115 F.4th 294
4th Cir.2024Background
- Carra Penegar, executrix of her husband Johnny Penegar’s estate, sued Liberty Mutual under the Medicare Secondary Payer Act (MSP Act) regarding reimbursement to Medicare for medical care paid for by Medicare.
- Johnny Penegar had received treatment for mesothelioma, with Medicare paying part of his medical expenses; he also brought a workers’ compensation claim against his employer and Liberty Mutual, but died before it resolved.
- The North Carolina Industrial Commission (NCIC) found Liberty Mutual liable for medical costs, ordering Liberty Mutual to reimburse third-party payors, including Medicare.
- After appellate affirmation, Penegar and Liberty Mutual settled the claims, with Liberty Mutual agreeing to pay $18,500 and to be responsible for any outstanding Medicare lien; it was asserted that no lien existed at settlement.
- Penegar later filed a putative class action under the MSP Act, claiming Liberty Mutual failed to reimburse Medicare and that she received a CMS letter demanding $18,500; Liberty Mutual reimbursed Medicare after the suit was filed.
- The district court dismissed Penegar's suit for lack of Article III standing, which she appealed to the 4th Circuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Penegar injured by Liberty Mutual's failure to reimburse Medicare (Netro analogy)? | Penegar claimed like Netro, she was owed money due under a judgment. | Liberty Mutual: Unlike Netro, NCIC ordered payment to Medicare, not Penegar directly. | Netro distinguishable; no injury to Penegar as payment wasn't owed to her. |
| Does a CMS demand letter establish an injury in fact? | The CMS letter created a concrete injury or risk of monetary harm. | Only a risk of future harm, not actual harm; Penegar paid nothing. | Risk of future harm alone insufficient for damages suit; no concrete injury suffered. |
| Can Congress, via MSP Act, create standing by conferring a cause of action? | Statutory cause of action alone sufficed for Article III standing. | Article III still requires actual injury in fact; statutory violation isn't enough. | Statutory right alone not sufficient; concrete harm required by Article III. |
| Did Penegar suffer unreimbursed out-of-pocket expenses? | Alleged she incurred co-pays/deductibles not yet reimbursed. | Any such expenses were reimbursed prior to suit under NCIC and settlement. | Any pocketbook injury was redressed before the suit was filed, so she lacked current injury. |
Key Cases Cited
- Netro v. Greater Balt. Med. Ctr., Inc., 891 F.3d 522 (4th Cir. 2018) (Medicare beneficiary had standing where judgment ordered payment directly to her)
- TransUnion LLC v. Ramirez, 594 U.S. 413 (2021) (Art. III requires concrete injury, even for statutory violations)
- Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) (Statutory violations must still meet constitutional standing requirements)
- Clapper v. Amnesty Int’l USA, 568 U.S. 398 (2013) (Risk of future harm not concrete injury for damages)