2:13-cv-06759
E.D. La.Dec 16, 2014Background
- Collins received medical benefits paid by Wellcare after an auto accident and deposited the payments into a separate account; Collinssued a declaratory judgment action in state court seeking to bar subrogation/reimbursement.
- Wellcare removed the case to federal court and asserted a federal MSP/MAO framework to seek reimbursement; Wellcare also asserted a counterclaim for recovery of its conditional payments.
- The Medicare Secondary Payer Act and MAO Statute are at issue, with Wellcare arguing MAO/MSP grants a private right of action to recover from a primary plan.
- Collins contends exhaustion under §405(g) is required to pursue Medicare remedies and that her action is grounded in state law and contract, not a benefit claim.
- The court must decide (i) whether Collins’ claim arises under the Medicare Act triggering administrative exhaustion; (ii) whether Wellcare has a private MSP/MAO-based right to reimbursement; (iii) whether Collins’ tort settlement constitutes a primary plan; (iv) whether Wellcare made a conditional payment; and (v) the proper scope of any reimbursement and prescription issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Exhaustion of administrative remedies control | Collins; not arising under Medicare; no exhaustion required | Wellcare; §405(h) requires exhaustion before federal review | Collins’ claim arises under Medicare; exhaustion required and claim dismissed. |
| Private right of action for MAOs under MSP or MAO Statute | MAO Statute does not create private action; private action barred absent MSPlanguage | MSP provides private action; MAO also supports private recovery rights | MSP private action applies; MAO Statute alone does not confer final private remedy; MSP provides basis for reimbursement action. |
| Whether tort settlement constitutes a primary plan | Settlement not a primary plan; cannot trigger MSP private action | Settlement funds sourced from primary plan; constitutes primary plan under MSP | Tort settlement constitutes a primary plan for MSP purposes; allows MSP claim analysis. |
| Conditional payment under MSP and whether Wellcare satisfied §1395y(b)(2)(A) | Wellcare’s payment must be conditional only if primary plan cannot pay promptly | Wellcare made a conditional payment; multiple inquiries not responded to by Collins do not negate condition | Wellcare made a conditional payment under §1395y(b)(2)(B)(i). |
| Double damages and prescription/amount of reimbursement | No double damages; reimbursement amount disputed; potential prescription issues | Double damages only for failure to reimburse; amount depends on settlement’s medical expense inclusion | Double damages not triggered; reimbursement amount remains disputed; prescription period analyzed but not dispositive. |
Key Cases Cited
- Parra v. PacifiCare of Arizona, Inc., 715 F.3d 1146 (9th Cir. 2013) (MAO private action; private right to reimbursement under MSP debated)
- Ardary v. Aetna Health Plans of California, Inc., 98 F.3d 496 (9th Cir. 1996) (claims arising from benefit administration not under Medicare Act may be excluded)
- In re Avandia Marketing Sales Practices and Products Liability Litigation, 685 F.3d 353 (3d Cir. 2012) ( Third Circuit on MSP/MAO rights; private action viability discussed)
- Michigan Spine & Brain Surgeons, PLLC v. State Farm Mutual Auto. Ins. Co., 758 F.3d 787 (6th Cir. 2014) (MSP private action applied to MAOs; non-group plans included)
- Bio-Medical Applications of Tennessee, Inc. v. Central States Southeast & Southwest Areas Health & Welfare Fund, 656 F.3d 277 (6th Cir. 2011) (MSP scope and primary plan definitions clarified)