Michigan Spine & Brain Surgeons, PLLC v. State Farm Mutual Automobile Insurance, 2014 U.S. App. LEXIS 13499

After a 2010 auto accident, Michigan Spine provided ~$26,000 in treatment to State Farm’s insured, Jean Warner; State Farm denied coverage as preexisting and Michigan Spine sought payment from Medicare, which made ~$5,000 in conditional payments under the Medicare Secondary Payer (MSP) Act.
Michigan Spine sued State Farm in state court asserting a state No‑Fault Act claim and an MSP Act private cause of action for failure to reimburse; State Farm removed to federal court.
The district court, relying on Bio‑Medical Applications of Tennessee, Inc. v. Central States, granted dismissal of the MSP claim, reasoning MSP liability requires a primary plan to have denied coverage based on Medicare eligibility (the group‑plan requirement in 42 U.S.C. § 1395y(b)(1)).
Michigan Spine appealed, arguing the MSP private cause of action applies to non‑group primary plans (e.g., no‑fault insurers) even when coverage was denied for reasons other than Medicare eligibility.
The Sixth Circuit analyzed the MSP statute, related regulations, Chevron deference, and congressional purpose, and concluded paragraph (1)’s Medicare‑eligibility/non‑discrimination rule applies only to group health plans, not to non‑group primary plans like State Farm.
The Sixth Circuit reversed the district court and remanded, holding Michigan Spine may pursue its MSP claim against State Farm despite the denial being for a preexisting‑condition reason.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a private MSP cause of action is available against a non‑group primary plan that denied coverage for a reason other than Medicare eligibility	MSP private right applies to non‑group primary plans; paragraph (1)’s Medicare‑eligibility rule governs group plans only, so Michigan Spine can sue State Farm	MSP private right requires a primary plan to have violated both ¶(1) (group‑plan Medicare‑eligibility non‑discrimination) and ¶(2)(A); because State Farm denied coverage for a preexisting condition, not Medicare eligibility, MSP claim fails (per Bio‑Medical)	The court held ¶(1) applies only to group health plans; non‑group primary plans can be sued under the MSP private cause of action when their conduct causes Medicare to make conditional payments, even if denial was for non‑Medicare‑eligibility reasons

Bio‑Medical Applications of Tenn., Inc. v. Cent. States Se. & Sw. Areas Health & Welfare Fund, 656 F.3d 277 (6th Cir. 2011) (interpreting MSP private cause of action and group‑plan nondiscrimination language)
Stalley v. Methodist Healthcare, 517 F.3d 911 (6th Cir. 2008) (background on MSP primary/secondary payer scheme)
United States v. Atl. Research Corp., 551 U.S. 128 (2007) (statutory interpretation principle against rendering provisions inoperative)
In re Avandia Mktg., Sales Practices & Prods. Liab. Litig., 685 F.3d 353 (3d Cir. 2012) (permitting MSP claims against non‑group plans without Medicare‑eligibility denial evidence)
Manning v. Utilities Mut. Ins. Co., 254 F.3d 387 (2d Cir. 2001) (allowing MSP private suits against non‑group primary plans)