Medicare and CareFirst, the total amount

Ms. Bromwell, or her insurers or anyone else either paid, or were obligated to pay, was

$389,014.30 ($451,956.00 - $62,941.70).

       After Ms. Bromwell’s death, Kathy Netro, personal representative of the estate of

Barbara Bromwell, filed a survival action in the Circuit Court for Baltimore County against

Greater Baltimore Medical Center (hereinafter “GBMC”) and others.2 When that case was

tried before a jury, the personal representative proved that $451,956.00 worth of medical

bills were sent to Ms. Bromwell (or her representative) as a result of the medical

malpractice committed by GBMC. On July 22, 2016, the jury returned a verdict against

GBMC and in favor of the personal representative for past medical expenses in the amount

of $451,956.00. The jury found, however, that GBMC’s negligence did not cause the death

       2
      Two other defendants were sued but found by a jury not to be liable for Ms.
Bromwell’s injuries.
                                      3
of Ms. Bromwell and for that reason it rejected the wrongful death claims brought against

GBMC by Ms. Bromwell’s three surviving adult children. Additionally, the jury awarded

zero dollars in regard to the personal representative’s claim for non-economic damages.

After judgment was entered on July 22, 2016, in conformity with the jury verdicts, the

personal representative along with Ms. Bromwell’s surviving children, on August 1, 2016,

filed a motion for new trial or, in the alternative, an additur.

       On August 2, 2016, which was eleven days after the judgment was entered, GBMC

filed a motion to “reduce verdict/judgment” pursuant to the Maryland Act. The trial court

denied plaintiffs’ motion for new trial or, in the alternative, an additur on August 23, 2016.

       Meanwhile, the personal representative of Ms. Bromwell’s estate filed an opposition

to GBMC’s motion to reduce the verdict/judgment. The personal representative contended

that provisions set forth in the Medicare Secondary Payer Act (hereinafter “the MSP”), a

federal law, preempted the Maryland Act because, if the provisions of the Maryland Act

did not exist, Medicare would receive approximately $18,500.00 more in repayment of the

$157,730.75 conditionally paid by Medicare, than it would receive if the Maryland Act

was enforced. Her preemption argument is based on regulations that are set forth in 42

C.F.R. (Code of Federal Regulations) § 411.37, which govern how the MSP should be

implemented. Section 411.37 reads, in pertinent part:

        (a) Recovery against the party that received payment—

          (1) General Rule. Medicare reduces its recovery to take account of the
          cost of procuring the judgment or settlement, as provided in this section,
          if—

                                               4
              (i) Procurement costs are incurred because the claim is disputed; and

              (ii) Those costs are borne by the party against which CMS [Centers for
              Medicare and Medicaid Services] seeks to recover.

                                            *       *   *

       (c) Medicare payments are less than the judgment or settlement amount. If
       Medicare payments are less than the judgment or settlement amount, the
       recovery is computed as follows:

              (1) Determine the ratio of the procurement costs to the total judgment
              or settlement payment.

              (2) Apply the ratio to the Medicare payment. The product is the
              Medicare share of procurement costs.

              (3) Subtract the Medicare share of procurement costs from the
              Medicare payments. The remainder is the Medicare recovery amount.

       To illustrate how C.F.R. § 411.37(c) operates, consider the following hypothetical:

A plaintiff incurs $100,000.00 in procurement costs (legal fees, bills from experts and other

costs) in order to obtain a $500,000.00 verdict for past medical expenses in a negligence

case in which Medicare has made conditional payments of $250,000.00.                  In that

hypothetical, Medicare’s pro rata share of the procurement costs would be 50% of

$100,000.00 or $50,000.00. But, if the total judgment is reduced from $500,000.00 to

$400,000.00 for some reason, such as implementing the Maryland Act, Medicare’s pro rata

share of the procurement costs would be 62.5% ($250,000.00 is 62.5% of $400,000.00)

and Medicare would have to pay $62,500.00 toward the procurement costs rather than

$50,000.00.

