300 F. Supp. 3d 367
D. Conn.2018Background
- Aetna (a Medicare Advantage Organization) paid $9,854.16 for medical care for Nellina Guerrera after a February 20, 2015 injury at a Big Y store; Guerrera later settled her claim with Big Y for $30,000.
- Aetna alleges it notified defendants (Guerrera, her counsel Carter Mario/Hammil/Wisniowski, and Big Y) of an Aetna lien and sought reimbursement, but Big Y paid the full settlement to Guerrera/attorneys without addressing Aetna's lien.
- Aetna sued under the Medicare Secondary Payer (MSP) Private Cause of Action (42 U.S.C. § 1395y(b)(3)(A)) and brought related state-law claims (contract, restitution, fiduciary duty, etc.).
- Defendants moved to dismiss for lack of subject-matter jurisdiction and for failure to state an MSP claim, and asked the court to decline supplemental jurisdiction over state claims.
- The court held it has federal-question jurisdiction, concluded MAOs may sue under the MSP private cause of action, dismissed MSP claims against Guerrera and her attorneys, but denied dismissal as to Big Y (finding Big Y adequately pled as a "primary plan" and that its settlement payment could be insufficient "appropriate reimbursement").
- The court denied Aetna’s proposed amended complaint as unnecessary but granted leave to replead to clarify which claims are federal vs. state and the parties targeted by state claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal question jurisdiction exists over MSP-based claim | Aetna: MSP claim raises a federal question; federal court can decide whether MAOs have a private right | Defs: Case is essentially state contract law; no federal jurisdiction | Court: Federal-question jurisdiction exists; jurisdictional challenge is better viewed as merits challenge |
| Whether an MAO (Aetna) may sue under MSP private cause of action §1395y(b)(3)(A) | Aetna: Private cause of action covers MAOs; CMS regs (42 C.F.R. §422.108(f)) support this | Defs: Statute does not expressly name MAOs; regs cannot create a right | Court: MAOs may bring suit under the private cause of action; regulation deference (Chevron) supports this if ambiguous |
| Against whom private-action claims may be brought (primary plans vs. beneficiaries/attorneys) | Aetna: May sue tortfeasor, beneficiary, and beneficiary’s counsel for reimbursement | Defs: Private cause of action targets only primary plans; beneficiaries/attorneys are not proper targets for double damages | Court: Private cause of action permits double damages only against primary plans (as defined by MSP); dismissed MSP claims against Guerrera and her attorneys |
| Whether Big Y is a primary plan and failed to provide "appropriate reimbursement" | Aetna: Big Y paid settlement to Guerrera despite notice and thus failed to reimburse Aetna; settlement payment can trigger primary-plan responsibility | Defs: Big Y is not a primary plan; complaint lacks allegations labeling Big Y as such | Court: Allegation that Big Y paid a settlement plausibly pleads it is a (self-insured) primary plan and that paying the beneficiary/attorney without reimbursing Aetna may be insufficient "appropriate reimbursement" under CMS regs; MSP claim against Big Y survives |
Key Cases Cited
- Parra v. PacifiCare of Arizona, Inc., 715 F.3d 1146 (9th Cir. 2013) (federal question jurisdiction exists to interpret Medicare Act; facts where private action not triggered absent claim against primary plan)
- In re Avandia Mktg., 685 F.3d 353 (3d Cir. 2012) (interpreting MSP private cause of action broadly to permit non-governmental actors to sue)
- Humana Med. Plan, Inc. v. Western Heritage Ins. Co., 832 F.3d 1229 (11th Cir. 2016) (MAOs may sue under MSP private cause of action; settlement to beneficiary insufficient to satisfy reimbursement duties)
- Mason v. American Tobacco Co., 346 F.3d 36 (2d Cir. 2003) (discussion on MSP limits prior to 2003 amendment; not dispositive here)
- Woods v. Empire HealthChoice Assurance, Inc., 574 F.3d 92 (2d Cir. 2009) (private cause of action is not qui tam; allows recovery from primary plans where private plaintiff suffered injury)