6-29-2011; Medicare Set-Aside Specialist Shawn R. Biery reports more items of interest with regard to Medicare and the ongoing changes and hearing before the House Energy and Oversight Committee...

As previously reported weeks ago, hearings were being conducted in Washington D.C. which are of interest to all involved with Medicare repayment and MSA issues. A hearing was conducted by the Subcommittee on Oversight and Investigations, Committee on Energy and Commerce on Wednesday June 22, 2011 at the Rayburn Building in Washington D.C., to discuss H.R. 1063, the Strengthening Medicare and Repaying Taxpayers Act.

Barbara Taylor, Chief Financial Officer and Director, Office of Financial Management for Center for Medicare and Medicaid Services (CMS) testified as well as James C. Cosgrove, Director, Health Care, United States Government Accountability Office. Ms. Taylor and Mr. Cosgrove entered written statements and were then questioned by the Subcommittee members. Ms. Taylor testified that Medicare is responsible for approximately 413,000 Secondary Payer claims and acknowledged that the implementation of Mandatory Insurer Reporting has doubled the CMS workload over the last eighteen months. She estimated CMS has recovered $600,000,000.00 as a result of the CMS conditional payment recovery efforts, however she wasn’t able to respond appropriately to many questions regarding delays in response as well as thresholds of the conditional payment claims sought to be recovered, the average response time of the Medicare Secondary Payer Recovery Contractor MSPRC or the rejection rate of data electronically transferred to Medicare which may trigger recovery efforts. She acknowledged "problems" including the fact that the MSPRC is overwhelmed with their workload. Mr. Cosgrove essentially advised the Subcommittee that he was unable to objectively measure the performance of CMS and was unable to testify about the efficiency of the process. He noted five elements within the system: notification, negotiation, resolution, reporting and recovery. However, it was also noted that they have been unable to gather data to quantify the process and its effect on beneficiaries or the Medicare Trust Fund.

All reports confirm the Subcommittee, particularly Chairman Cliff Stearns (R-FL), seemed quite unsatisfied with the CMS presentation and the lack of concrete data or knowledge of MSPRC performance, the amount of potential recovery dollars, and the reasons for the 120-150 day lag in requests for conditional payment information and its receipt.  Other witnesses, including Marc Salm, Vice President of Risk Management for Publix Supermarkets; Scott Gilliam, Vice President and Government Relations Officer for Cincinnati Insurance Companies; Jason Matzus, a Personal Injury Attorney at Raizman, Frischman & Matzus and Ilene Stein, Federal Policy Director for the Medicare Rights Center testified generally to procedural roadblocks and lack of standard thresholds or guidelines as well as CMS and MSPRC lack of responsiveness and its effect.

6-29-2011; Another U.S. Supreme Court decision of note for railroad liability in worker injuries

In CSX Transp., Inc. v. McBride, our highest court found common-law proximate cause is not required to establish liability under FELA and our highest court rules if employer negligence played any part, even the slightest, in producing injury or death, damages will lie. The decision is online at: http://www.supremecourt.gov/opinions/10pdf/10-235.pdf

An employee who worked as a locomotive engineer for a railroad carrier brought an action against his employer under FELA, seeking compensation for a hand injury that he sustained while performing switching operations. After declining to give the "proximate cause" jury instruction requested by the carrier, the Federal District Court employed the Seventh Circuit's pattern instruction for FELA cases which says: "Defendant caused or contributed to Plaintiff's injury if Defendant's negligence played a part-no matter how small-in bringing about the injury." The jury returned a verdict for the employee.

On appeal, the Seventh Circuit Court of Appeals approved the District Court's causation instruction and affirmed the judgment entered on the jury's verdict, noting in Rogers v. Missouri Pac. R. Co., the U.S. Supreme Court had relaxed the proximate cause requirement in FELA cases. Certiorari was granted by our highest court.

Section 1 of FELA, 45 U.S.C.A. 51, provides, in relevant part: "Every common carrier by railroad ... shall be liable in damages to any person suffering injury while he is employed by such carrier ... for such injury or death resulting in whole or in part from the negligence of any of the officers, agents, or employees of such carrier.... " FELA was enacted in response to the exceptionally hazardous nature of the railroad business at the dawn of the twentieth century, Justice Ginsburg observed, writing for the Court.

Given the breadth of FELA's causation language, and Congress' humanitarian and remedial goals in enacting the statute, a "relaxed standard" of causation applies under FELA in comparison to tort litigation at common law. In describing that standard, the Rogers court stated: " 'Under FELA the test of a jury case is simply whether the proofs justify with reason the conclusion that employer negligence played any part, even the slightest, in producing the injury or death for which damages are sought.' " The Seventh Circuit's causation language tracked this language from Rogers.

The carrier did not ask the Court to disturb Rogers, but contended lower courts overread that opinion, which, the carrier asserted, was a narrowly focused decision that did not displace common-law formulations of "proximate cause" except with respect to recovery for injuries involving contributory negligence or other "multiple causes."