                                                5
       If, in the case sub judice, the judgment stayed at $451,956.00, Medicare would only

have to pay about 34.90% of the procurement costs because $157,730.75 is approximately

34.90% of $451,956.00. But, if the judgment were reduced pursuant to the Maryland Act,

Medicare would have to pay approximately 40.55% of the fixed procurement costs

inasmuch as $157,730.75 is about 40.55% of $389,014.30. That higher pro rata share

means, according to appellant, that Medicare would have to pay about $18,500.00 more

toward procurement costs than it would if the trial judge had not reduced the judgment

pursuant to the Maryland Act.3

       In the trial court, appellant argued that the Maryland Act should not be applied

because the MSP preempted it. According to appellant’s trial counsel, because the

reduction of the judgment meant that Medicare’s share of the procurement costs would

increase, the intent of Congress would be thwarted inasmuch as Congress intended, when

it enacted the MSP, to increase revenues to the U.S government “to the maximum extent

possible.”4

       On October 31, 2016, the trial judge granted GBMC’s post-trial motion to reduce

the judgment. In doing so, the court rejected the personal representative’s preemption

argument and, in accordance with the Maryland Act, the judgment was reduced to

       3
         The dollar amount of the procurement costs was not provided to us. Nevertheless,
the parties agree that Medicare would, if the Maryland Act is enforced and the judgment
reduced to $389,014.30, have to pay approximately $18,500.00 more in procurement costs
than it would if the judgment was not reduced.
       4
        As shown infra, there are situations where 42 C.F.R. § 411.37(c) is inapplicable
and the Maryland Act does not affect Medicare recovery.
                                            6
$389,014.30. The personal representative filed this timely appeal and raised one question,

which she phrases as follows:

       Do the Medicare Secondary Payer (“MSP”) provisions of federal law
       preempt a state law that diminishes the subrogation interest of the United
       States?

                                             I.

                           MOTION TO DISMISS APPEAL

       GBMC has filed a motion to dismiss this appeal because, purportedly, the appellant

does not have standing to protect the rights of Medicare. According to GBMC, the personal

representative’s entire purpose in filing this appeal is to protect the interest of Medicare.

GBMC argues:

              This Court has made clear, as a “fundamental principle of standing to
       appeal,” that “an appellate court will not entertain an appeal by one who does
       not have an interest that will be affected by prosecuting the appeal.” Lopez-
       Sanchez v. State, 155 Md. App. 580, 595 (2004), aff’d, 388 Md. 214 (2005).
       Similarly, the Court of Appeals has identified standing to appeal, i.e. “the
       sufficiency of an [appellant’s] interest to maintain an appeal,” as a question
       which the appellate court “can and must decide. . .” Kreatchman v.
       Ramsburg, 224 Md. 209, 215 (1961).

              In Kreatchman, the Court of Appeals explained:

              It is firmly established, we think, that in order to maintain an
              appeal, the appellant must have an interest in the subject matter
              of the appeal. If he does not, we think that rule 835(b)(1) [now
              Rule 8-602(a)(1)] is applicable—that the appeal is not
              authorized by law and that this constitutes a ground for
              dismissal of the appeal; and, as we have said, the question of
              the sufficiency of interest is one to be determined by this Court
              and could not be tried and decided by the lower court. We
              conclude that this question is properly before us.

       Id. at 217 (footnote omitted).

                                             7
       We hold that the appellant does have standing because she has an interest that will

be affected if she is successful in her appeal. If this Court were to agree with appellant that

the MSP preempts the Maryland Act, appellant would receive approximately $44,442.00

more ($62,941.70 less $18,500.00) than she would receive if the Maryland Act was

applied. We therefore reject GBMC’s contention that this appeal should be dismissed for

lack of standing.

                                              II.

                                       DISCUSSION

       As already mentioned, Medicare made a conditional payment of Ms. Bromwell’s

medical bills in the amount of $157,730.75. The payments were conditional because, when

the need for health care arose, Ms. Bromwell was eligible to receive Medicare benefits but

there existed a possibility that Ms. Bromwell (or her personal representative) might be able

to recover the amount paid for medical bills in a tort suit; in such situations, federal law

provides that Medicare’s responsibility to pay the cost of that health care is only

“secondary” to the tortfeasor’s insurance (or self-insurance). 42 U.S.C. § 1395y(b)(2). In

the subject case, GBMC was self-insured. See 42 U.S.C. § 1395y(b)(2)(A)(ii) and 42

C.F.R. § 411.22.

       42 U.S.C. § 1395y(b)(2)(B)(i) provides that a conditional Medicare payment may

be made if a primary plan:

       has not made or cannot reasonably be expected to make payment with respect
       to such item or service promptly (as determined in accordance with
       regulations). Any such payment by the Secretary [of Health and Human

                                              8
      Services] shall be conditioned on reimbursement to the appropriate Trust
      Fund in accordance with the succeeding provisions of this subsection.

