Duplechain v. Jalili

• Decision Date: 08 December 2010
• Docket Number: No. 10-736.,10-736.
• Citation: 52 So.3d 1072
• Parties: Kenneth DUPLECHAIN, et al. v. Firooz JALILI, et al.
• Court: Court of Appeal of Louisiana — District of US

52 So.3d 1072

Kenneth DUPLECHAIN, et al.
v.
Firooz JALILI, et al.

No. 10-736.

Court of Appeal of Louisiana,
Third Circuit.

Dec. 8, 2010.

52 So.3d 1074

Steven Broussard, Sulphur, LA, for Plaintiff/Appellant-Kenneth, Duplechain, et al.

John Elliott Baker, Special Assistant Attorney General, Covington, LA, for Defendant/Appellee, State of Louisiana.

Randall Earl Hart, Broussard & Hart, LLC, Charles, LA, for, Plaintiff/Appellant, Kenneth Duplechain, et al.

Nadia Marie de la Houssaye, Jones, Walker, Waechter, Poitevent, Carrère & Denègre, L.L.P., Lafayette, LA, for Defendant/Appellee, Louisiana Patients' Compensation Fund.

Court composed of ULYSSES GENE THIBODEAUX, Chief Judge, MARC T. AMY, and BILLY HOWARD EZELL, Judges.

THIBODEAUX, Chief Judge.

**1 The plaintiffs-appellants, Cynthia Duplechain, individually and in her capacity as the administratrix of the estate of her minor son, Conner Duplechain, and Kenneth Duplechain (the Duplechains), appeal the denial of their motion for summary judgment. The Duplechains' motion

52 So.3d 1075

sought a determination that they were entitled to recover legal interest on medical bills paid by Medicaid through the Louisiana Department of Health and Hospitals (DHH/Medicaid). The defendant-appellee from whom the interest is sought in this matter is the Louisiana Patients' Compensation Fund (PCF).

The trial court found that the Duplechains were required to assign their recovery rights to DHH/Medicaid and that they had no right to recover legal interest on the medical payments made by DHH/Medicaid. Finding that the trial court erred as a matter of law in interpreting the applicable statutes, we reverse the judgment of the trial court and grant summary judgment in favor of the Duplechains.

I.

ISSUE

We must decide whether the trial court erred as a matter of law in denying summary judgment to the plaintiffs on the issue of whether legal interest is due on medical bills paid by Medicaid.

II.

FACTS AND PROCEDURAL HISTORY

In December of 2003, five-month-old Conner Duplechain was severely injured when Dr. Firooz Jalili, a pediatric gastroenterologist, perforated Conner's esophagus during a routine endoscopy. Dr. Jalili mistakenly inflated Conner's mediastinum and blocked blood flow to Conner's heart, putting him in cardiac arrest **2 and leaving him with a severe and irreversible hypoxic brain injury. Seven years later, Conner is fed through a tube, is cortically blind, cannot walk, talk, or sit up, and his condition is permanent.

The Duplechains filed a claim with the PCF. The Medical Review panel found in favor of Dr. Jalili. The Duplechains filed suit, and DHH/Medicaid filed an intervention for the $96,070.32 that it had paid in medical bills on behalf of Conner. Five years later, after the Duplechains had accumulated litigation expenses estimated at over $120,000.00, Dr. Jalili settled his liability in the case for $100,000.00. The Duplechains sought all remaining damages from the PCF, with full legal interest on their damages. They entered into a partial settlement with the PCF on all issues except (1) past custodial care costs, plus interest, and (2) the legal interest on the portion of damages paid by Medicaid.

On May 19, 2009, a judgment was rendered granting Mrs. Duplechain the authority to settle the claims against Dr. Jalili and the PCF for $1,020,000.00. The PCF funded the settlement, including the $96,070.32 Medicaid lien. The PCF paid legal interest on $400,000.00 in general damages and on $279,999.88 in medical bills paid by an ERISA lienholder, Blue Cross/Blue Shield of Georgia.

The Duplechains negotiated with DHH/Medicaid for a lien reduction and ultimately paid Medicaid $86,463.29. Hence, the Medicaid lien has been reimbursed, and DHH/Medicaid is not making a claim for any additional funds.

The PCF ultimately settled with the Duplechains for the past custodial care, plus interest, and the only claim remaining for trial was the legal interest on the Medicaid-paid damages of $96,070.32. The Duplechains filed a motion for summary judgment on that issue, and the trial court entered a judgment denying their motion in February of 2010. The Duplechains filed this appeal on the denial of their motion **3 for summary judgment on the issue of legal interest on Medicaid-paid damages. This is a matter of first impression. Finding no support for the trial court's judgment, and finding error in the trial court's interpretation of the applicable

52 So.3d 1076

statutes, we reverse for the reasons more fully set forth below.

III.

