Delaware Court Reminds Us of MSP Basics

Medicare Set-Aside Blog, MSP Litigation on February 19, 2014
Posted by Jennifer Jordan, JD, MSCC

On January 23, 2014, the Superior Court of Delaware for Kent County dismissed an amended complaint seeking double damages under 42 U.S.C. 1395y(b)(3)(A). While hopeful that this opinion would further recent trends holding that both express conditions in the statute must be met in order to bring this action, meaning involving an Medicare exclusion and a group health plan that denied on the basis of Medicare entitlement, this decision takes us back to basics.

Given that Delaware resides in the Third Circuit, the broad application of the PCA advanced by In re Avandia was heavily relied upon by Plaintiffs and rather than use any of the more relevant recent cases that would argue that plaintiffs did not even have standing to bring such a claim, the defense cited the 2011 decision in Bio-Medical Applications of TN to support the notion that “the MSP only allows for causes of action against private tortfeasors brought by Medicare, not for lawsuits against tortfeasors by private parties.” The court did not find that argument persuasive, found that the Third Circuit did not have any authority directly on point and reached all the way back to the 2006 11th Circuit decision in Glover v. Liggett Group to support the idea that “§1395y(b)(3)(A) does not create a private cause of action against alleged-as opposed to proved-tortfeasors whose responsibility for payment of medical costs has not been previously established.” The claim was ultimately dismissed because absent a settlement, judgment, award or other payment, the MSP is not triggered and no reimbursement responsibility exists under the statute.

Although not helpful in the least in the ongoing debate over who actually has standing to bring a private cause of action under §1395y(b)(3)(A), this case still serves as an important reminder to never lose sight of the fact that the MSP does not create coverage or reimbursement obligations that did not otherwise already exist under some governing legal obligation.


C.A. No. K12C-09-044 WLW
2014 Del. Super. LEXIS 63
January 23, 2014, Decided