In Re Avandia Marketing, Sales Practices & Products Liability Litigation
2012 U.S. App. LEXIS 13230
| 3rd Cir. | 2012Background
- Humana filed a class action alleging Glaxo privately reimburses MAOs for Avandia injuries to Humana enrollees; Glaxo is a self-insured primary payer under MSP Act sets aside settlements with Medicare; MAOs administer Medicare benefits under Part C and may seek reimbursement from primary payers; district court dismissed, holding MSP Act private action not available to MAOs due to MAO secondary payer provision; Humana appeals arguing MSP Act §1395y(b)(3)(A) text and CMS regulations grant MAOs a private right of action; court must determine whether MAOs have private right of action for double damages under MSP Act when primary payer fails to reimburse
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MSP Act §1395y(b)(3)(A) creates a private right of action for MAOs | Humana argues MAOs fall within private action scope | Glaxo contends MAOs are not covered by private action | MAOs have private right of action under MSP Act |
| Whether CMS regulations deference compels recognizing MAO private action | CMS regs extend MSP rights to MAOs | Regulations merely interpret but do not create rights | Chevron deference applies; CMS regs support MAO action |
| Whether MAO secondary payer provision alters MSP Act interpretation | MSP text broad enough to include MAOs | MAO provision does not create private remedy; interaction with MSP Act uncertain | MSP Act text broad enough to include MAOs; not undermined by MAO provision |
| Whether district court properly refused equitable relief and standing considerations | Humana seeks disclosure and reimbursement; has standing | Equity relief not available; state-law limitations apply | Not necessary to address equity; MSP action available to Humana |
| Whether other cases support or undermine MAO private rights interpretation | Precedents do not foreclose MAO action under MSP Act | Some circuits limit private actions under MSP Act | Existing authorities do not defeat MAO private action; court aligns with Humana |
Key Cases Cited
- Care Choices HMO v. Engstrom, 330 F.3d 786 (6th Cir. 2003) (implied private right of action not recognized for Care Choices)
- Bio-Medical Applications of Tenn., Inc. v. Central States Health and Welfare Fund, 656 F.3d 277 (6th Cir. 2011) (MSP demonstrates responsibility not applicable where primary payer is insurer; MAOs distinguished)
- Stalley v. Methodist Healthcare, 517 F.3d 911 (6th Cir. 2008) (MSP private action to recover conditional payments discussed in context of private actions)
- Glover v. Liggett Group, Inc., 459 F.3d 1304 (11th Cir. 2006) (MSP private action framework referenced in discussion of double damages)