(Bio-Medical Applications of TN. v. Central States Health and Welfare Fund) 6th Circuit Appellate Court Apparently not Afraid to Render MSP Decision After All

Medicare Set-Aside Blog on September 8, 2011 | Posted by

As we continue to wait for the U.S. Court of Appeals for the Sixth Circuit to render an opinion in Hadden v. U.S., for which it heard oral arguments on October 13, 2010, we instead received its ruling in a much more complicated MSP related case. On September 2, 2011, the court rendered its decision in Bio-Medical Applications of Tennessee, Inc. v. Central States Southeast and Southwest Areas Health and Welfare Fund, for which oral arguments were heard on January 11, 2011, three months after Hadden. When I say complicated in comparison to Hadden, the analysis in this case involved an MSP application in a group health plan (GHP) situation governed by ERISA involving treatment for end-stage renal disease (ESRD) that triggered an automatic entitlement to Medicare that caused the GHP to prematurely deny coverage for which the provider filed suit for MSP private cause of action double damages under an assignment of the patient’s rights under the insurance plan. The opinion is 18 pages in length and more than have of it applies to the MSP, demonstrating that this court clearly understands the MSP and is more than capable of applying it in Hadden.


Now in the Court’s defense, this case was a little more cut and dry. While ESRD will trigger automatic entitlement to Medicare if the employee has a sufficient work history, if the employee is still covered by a group health plan, it will pay for the first 30 months of treatment, following which Medicare will pick up the next 30 months. The patient here did not live long enough for Medicare to become the primary payer for the treatment in question and the GHP was liable for payment of all treatment received. Not entirely sure why it took 18 pages to reach that conclusion.


Hadden, on the other hand, will force the Court to go beyond the plain language of the MSP statute and regs, into the land of Congressional intent, public policy and principals of equity to render a decision that could very easily suffer Supreme Court scrutiny no matter which way it rules. If it follows Bradley, we have two circuits going rouge and doing what’s right despite the law and regs as they exist today, no matter how badly written. If they follow the status quo and find no grounds for apportionment, then we have conflict among the circuits that can only be resolved by the Supremes. No judge wants to be second guessed and certainly doesn’t want to be overturned, but the longer this takes, the more innocent people continue to be harmed by the egregious acts of CMS. Until this decision is reached, we cannot move on to the next stage and the uncertainty continues. Yet wait is what we shall continue to do…



BIO-MEDICAL APPLICATIONS OF TENNESSEE, INC., Individually and as
assignee of Patient, dba BMA of Kingsport, Plaintiff-Appellee/Cross-Appellant, v.
CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS HEALTH AND
WELFARE FUND, Defendant-Appellant/Cross-Appellee.
Nos. 09-6121/6169
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
11a0251p.06; 2011 U.S. App. LEXIS 18450; 2011 FED App. 0251P (6th Cir.)
January 11, 2011, Argued
September 2, 2011, Decided