A “primary plan,” insofar as here material, includes a self-insured plan such as the one

GBMC had at the time Ms. Bromwell was injured. See 42 U.S.C. § 1395y(b)(2)(A)(ii) and

42 C.F.R. § 411.21.

      42 U.S.C. § 1395y(b)(2)(B)(ii) reads, in material part, as follows:

      (ii)   Repayment required

      A primary plan, and an entity that receives payment from a primary plan,
      shall reimburse the appropriate Trust Fund for any payment made by the
      Secretary under this subchapter with respect to an item or service if it is
      demonstrated that such primary plan has or had a responsibility to make
      payment with respect to such item or service. A primary plan’s responsibility
      for such payment may be demonstrated by a judgment, a payment
      conditioned upon the recipient’s compromise, waiver, or release (whether or
      not there is a determination or admission of liability) of payment for items or
      services included in a claim against the primary plan or the primary plan’s
      insured, or by other means.

(Emphasis added.)

      Under the subsection of the MSP just quoted, GBMC, as well as appellant (an entity

that receives payment from the primary plan), have a duty to repay Medicare inasmuch as

GBMC’s responsibility to repay Medicare for the medical bills was “demonstrated by a

judgment[.]” In other words, before deducting for procurement costs, GBMC and the

personal representative who received payment from GBMC, had an obligation to repay

Medicare for any “item of service” paid by Medicare. Here, health care providers (who

rendered services to Ms. Bromwell) presented bills to Medicare that totaled $210,106.49,

                                            9
but Medicare made conditional payments only in the amount of $157,730.75.5 As a result

of Medicare paying the lower amount, medical care providers wrote-off $52,375.74

($210,106.49 - $157,730.75) of the charges.6

       In arguing that the Maryland Act was preempted by the MSP, appellant relies on the

legislative history of the MSP, beginning in 1980. Appellant points out that prior to 1980,

Medicare was a “primary payer” for most health services provided to Medicare

beneficiaries. Even when a beneficiary’s need for services arose from an injury or an

illness sustained as a result of negligence committed by a third-party whose private

insurance could pay for such services, Medicare could not recover its payments. In 1980,

Congress changed the law to allow Medicare to recover from those third-party tortfeasors

in order “to achieve major fiscal savings in the Medicare program.” United States v. Geier,

816 F. Supp. 1332, 1336 (W.D. Wis. 1993). To fulfill this goal, Congress passed the

Medicare Secondary Payer (MSP) law and expressed its intent as follows:

       Under present law, [M]edicare is the primary payor . . . for hospital and
       medical services received by beneficiaries. This is true even in cases in
       which a beneficiary’s need for services is related to an injury or illness
       sustained in an auto accident and the services could have been paid for by a
       private insurance carrier under the terms of an automobile insurance policy.
       As a result, Medicare has served to relieve private insurers of obligations to
       pay the costs of medical care in cases where there would otherwise be
       liability under the private insurance contract. The original concerns that
       prompted inclusion of this program policy in the law . . . no longer justify
       retaining the policy, particularly if it is understood that immediate payment

       5
        Over 120 medical bills were sent to Medicare in this case but Medicare, in every
instance, paid the health care provider less than the amount billed.
       6
         CareFirst also paid $10,565.26 less than the amount shown in the bills submitted
to it, which Ms. Bromwell’s health care providers also wrote off.
                                            10
       may be made by Medicare with recovery attempts undertaken only
       subsequently when liability is established.

H.R. REP. No. 1167, 96th Cong., 2d Sess. 389 (1980) (emphasis added), reprinted in 1980

U.S.C.C.A.N. 5526, 5752.

       In Zinman v. Shalala, 67 F.3d 841 (9th Cir. 1995), the Court discussed the legislative

purpose of the MSP stating:

       As first enacted, Medicare was the primary payer for medical services
       supplied to a beneficiary, even when such services were covered by other
       insurance such as an employer group health plan or liability insurance.
       Responding to skyrocketing Medicare costs, Congress in 1980 enacted the
       Medicare Secondary Payer legislation (MSP legislation), requiring Medicare
       to serve as the secondary payer when a beneficiary has overlapping insurance
       coverage. 42 U.S.C. § 1395y(b).

Id. at 843.

