Caldera Denied Cert by US Supreme Court

Medicare Set-Aside Blog, MSP Litigation on October 16, 2013
Posted by Jennifer Jordan, JD, MSCC

Once again the Supreme Court has failed to see any importance in providing some clarity in the application of the Medicare Secondary Payer Act. On October 15, 2013, the Court announced that Caldera’s petition was denied. While unfortunate given that the MSP was most likely not applied properly to the situation, the denial is far more significant in that the message stands for the proposition that if state law does not require payment, then even Medicare cannot recover, even in situations where the primary payer acknowledges responsibility. This is quite a victory for employers and insurers nationwide as CMS has developed a habit of overreaching in its reimbursement demands. The Fifth Circuit ruling stands as precedent that such matters need not reach the MSP if they can be decided within the confines of state law. If it is not compensable, then it is not compensable even for Medicare’s sake.

It will be interesting to see if this decision empowers employer/insurers enough that they stop operating out of fear when it comes to the MSP. A WCMSA approved by CMS represents the worst case medical scenario with no regard for such state limits. CMS essentially hides behind the fact that the process is voluntary when called out on such state issues. With this precedent, perhaps employer/insurers will be more confident in the strength of their state law limitations and forego seeking CMS approval so that they may take advantage of them when evaluating future medical exposures. This will be particularly important in Georgia once claims incurred since July become ripe for such evaluations.

Rarely have we seen situations where Medicare was prohibited from recovering. If we have to find some good in the high court’s decision not to review the case, it is hopefully that this represents a change in the tide of unwavering deference to the wants of CMS.