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District Court Dismisses Medicare's Suit Seeking Reimbursement from Defendants, Insurers And Attorneys
In September 2003, several chemical companies and their insurers entered into a settlement to resolve class action claims related to alleged exposure to polychlorinated biphenyls (PCBs) in Alabama. The chemical companies and their insurers settled these claims for $300 million, in what is commonly referred to as the Abernathy settlement. The plaintiffs' attorneys in Abernathy received the proceeds of the settlement in their escrow accounts, from which they ultimately distributed settlements to individual claimants and obtained their fees, allegedly without reimbursing Medicare for medical payments associated with the plaintiffs' claims.
In December 2009, the U.S. government filed suit against chemical companies, insurers and several plaintiffs' attorneys who participated in the Abernathy settlement. United States of America v. Stricker, et al., No. 09-2423 (N.D. Ala. filed Dec. 1, 2009). In Stricker, Medicare sought reimbursement for payments that it had allegedly made for medical care provided to the settling class members. Medicare contended that the defendants and the insurers who participated in the Abernathy settlement were liable to Medicare for up to double the amount of medical expenses incurred by Medicare, under the Medicare Secondary Payer statute. Stricker was filed more than six years after the Abernathy settlement was approved by the court, and after more than 90% of the settlement funds were deposited into escrow.
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