       More recently, in 71 Fed. Reg. 9466, 9467 (February 24, 2006), the intent of the

MSP was once again summarized:

       Beginning in 1980, the Congress enacted a series of amendments to section
       1862(b) of the Social Security Act (the Act) (hereafter referred to as the
       Medicare Secondary Payer (MSP) provisions) to protect the financial
       integrity of the Medicare program by making Medicare a secondary payer,
       rather than a primary payer of health care services, when certain types of
       other health care coverage are available. (Workers’ compensation had
       already been primary to Medicare since the implementation of the original
       Medicare statute.) In enacting the MSP provisions, the Congress intended
       that the MSP provisions be construed to make Medicare a secondary payer
       to the maximum extent possible.

(Emphasis added.)

       Appellant’s main contention in this appeal is that the Maryland Act, which allows a

judgment to be reduced by a post-trial motion, conflicts with the “paramount Congressional

                                             11
purpose” of the MSP. Appellant argues that this “paramount [] purpose” was to ensure that

the Medicare Program be reimbursed for its conditional payments “to the maximum extent

possible.” To prove that this was Congress’s “paramount” goal, appellant relies solely on

the excerpt from the Federal Register just quoted. That excerpt does not support appellant’s

argument. To reiterate, it states that “Congress intended that the MSP provisions be

construed to make Medicare a secondary payer to the maximum extent possible.”

(emphasis added). 42 C.F.R. § 411.21 states: “Secondary payments mean payments made

for Medicare covered services or portions of services that are not payable under other

coverage that is primary to Medicare.” Applying the Maryland Act in this case will not

interfere with the goal of the MSP Act as enunciated in the Federal Register. Here, if the

Maryland Act is enforced, GBMC will be required to pay 100% of the conditional

payments to appellant who, in turn, must reimburse Medicare. In other words, GBMC, and

not Medicare, will be the primary payer. The fact that Medicare, based on its own

regulations, has to pay a higher portion of the procurement costs than it would if the

Maryland Act did not exist, does not change that result.

       The case of United States v Geier provides a clear example of how federal courts

have implemented Congress’s intent that Medicare be a secondary payer to “the maximum

extent possible.” 816 F. Supp. 1332.

       The Geier case arose in 1986 when Esther Geier was injured in an automobile

accident. Id. at 1334. As a result of injuries received in that accident, Ms. Geier needed

services provided by various health care providers. Medicare made conditional payments

                                            12
of Ms. Geier’s bills in the amount of $11,150.93 and Hartford Insurance Company

(“Hartford”), Ms. Geier’s private health care insurer, paid an additional $1,494.71. Id.

       Ms. Geier brought a tort suit against the motorist who had caused her injuries. After

a court trial, the other motorist was found negligent and Ms. Geier was awarded $1,500.00

for past medical expenses and $3,000.00 for past pain and suffering. Id. at 1335. The

liability insurer for the negligent driver, General Casualty Insurance Company (“General

Casualty”), deposited $1,500.00 with the clerk of the court for the payment of the medical

expenses and did so because a dispute had arisen between Hartford and the United States

government (representing Medicare), as to who should receive payment of the monies

deposited. Id. The United States then filed suit against Geier, Hartford and General

Casualty claiming it was entitled to the $1,500.00 at issue. The government relied on 42

U.S.C. § 1395y(b)(1) (1982 & Supp. V 1987), which at that time read:

       Payment under this subchapter may not be made with respect to any item or
       service to the extent that payment . . . can reasonably be expected to be made
       promptly . . . under an automobile or liability insurance policy or plan. . . .
       Any payment under this subchapter with respect to any item or service shall
       be conditioned on reimbursement to the appropriate Trust Fund . . . when
       notice or other information is received that payment for such item or service
       has been or could be made under such a law, policy, plan, or insurance. In
       order to recover payment made under this subchapter . . . the United States
       may bring an action against any entity which would be responsible for
       payment with respect to such item or service . . . or against any entity . . .
       which has been paid with respect to such item or service. . . . The United
       States shall be subrogated . . . to any right of an individual or any other entity
       to payment with respect to such item or service under such a law, policy,
       plan, or insurance.

       The Geier Court, referring to the statutory language just quoted, said:

                                              13
       This statutory language, together with the accompanying regulations,
       legislative history for both the 1984 and 1989 amendments and the related
       case law, established that the Medicare payments to defendant Geier were
       conditional and that Congress intended for United States’ claims to take
       priority over all other rights of recovery.

