Supreme Court Scheduled to Discuss Caldera Today

Medicare Set-Aside Blog, MSP Litigation on October 11, 2013 | Posted by Jennifer Jordan, JD, MSCC

On September 25, 2013, the Caldera cert petition was distributed to the Supreme Court Justices for Conference on October 11, 2013. Today’s the day the Supremes again decide whether the MSP is worth its time or not. Unlike previous bites at the apple, all of which lower courts ruled in favor of Medicare recoveries, Caldera represents Medicare not recovering in a situation that it otherwise should not have been responsible for payment. If Caldera stands, WC carriers could be encouraged to more frequently deny claims of Medicare beneficiaries and fight longer in the interest of avoiding payments requiring prior authorization. More states like Georgia could see the benefit of passing laws limiting medical benefits. The public policy implications here are entry different than previous considerations. This is not an individual who received an insurance payment inclusive of reimbursement for medical expenses arguing why he should have to actually reimburse the entity that made those medical payments on his behalf, regardless of that entity’s rather precarious financial situation. Hopefully the Justices will recognize that and give this case serious consideration today.

The question before the Court this time is “What is required in order to commence a private cause of action for double damages under 42 U.S.C. 1395y(b)(3)(A)?” The fact pattern in Caldera is actually the perfect circumstances for bringing a private cause of action under this section of the statute as we previously understood it from cases such as O’Connor v. Mayor & City of Baltimore and the various Stalley cases. Prior to Medicare Advantage Organizations (MAOs), the only people able to achieve standing to raise this claim was a Medicare beneficiary against a primary payer. Caldera is a Medicare beneficiary for whom Medicare paid for surgeries that his WC carrier later admitted were related to the industrial injury. But the lower courts did not even get to the standing issue as they found the state law did not call for payment, therefore Medicare reimbursement was never even an issue. Hence the question here is essentially if not this, then what exactly are the proper circumstances to raise this claim?

So what are Caldera’s chances? Rule 10 of the Rules of the Supreme Court of the United States explains that cert is not a matter of right, but of judicial discretion. Cert will only be granted for compelling reasons and the three typical considerations are conflict among the circuits, public policy and federal question. We do not have conflict among the circuits. While there are several conflicting private cause of action applications involving various types of insurance claims, this is the first case of its kind. Caldera rules 100% in favor of state WC law and never even gets to the MSP issue, therefore it is unlikely we’ll get there as a circuit conflict. But what about this inherent conflict in the application of §1395y(B)(3)(A) throughout the nation? 3rd Circuit says MAOs can use it to file suit in federal court just as the government can, however the 9th circuit qualified that and says it can only be used in cases against primary payers, while the district courts in Tennessee and Michigan just recently said that it can only be used in group health situations. 6th Circuit indirectly concurs with its district court in its application in Bio-Medical Applications of TN, a claim against a group health plan that denied dialysis payment on the basis of ESRD Medicare entitlement – the exact activity the statute was trying to prevent. While we may not have direct conflict on this particular issue, we have conflict and perhaps that makes this a federal question more than anything. And given the aforementioned public policy implications, there really are several issues the Court should seriously consider.

One way or another, we will know by the end of the month whether the Court will again leave us to toil away in the confusion and misunderstanding of the MSP that exists today. Should it be granted cert, oral arguments would not be held until well into 2014 as cases granted cert prior to the beginning of this term already occupy the schedule through December 12, 2013.

Keep your fingers crossed…

 

 

http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/13-194.htm