 Justice Ginsburg disagreed. Given the facts of that case, as well as the statutory history and precedent on which it drew, "Rogers is most sensibly read as a comprehensive statement of the FELA causation standard." It was not addressed exclusively to injuries involving multiple potentially cognizable causes but, rather, announced "a general standard for causation in FELA cases." Moreover, Justice Ginsburg noted, "in reliance on Rogers, every Court of Appeals that reviews judgments in FELA cases has approved jury instructions on causation identical or substantively equivalent to the Seventh Circuit's instruction," and each federal appellate court has rejected common-law formulations of proximate cause equivalent to the Seventh Circuit's instruction.

 In sum, the understanding of Rogers affirmed by the Court has been accepted as settled law for several decades, both by the courts and by Congress, which, despite having had more than 50 years to correct the Rogers decision if it wished to do so, had not acted.

Justice Thomas joined in the Court's opinion in part. Chief Justice Roberts, joined by Justices Scalia, Kennedy, and Alito, filed a dissenting opinion, criticizing the Court for dispensing with the familiar "proximate cause" element of an action seeking recovery for negligence and characterizing the standard adopted by the Court as "simply 'but-for' causation."

6-29-2011; The Wal-Mart v. Dukes class action ruling is good news for large employers in general; employees may have a much harder burden to certify a large class under the Federal Rules

Confirming a longstanding practice of the Federal Courts to limit class action suits and subject class certification to a greater investigation than the state courts, the ruling earlier this week in Wal-Mart v. Dukes reasserts the difficulty of certifying a class when there is no coherent commonality at issue. It’s a bit of a mixed bag for retail giant Wal-Mart – although they are no longer facing the largest class action suit in U.S. history, they are now facing potentially thousands of lesser similar claims by groups or individuals.

For corporate risk and employment practices managers across the U.S., all of this comes down to documentation, documentation and more documentation. We are confident any judgment coming from a class action this big might have been a business-busting billion-dollar verdict. It is crucial to be able to show your company doesn’t have a broad policy of ignoring complaints of discrimination.

A unanimous Supreme Court held a class of over one and a half million plaintiffs (current and former female employees of Wal-Mart) was improperly certified. It was a split decision however, in regard to how the Court got to that point. The majority decision is what we feel will control the future case law and it hinged on the “commonality” of the claims. What does that mean in laymen’s terms? In order to be certified as a “class” under the federal rules, a set of plaintiffs must do more than ask broad questions and make broad and generalized allegations. There must be some defining features of the plaintiff’s claim in common – that point to a common set of facts surrounding each instance of alleged discrimination.

Justice Scalia, writing for the Court, commented on how the courts must perform a “rigorous analysis” of the claim, requiring exploration of the claims. At times, this “will entail some overlap with the merits of the plaintiff’s underlying claim. That cannot be helped.” In the matter at bar, Plaintiffs did not allege any express corporate policy against the advancement of women, and there was no uniform policy leading to a gender bias. Their allegations were based on the claim their local managers’ discretion over pay and promotions was exercised disproportionately in favor of men, leading to an unlawful disparate impact on female employees. They alleged this occurred in all Wal-Mart stores and alleged a “corporate culture” of a bias toward female employee advancement, if only on a subconscious level.

The Court held “the mere claim by employees of the same company that they have suffered a Title VII injury, or even a disparate-impact Title VII injury, gives no cause to believe that all their claims can productively be litigated at once.”  The Court further held Plaintiffs’ “claims must depend upon a common contention—for example, the assertion of discriminatory bias on the part of the same supervisor.”  Most significant to the holding, the Court ruled “[t]hat common contention . . . must be of such a nature that it is capable of class wide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.”

The Court pointed out the most significant question in a Title VII inquiry is “the reason for a particular employment decision,” and noted Plaintiffs were trying to sue for millions of employment decisions, all at once. The holding was essentially stating without some glue holding together the alleged reasons for those decisions, it would be impossible to say examination of all the class members’ claims would produce a common answer to the crucial discrimination question.

This points directly to the discretionary aspect of the managers’ decisions. Justice Scalia dismissed the anecdotal evidence filed by Plaintiffs, stating “Wal-Mart’s ‘policy’ of allowing discretion by local supervisors over employment matters” was “just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices.”  Scalia also relied on the fact that Wal-Mart has a written policy of non-discrimination.

Ultimately, this ruling makes it more difficult to certify a broad class. There will have to be a certain policy or practice to point to at a centralized structure in order to bind together a class of Plaintiffs. Now, Wal-Mart may still be facing multiple smaller suits arising from local facilities, but those individual claims will be far easier to investigate.

This article was written by Arik D. Hetue, J. D. who can be reached at ahetue@keefe-law.com. Feel free to post comments on our blog at: http://keefe-law.com/kcablog.html