       According to the regulations, it is evident that the medical claims paid by
       Medicare to defendant Geier as a result of the motor vehicle accident were
       conditional Medicare payments. 42 C.F.R. § 405.324(a). Section 405.324(a)
       states:

       (1) If [the Federal Medicare Program] has information that services for which
           Medicare benefits have been claimed are for treatment of an injury or
           illness that was allegedly caused by another party and that the beneficiary
           has filed, or has the right to file, a liability claim against the other party,
           a conditional Medicare payment may be made. . . .

                                        *    *        *
       (3) (i) If the beneficiary receives payment from an insurance carrier . . .
           she must reimburse Medicare up to the amount of the Medicare payment.

816 F. Supp. at 1335 (emphasis added).

       The Geier Court, applying 42 U.S.C. § 1395y(b)(1) and 42 C.F.R § 405.324(a), held

that Medicare had a right to recover the $1,500.00 awarded by the judge, because Medicare

paid Geier conditionally for her medical expenses in reliance on Medicare’s subrogated

interest and the right to reimbursement. Id. at 1335-36. That holding was in harmony with

Congress’s intent that Medicare’s claims were to have priority over all other claims.

       In Geier, Hartford argued that, because it fulfilled its financial obligations to Geier

and because Medicare simply paid for the medical cost remaining after Hartford’s

payments, Medicare had no right of reimbursement. Id. at 1336. The Geier Court held

that whether Medicare paid for the remaining bills was irrelevant.              In reaching its

                                                 14
conclusion, the Geier Court noted that the federal district courts applying both the 1984

and 1989 amendments to 42 U.S.C. § 1395y(b) had unanimously “held that the United

States’ right of reimbursement is paramount to any other claim.” Id. at 1337 (citations

omitted).

       In Geier, Hartford also emphasized that its subrogation rights arose from its

contractual relationship with Geier and not from Wisconsin common law. Id. The Court

held that this also made no difference inasmuch as “[p]reemption occurs when Congress

enacts a federal statute and expresses a clear intent to preempt state law or when there is

an outright conflict between federal and state law.” Id. (citing Louisiana Public Service

Comm’n v. FCC, 476 U.S. 355, 368 (1986)).

       In her brief, appellant cites Geier and appears to rely on it, but no language in Geier

supports appellant’s position that in enacting the MSP Congress intended that Medicare

recover its conditional payments to the greatest extent possible. Geier simply stands for

the proposition that Medicare’s “right of reimbursement is paramount to any other claim.”

816 F. Supp. at 1337. Here, there were no competing claims between GBMC and any other

insurer. After the Maryland Act was implemented, Medicare’s claim remained paramount.

       Cox v. Shalala, 112 F.3d 151(4th Cir. 1997) provides another example of a set of

facts that resulted in a finding that the MSP preempted a state statute. In Cox, a Medicare

beneficiary, Jack Cox, suffered severe injuries as a result of a motorcycle accident. In

connection with that accident, Medicare made conditional payments of Mr. Cox’s medical

bills in the amount of $181,187.75.       Id. at 153. After Mr. Cox died, his personal

                                             15
representative, together with his surviving spouse and an heir, filed suit in North Carolina

under that state’s wrongful death statute.         Id.   Ultimately that suit was settled for

$800,000.00. Id. The settlement received by the plaintiffs included the recovery of Mr.

Cox’s medical expenses, which Medicare had conditionally paid. Id. The North Carolina

Wrongful Death Act contained a $1,500.00 limitation on the recovery of medical expenses

in a wrongful death case. Id. That $1,500.00 limitation, if enforced, would mean that

Medicare would receive less than 1% of the conditional payments it made. The Cox Court

said:

        Under this provision [of the North Carolina Wrongful Death Act], the
        appellants, as Jack Cox’s intestate heirs, are allowed to recover for Jack
        Cox’s medical expenses, and Medicare’s subrogated right to recover those
        medical expenses is limited to $1,500 of the $181,187.75 which Medicare
        conditionally paid on Jack Cox’s behalf.               See Forsyth County v.
        Barneycastle, 18 N.C.App. 513, 197 S.E.2d 576, 579 ($1,500 limit on
        creditor’s right to recover strictly construed), cert. denied, 283 N.C. 752, 198
        S.E.2d 722 (1973). Thus compliance with Medicare’s secondary payer
        provisions, which mandates full payment for Jack Cox’s medical expenses
        from the $800,000 settlement, is impossible because of the NC Wrongful
        Death Act’s $1,500 limitation on the recovery of medical expenses.

