Circuits in Conflict

Commentary, Medicare Set-Aside Blog, MSP Litigation on April 22, 2013
Posted by Jennifer Jordan, JD, MSCC

Well it looks like the Supreme Courts may get a third bite at the apple on another Medicare issue. On April 19, 2013, the 9th Circuit Court of Appeals upheld the Arizona District Court opinion in Parra v. PacifiCare that Medicare Advantage Organizations (MAO’s) cannot bring a private cause of action under the MSP to recover on behalf of Medicare. The decision is in direct conflict with In re Avandia in which the 3rd Circuit Court of Appeals decided that an MAO could bring a private cause of action not under 42 USC 1395y(b)(2)(B)(iii) but rather under 42 USC 1395y(b)(3). In case you do not recall, the district court in Parra decided in March 2011 that because an MAO is only permitted by the statute and regs to create a contractual right of reimbursement, that it may not exercise a private cause of action provided by the MSP statute. The appellate court upheld that decision finding that 42 USC 1395y(b)(3) applied only to cases in which a primary plan failed to make primary payment and it was the survivors in Parra that were pursued for reimbursement. Because of this, no subject matter jurisdiction existed under the MSP and the dismissal was upheld.

So that leaves us with a direct conflict between the 3rd and 9th circuits. If Parra appeals this decision, it is again questionable that the Supreme Court would take cert. Besides rejecting the last two MSP issues put before it, much like Bradley and Hadden, there exists a distinguishing factor in the underlying cases that will likely keep the issue from being heard. Because we are dealing in this instance with a state law driven survivors action and an MAOs recovery rights, whereas Avandia is dealing with a suit against a primary plan as intended by the statute, chances of getting cert are not good. Again.


GUILLERMINA PARRA; TERRI CORRALES; FRANCISCO PARRA; JESUS PARRA, Plaintiffs counter defendants Appellees, DCB v. PACIFICARE OF ARIZONA, INC., an Arizona corporation, Defendant counter claimant Appellant.
No. 11-16069
2013 U.S. App. LEXIS 7861
April 19, 2013