In the past, it was unclear if Medicare Advantage Plans (MAPsMedicare Advantage Plans) had recovery rights under MSPMedicare Secondary Payer Act. MAPsMedicare Advantage Plans would issue lien demands claiming that they had recovery rights under the Medicare Secondary Payer Act (MSPMedicare Secondary Payer Act) in an effort to obtain reimbursement of payments made by the MAPMedicare Advantage Plan. Due to the ambiguity surrounding MAPsMedicare Advantage Plans recovery rights, primary payers would yield to the demands of MAPsMedicare Advantage Plans to avoid a Federal cause of action by the MAPMedicare Advantage Plan for recovery before satisfying other lien holders. However, an increasing recent amount of case law is depicting a trend that MAPsMedicare Advantage Plans do not have direct recovery rights under the MSPMedicare Secondary Payer Act in Federal court, and that MAPsMedicare Advantage Plans must pursue reimbursement of payments in State court just like other traditional lien holders. This holding was brought about again in the case of In Re Avandia Marketing, 2011 U.S. Dist. LEXIS 63544, United States District Court, Eastern District of Pennsylvania.
This case involved GlaxoSmithKline (GSK), who is the Defendant in thousands of cases brought by individuals alleging that they suffered personal injury from the use of GSK’s diabetes medication, Avandia. On behalf of its MAPMedicare Advantage Plan plans such as Humana Medical Plan, Inc. and Humana Insurance Co. (Humana), Humana filed a complaint to enforce its claimed rights as a secondary payer under the MSPMedicare Secondary Payer Act and to seek reimbursement for costs Humana incurred to cover treatment for Avandia-related illnesses and injuries on behalf of settling MAPMedicare Advantage Plan enrollees. GSK filed a motion to dismiss the Plaintiffs’ claims for failure to state a claim upon which relief can be granted, specifically stating that the MSPMedicare Secondary Payer Act does not create a private cause of action for MAPsMedicare Advantage Plans and therefore the Court does not have jurisdiction over Humana’s claim for reimbursement. Additionally, the Plaintiff sought equitable relief, which would compel GSK to provide Humana with a list of settling Humana enrollees.
The court analyzed the MSPMedicare Secondary Payer Act, specifically the private cause of action provided under the Act, located at 42 U.S.C. § 1395y(b)(3)(A). The court not only found that the private cause of action right does not apply to an MAPMedicare Advantage Plan, but also found that the MSPMedicare Secondary Payer Act as a whole does not apply to an MAPMedicare Advantage Plan such as Humana. The court further opined that although MAPsMedicare Advantage Plans are a secondary payer, the MSPMedicare Secondary Payer Act does not provide for a direct cause of action for MAPsMedicare Advantage Plans to recover conditional payments under the MSPMedicare Secondary Payer Act.
The court further found that the silence of Congress regarding private remedies for MAPsMedicare Advantage Plans within the MSPMedicare Secondary Payer Act does not create ambiguity, but rather indicates its intent not to create a private right of action for MAPsMedicare Advantage Plans, instead leaving MAPsMedicare Advantage Plans to enforce their rights as secondary payers under the common law of contract. The court further noted that although Humana did not have a recovery right under the MSPMedicare Secondary Payer Act in Federal court, Humana was not without a remedy; Humana could bring its claims in the state courts against its enrollees to enforce its secondary payer status under the terms of their insurance contracts. The court granted the Plaintiff’s motion to dismiss and also agreed with GSK that the equitable relief that Humana sought in regard to the list of settling Humana enrollees was not appropriate in this case. Now that it has become clear that MAPsMedicare Advantage Plans cannot recover in Federal court, it will be interesting to see how state courts handle liens asserted by MAPsMedicare Advantage Plans and whether or not they will be given any priority over other lien holders. PMSI will continue to follow this issue.
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