        [T]he NC Wrongful Death Act’s $1,500 limit on Medicare’s right to receive
        payment for services from a NC Wrongful Death Act settlement is in direct
        conflict with Medicare’s secondary payer provisions which mandates full
        reimbursement. Consequently, to the extent the NC Wrongful Death Act
        limits Medicare’s right of recovery under the circumstances of this case to
        $1,500, the NC Wrongful Death Act is preempted. Accordingly, the district
        court correctly granted summary judgment to Secretary Shalala on her
        counter-claim.

112 F.3d at 155 (emphasis added).

        In her brief, appellant discusses the Cox case in detail, and accurately sets forth its

holding. But, we fail to see how anything set forth in the Cox case helps appellant in this

                                              16
case. The Maryland Act allows a plaintiff to obtain a judgment for past medical expenses

conditionally paid by Medicare and to recover every penny of medical expenses paid by or

on behalf of the plaintiff. Thus, unlike the situation in Cox, the plaintiff’s recovery for past

medical expenses is not artificially or arbitrarily reduced. The Maryland Act only restricts

verdicts by prohibiting a plaintiff from recovering medical expenses that were never

actually incurred. Unlike the North Carolina law discussed in Cox, the Maryland Act does

not conflict with the MSP provision that mandate full reimbursement of conditional

payments made by Medicare.

       At oral argument, appellant’s counsel argued that the legislative intent of the MSP

as expressed in the Federal Register (i.e., that provision of the MSP be construed to make

Medicare a secondary payer to the maximum extent possible) is just another way of saying

that the Congressional intent was that the Medicare program be reimbursed for conditional

payments “to the maximum extent possible.” We see no equivalency. The intent of the

MSP, insofar as it relates to this case, was “that the Medicare program be reimbursed

whenever a private insurer is obligated to pay medical costs.” Geier, 816 F. Supp. at 1337.

Clearly, that intent is not the same as an intent that the Medicare program be reimbursed

for conditional payments “to the maximum extent possible.” Moreover, there is no

indication that Congress’s paramount purpose was the one appellant advocates. As

appellant’s counsel admitted in oral argument, the federal government, if it wanted to do

so, could have required the beneficiary, after he or she makes a tort recovery for medical

expenses, to repay Medicare for its conditional payments in full – without making any

                                              17
deduction for procurement costs. If Congress had done so, as appellant admits, the

Maryland Act could be implemented without any effect on the amount Medicare would

recover. But the United States Department of Health and Human Services (HHS), the

governmental entity charged with implementing the MSP, chose to adopt 42 C.F.R. §

411.37(c).   That regulation requires HHS to share procurement costs under certain

circumstances. Adoption of 42 C.F.R. § 411.37(c) insured that HHS would not recover its

conditional payments “to the maximum extent possible” in situations where section

411.37(c) was applicable. If Congressional intent was the intent attributed to it by

appellant, it would be, to say the least, strange that 42 C.F.R. § 411.37(c) would have been

adopted. Furthermore, if appellant’s argument were to be accepted, a very odd type of

preemption would exist. The Maryland Act would only be preempted if the beneficiary

brought suit against the primary payer. But the Centers for Medicare & Medicaid Services

(“CMS”), on behalf of HHS, has the right to bring a direct action against any entity

responsible for payment of medical bills. See 42 U.S.C. § 1395y(b)(2)(B) and 42 C.F.R. §

411.24(e) (“CMS has a direct right of action to recover from any primary payer.”). If CMS

sued GBMC to recover the conditional payments, the Maryland Act would have no effect

because CMS could only collect the amount of medical bills it paid. Procurement costs

and write-offs (and thus the Maryland Act) would be irrelevant. It would be illogical to

resolve the preemption question by holding 1) that the Maryland Act is preempted in cases

where a beneficiary sues a primary payer and incurs procurement costs that must be paid,

                                            18
in part by CMS but 2) also holding that the Act is not preempted in cases where the CMS

sues the primary payer directly.

       There is another situation when the Maryland Act would be inapplicable: i.e., where

the amount recovered is equal to or less than the conditional payment, the regulations allow

the beneficiary to deduct all of the procurement costs from the amount received from the

primary payer, before paying Medicare the balance. 42 C.F.R. § 411.37(d). In such cases,

the Maryland Act does not impact the number entered into the formula. Therefore, as in

the cases where the CMS sued the primary payer directly, the Maryland Act has no effect

on how much the CMS collects.

