In Humana v. Farmers Texas County Mutual, et al., 13-cv-006111 (W.D. Tex. Sept. 24, 2014), the plaintiff, a Medicare Advantage Organization (MAO), sought reimbursement from a no-fault automobile insurer. The magistrate judge previously granted the defendant’s motion to dismiss holding that MAOs did not possess a private right of action under the Medicare Secondary Payer Act. Humana objected to the Order on Report and Recommendations and, on September 24th, the district court, Judge Lee Yeakel, overturned the recommendations and joined with the Third Circuit’s Avandia decision. The Court wrote:
The Medicare Secondary Payer Act (the “Act”) creates remedies against a primary plan that fail to satisfy its statutory obligation to make primary payments or reimburse conditional Medicare payments by establishing two separate causes of action against noncompliant primary plans. The first belongs to the United States, which “may bring an action against any or all entities that are or were required or responsible … to make payment … under a primary plan.” 42 U.S.C. § 1395y(b)(2)(B)(i) (West Sup. 2014). The second is a private cause of action with no particular plaintiff specified:
There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).
Id. at §1395y(b)(3)(A). In In re Avandia Mktg., 685 F.3d 353 (3rd Cir. 2012), the Third Circuit addressed the same issue raised in this case whether a Medicare Advantage Organization, such as Humana, may bring a private cause of action against a primary plan under the secondary provision of the Act. The Fifth Circuit has not addressed the issue. The Third Circuit held that the text of Section 1395y(b)(3)(A) “unambiguously provide{s] Humana with a private cause of action.” Id. at 365. The Third Circuit found “that the provision is broad and unambiguous, placing no limitations upon which private (i.e., non-governmental) actors can bring suit for double damages when a primary plan fails to appropriately reimburse any secondary Payer.” Id. at 359. “Congress was certainly aware that private health plans might be interested private parties when it drafted the cause of action, and it did not exclude them from that provision’s ambit.” Id. at 367. Therefore, the Third Circuit concluded, any private plaintiff with standing may bring an action. Id. at 367. This court agrees. This court finds the Third Circuit’s analysis persuasive. Therefore, the court will reject the magistrate judge’s recommendation to grant Defendants’ motion to dismiss Humana’s cause of action for double damages under Section 1395y(b)(3)(A).
This is a nice victory for those pursuing Medicare Advantage reimbursement in Texas. However, this case will most certainly end up before the Fifth Circuit Court of Appeals in the near future. If you should have any questions regarding this article or subrogation in general, please contact Ryan Woody at rwoody@mwl-law.com.
