Trial lawyers to benefit from Obamacare

Walter Olson:

Just before the House leadership's 794-page health care reform bill went to a Ways & Means markup last Thursday, a remarkable provision was slipped in that amounts to one of the more audacious and far-reaching trial lawyer power grabs seen on Capitol Hill in a while. Republicans managed to fend it off for the moment--but don't be surprised if it shows up again down the road in some form.
The provision would have drastically widened the scope of lawsuits against what are known as Medicare third-party defendants. In the simplest scenario, Medicare has paid the bills of someone injured in, say, a car accident, and then learns that the beneficiary has successfully sued and obtained damages from the other driver. Sometimes at this point Medicare (i.e., the government) demands that the beneficiary hand over some or all of the settlement toward the cost of the health care. Under some conditions, however, it is also free to file its own lawsuit to recover the medical outlays directly from the negligent driver (who in some circumstances might even wind up covering the same medical bills twice). It might file suit directly if, for example, it does not expect to get a collectible judgment from the beneficiary. ...
The language slipped into the health bill would ... allow freelance lawyers to file them on behalf of the government--without asking permission--and collect rich bounties if they manage thereby to extract money from the defendants. Lawyers will recognize this as a "qui tam" procedure, of the sort that has led to a growing body of litigation filed by freelance bounty hunters against universities, defense contractors and others alleged to have overcharged the government. ...
Freelance private lawyers could and often would sue everyone in sight and employ the most hardball tactics along the way. If the language about epidemiological and statistical evidence is indeed meant to pave the way for future suits against liquor, gun or cheeseburger purveyors, it represents a stealth attempt to restore (via fine print) a lawyerly dream that the courts have almost uniformly rejected over the past decade, as well as personally enrich lawyers with fees that could soar beyond even those of the scandalous tobacco-Medicaid litigation.