       For all of these reasons, we reject appellant’s argument that Congress intended,

when it enacted the MSP, that Medicare be reimbursed for its conditional payments “to the

maximum extent possible.” Instead, Congress’s intent was that the MSP be construed to

make Medicare a “secondary payer to the maximum extent possible.” The Maryland Act

does not conflict with that intent.

       As both parties to this appeal admit, a state law may be preempted by federal law

when it conflicts in one of the following ways: (1) When the state law “sharply” interferes

with, or is directly contrary to a federal law; or (2) When compliance with both federal and

state law is a physical impossibility. Cox, 112 F.3d at 154. (State statute can be preempted

if it conflicts with federal law in one of two ways: “First, a conflict between state and

federal law can arise when compliance with both federal and state regulations is a physical

impossibility . . . [and second] when a state . . . statute ‘sharply’ interferes with, or is

                                            19
directly contrary to a federal law . . . .”)(citations omitted); Hosford v. Chateau Foghorn

LP, 229 Md. App. 499, 510, cert. granted sub nom. Chateau Foghorn v. Hosford, 455 Md.

462 (2017) (“conflict preemption applies either: (1) where it is impossible for a private

party to comply with both state and federal requirements, or (2) where state law stands as

an obstacle to the accomplishment and execution of the full purposes and objectives of

Congress”)(citations and quotation marks omitted.) In this case it is clear that the Maryland

Act does not “sharply” interfere with the MSP, nor is it directly contrary to a federal law.

This is shown by a close reading of the section of the MSP that spells out what amount

Medicare is entitled to recover when a plaintiff makes a recovery against a primary plan

such as GBMC’s self-insurance plan. A primary plan and an entity (such as appellant)

must reimburse Medicare “for any payment made” by Medicare “with respect to an item

or service if it is demonstrated that such primary plan has or had a responsibility to make

payment with respect to such item or service.” 42 U.S.C. § 1395y(b)(2)(B)(ii). The

payment made by Medicare for all items or services in this case was $157,730.75.

Therefore, GBMC’s obligation to repay Medicare is only $157,730.75 and the judgment

entered by the Circuit Court for Baltimore County requires this amount to be paid. Nor is

any provision of the Maryland Act “directly contrary” to federal law. Thus, compliance

with the Maryland Act and the MSP is not a “physical impossibility.”

       By the regulations adopted after the passage of the MSP, the Department of Health

& Human Services (HHS) developed the formula by which Medicare’s share of the

procurement cost is calculated and deducted from the recovery amount unless: 1) the CMS

                                             20
does not sue the primary payer directly, or 2) the amount recovered is equal to or less than

the conditional payment. We agree with GBMC that the fact that the Maryland Act impacts

the numbers being “entered into” that formula under certain circumstances does not create

a conflict with federal law.

       Besides its principal argument, discussed supra, appellant makes a separate

argument that is founded upon the fact that GBMC waited eleven days after the

$451,956.00 judgment was entered before filing its motion “to reduce verdict/judgment.”

Appellant asserts: 1) GBMC’s filing of a post-trial motion did not stop the 30 day appeal

period from running; and 2) instead, the 30 day appeal period expired on September 22,

2016, which was 30 days after the trial judge denied appellant’s (and other plaintiffs’)

motion for new trial or in the alternative an additur. Based on those assertions, appellant

argues:

       GBMC neither contested nor disputed the Judgment as to its liability in this
       case. GBMC’s status as a “primary payer” for Medicare’s conditional
       payments arose on September 22, 2016, when GBMC’s right to appeal from
       the Judgment fixing its liability expired. GBMC concedes that it’s only post-
       verdict Motion, requesting a reduction under § 3-2A-09(d)(1), was filed
       under Rule 2-535 only. These undisputed facts compel the conclusion that
       the trial court in this case applied § 3-2A-09(d)(1) to modify a final and non-
       appealable judgment, as distinguished from a verdict.

             This distinction between a verdict and a judgment is critically
       important to federal MSP preemption, because federal law establishes that
       Medicare’s right to reimbursement attaches when the responsibility of a
       primary payer has been “demonstrated,” e.g., by a judgment[.]

                                         *   *    *

       Under federal MSP law and regulations, therefore, a simple jury verdict
       against a primary plan (or primary payer) is insufficient; the verdict must be

                                             21
      reduced to a final, non-appealable judgment. When a final and non-
      appealable judgment binds a primary payer, that payer’s responsibility to
      reimburse conditional payments to Medicare is demonstrated under federal
      law.