LAW AND DISCUSSION

Standard of Review

When an appellate court finds that a reversible error of law was made in the trial court, it must conduct a de novo review of the entire record. Rosell v. ESCO, 549 So.2d 840 (La.1989). Appellate courts perform a de novo review upon a motion for summary judgment. Guilbeaux v. Times of Acadiana, Inc., 96-360 (La.App. 3 Cir. 3/26/97), 693 So.2d 1183, writ denied, 97-1840 (La.10/17/97), 701 So.2d 1327.

The Trial Court's Judgment

The Duplechains contend that the trial court erred as a matter of law when it ruled that legal interest does not accrue in favor of the plaintiffs on medical bills paid by Medicaid. We agree. In its judgment denying the plaintiffs' motion for summary judgment, the trial court stated:

This court finds that legal interest in favor of the Plaintiffs is not earned on the amounts paid by Medicaid. Because the statutes governing Medicaid require the Plaintiffs to assign recovery rights to the Louisiana Department of Health and Hospitals, Plaintiffs have no right to recover legal interest on such sums.

The trial court's judgment reflects an erroneous interpretation and application of the Medicaid statutes. DHH/Medicaid was reimbursed in this case; its lien or privilege was paid. Therefore, neither the right to recovery by DHH/Medicaid, nor the assignment of rights by the plaintiffs is at issue.

**4 More specifically, La.R.S. 46:446(A) provides DHH/Medicaid with a right of intervention and a right of recovery against liable third parties for amounts paid by Medicaid on behalf of the tort victim. Likewise, La.R.S. 46:446(F) creates a privilege in favor of Medicaid to be reimbursed its payments out of any recovery the tort victim collects from a third person or insurance company, whether by judgment or settlement or tender. In general, this means that Medicaid gets reimbursed before the tort victim takes ownership of the proceeds of his or her claim. However, the privilege is not exclusive, nor is it first-ranked, as La.R.S. 46:446(F) specifically places the attorney's privilege over that of Medicaid. Additionally, La.R.S. 46:446(H) holds third parties, insurers, and attorneys responsible to DHH/Medicaid for reimbursement of the lien for the amount of the privilege.

The Medicaid statutes further provide that where Medicaid has paid for health care items or services furnished to an individual, and a third party has legal liability to make those payments, "the state [DHH] is deemed to have acquired the rights of the individual to payment by any other party for those health care items or services." La.R.S. 46:446.2(D). Additionally, La.R.S. 46:153(E) provides that the Medicaid recipient "shall be deemed to have made an assignment to the department [DHH] of his right to ... benefits owed ... by any third party." Hence, there is a statutory assignments of rights to DHH/Medicaid until Medicaid is reimbursed, but the assignment of rights has nothing to do with legal interest owed by the tortfeasor.

In this case, the Duplechains satisfied the Medicaid lien and extinguished their assignment of rights to DHH/Medicaid when their attorney wrote a check for $86,463.29 to DHH/Medicaid on June 5, 2009, before the plaintiffs received the funds from PCF in July 2009. DHH/Medicaid is not asserting a claim for legal interest or additional funds in this case, and any assignment or obligation by **5 the

52 So.3d 1077

plaintiffs has been fulfilled. Accordingly, as indicated above, neither DHH/Medicaid's recovery rights nor the plaintiffs' assignment of rights is at issue.

The trial court concluded that any interest owed on the Medicaid payment would be owed to DHH, not to the plaintiffs. This is also error. Louisiana Revised Statutes 46:446.6(B)(2) (emphasis added) provides that any health insurer must "[a]ccept the department's [DHH's] right of recovery and the Medicaid recipient's assignment to the department of any right to payment from the health insurer for an item or service for which payment has been made under the [Medicaid] Program." The recovery of Medicaid benefits from a recipient's settlement of a tort claim is limited to the medical expenses allocated in the settlement. Weaver v. Malinda, 07-708 (La.App. 5 Cir. 2/19/08), 980 So.2d 55. Weaver relied upon Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268, 126 S.Ct. 1752, 164 L.Ed.2d 459 (2006).

In Ahlborn, the United States Supreme Court held that the federal Medicaid law did not authorize an Arkansas state agency to assert a lien on a Medicaid recipient's settlement with third-party tortfeasors in an amount exceeding the portion of the settlement representing medical expenses. The court held that 42 U.S.C. § 1396p, the federal anti-lien provision, affirmatively prohibited the state Medicaid agency, the Arkansas Department of Health and Human Services (ADHS), from asserting a lien for a larger amount.

The Ahlborn court further found that the federal third-party liability provisions of the Medicaid statute, 42 U.S.C. § 1396k(a)(1)(A), required only that recipients "assign the State any rights ... to payment for medical care from any third party," not that they assign rights to other forms of payment. Further, where the tortfeasor settled for only one-sixth of Ahlborn's overall damages, and the state **6 stipulated that only $35,581.47 of the settlement was for medical expenses, the state was limited to that amount, even though Medicaid had paid $215,645.30...