      Federal preemption applies in this case because Medicare’s subrogation
      interest in the Judgment dated July 22, 2016, arose and existed under federal
      law before the trial court applied § 3-2A-09(d)(1) to reduce that Judgment.

(Footnote omitted.)

      The above argument contains one fatal flaw: the assertion that Medicare, as well as

appellant, had a “final, non-appealable” $451,956.00 judgment as of September 22, 2016

and therefore the trial judge applied the Maryland Act to “a final, non-appealable

judgment.” This flaw in appellant’s argument is demonstrated by the Court’s holding in

Gluckstern v. Sutton, 319 Md. 634 (1990). In Gluckstern, judgment was entered on January

27, 1988, but the petitioner waited twenty days after judgment to file a pleading that the

Court of Appeals treated as a Maryland Rule 2-535(a) motion to revise judgment. Id. at

646, 651. That judgment was revised, in part, on July 14, 1988. Id. at 646-47. Petitioner

filed his notice of appeal within thirty days of July 14, 1988. Id. at 647. The appellee in

Gluckstern contended that the appeal was not timely because it was not filed within thirty

days of January 27, 1988. The Gluckstern Court rejected appellee’s argument:

             As Dr. Gluckstern filed a timely motion to revise the judgment in
      accordance with Rule 2-535(a), as there was no timely notice of appeal prior
      to revision of the judgment, and as the judgment was in fact revised on July
      14, 1988, the order entered on July 14, 1988, became the final judgment. The
      controlling principles were set forth in Yarema v. Exxon Corp., [] 305 Md.
      [219,] 240-241, 503 A.2d at 250 [(1986)], as follows:

             “Rule 2-535(a), formerly number Rule 625a, authorizes the circuit
           court to exercise revisory power over a judgment on a motion filed within

                                            22
              thirty days from the judgment. Nevertheless, it is settled that neither the
              timely filing of a motion to revise a final judgment nor the court’s denial
              of such motion, absent an order staying the operation of the judgment,
              affects the finality of the judgment or the running of the time for appeal.
              Unnamed Atty. v. Attorney Griev. Comm’n, 303 Md. 473, 484, 494 A.2d
              940 (1985); Hardy v. Metts, 282 Md. 1, 5, 381 A.2d 683 (1978); Hanley
              v. Stulman, 216 Md. 461, 467, 141 A.2d 167 (1958). But when a motion
              under Rule 2-535(a) to revise a final judgment is filed within thirty days
              and the circuit court in fact revises the judgment, and there has been no
              intervening order of appeal, the prior judgment loses its finality and the
              revised judgment becomes the effective final judgment in the case.
              Unnamed Atty. v. Attorney Griev. Comm’n, supra, 303 Md. at 484, 494
              A.2d 940; Brown v. Baer, 291 Md. 377, 387, 435 A.2d 96 (1981).”

       Moreover, under circumstances like those in this case, as long as the motion
       to revise the judgment is filed within 30 days, the revised judgment need not
       be entered within 30 days of the original judgment. Brown v. Baer, supra,
       291 Md. at 387, 435 A.2d at 101.

              Consequently, Dr. Gluckstern’s notice of appeal, filed within 30 days
       of the revised judgment, was timely.

Id. at 651.

       The legal principle set forth in Gluckstern, as applied to this case, shows that

GBMC’s responsibility for payment of Ms. Bromwell’s medical expenses was not finally

“demonstrated” until October 31, 2016, the date the revised judgment was entered.

Contrary to appellant’s argument, the trial judge did not apply the Maryland Act “to a final,

non-appealable judgment.”7

       7
         In a case recently decided by the United State Court of Appeals for the Fourth
Circuit that involved the same parties as in this appeal, the Bromwell Estate contended, as
it does here, that the date of the final judgment in this case was not October 31, 2016. See
Netro, Personal Representative of the Estate of Barbara Bromwell v. Greater Baltimore
Medical Center, ______ F.3d. _____, No. 17-1597, slip op. 12 (4th Cir. June 4, 2018). The
Court rejected that contention for the same reason that we rejected it. Id.
                                              23
                                     CONCLUSION

         The MSP does not preempt any part of the Maryland Act. The purpose of the MSP

was to ensure that Medicare is the secondary payer of medical bills to the greatest extent

possible. The Maryland Act, as implemented by the trial judge in this case, in no way

interfered with, or conflicted with that purpose.

                                                    JUDGMENT AFFIRMED; COSTS
                                                    TO BE PAID BY APPELLANT.

2018-07-06
10:47-04:00

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