Another MSP Case; Another Court’s Interpretation: Court finds Personal Representative Has Standing to Bring Private Cause of Action  

Medicare Set-Aside Blog, MSP Litigation, MSP News on June 12, 2018
Posted by Jean S. Goldstein, JD

Last week, the Fourth Circuit was added to the list of recent jurisdictions addressing the private cause of action provision under the Medicare Secondary Payer act.  The Fourth Circuit has jurisdiction over the District Courts in the states of Maryland, North Carolina, South Carolina, Virginia and West Virginia. In Netro v. Greater Balt. Med. Ctr. Inc., the Fourth Circuit held that a personal representative of a Medicare beneficiary’s estate had standing to bring suit under the Medicare Secondary Payer (MSP) statute, allowing for a private cause of action to proceed. See Netro v. Greater Balt. Med. Ctr., Inc., 2018 U.S. App. LEXIS 14835 (4th Cir. June 4, 2018).  However, despite having standing to bring the action, the Court found that facts of the case did not support Plaintiff’s argument that the Defendant failed to make payment.  As you may have seen here on our blog, there have been many MSP actions of lately.  These cases have been brought against primary payers who plaintiffs have alleged failed to provide the appropriate payment or reimbursement.  In each case, plaintiffs must get over the first hurdle of showing standing.  This most recent case is no different.

Facts of the Case

Kathy Netro, was named the personal representative of her mother, Barbara Bromwell’s estate.  Netro brought a malpractice suit against Greater Baltimore Medical Center (GBMC) after her mother’s death.  GBMC was found liable and awarded $451,956.00, which included $157,730.75 for conditional payments made by Medicare for Bromwell’s treatment.  Netro was required to repay the conditional payments from the judgment.  However, after the verdict, GBMC filed a post-trial motion seeking to reduce the amount of the initial judgment, and obtained a final judgment of $389,014.30. Netro then filed a federal suit under the private cause of action provision of the MSP act, alleging GBMC refused to pay the state court judgment.  After the filing of Netro’s suit, GBMC paid Netro the amended final judgment amount plus post-judgment interest, and subsequently filed a motion to dismiss the action for lack of standing, and because it did not fail to pay.

Court Found That Netro, as Personal Representative, Had Standing

The Court found that Netro had standing to bring the private cause of action under the MSP.  In order to have standing, a plaintiff must at a minimum demonstrate an injury in fact, that is fairly traceable to the challenged conduct of the defendant, and is likely to be redressed by a favorable decision.  Id.at 6.  In consideration of these requirements, the Court opined that Medicare paid for treatment that Bromwell received, which was later determined to be the responsibility of GBMC, and GBMC was ordered to pay Netro.  Despite the fact that GBMC eventually paid Netro, the Court found that standing is determined at the time of filing a complaint and at the time the complaint was filed, GBMC had not paid Netro. 

The Court also found that Netro properly invoked a “derivative injury,” which the Court indicated is the “government’s recoupment interest assigned to a Medicare beneficiary by the MSP Act.”   Essentially, the Court asserted that the MSP Act allows Medicare’s interests to be assigned to a Medicare beneficiary, such as Netro to help Medicare recover funds.  Interestingly, the Court also added the commentary that “[n]ot just anyone can wander in off the street and avail themselves of the MSP Act’s private cause of action.”  Id. at 13.

A Delay to Pay Does Not Equate to a Failure to Pay

Even though the Court found that Netro had standing, the Court held that the delay in making payment to Netro did not constitute a failure to pay under the MSP.  Citing to Black’s law dictionary, the Court noted that “[t]o fail is to “be deficient or unsuccessful; to fall short of achieving something expected or hoped for.  There cannot be failure to pay when there has been payment.”  Id. at 15.  Consequently, because there was not a failure to pay, the double damages provision was not applicable.  Of note, the Court also rejected Netro’s request to “adopt a 60-day rule that would leave any primary plan vulnerable to suit exactly 60 days after becoming responsible for reimbursing Medicare,” finding that “[t]he statutory text does not support any specific deadline.” Id.  at 15 (besides, GBMC’s payment was actually made within 60 days of the final judgment).

Another MSP Case; Another Interpretation

This is yet another Circuit interpreting and extending the private cause of action provision under the MSP in a distinct way.  Recently, we have seen various parties bringing these types of actions, including plaintiff-attorneys, providers, and Medicare Advantage Plans- to name just a few.  In nearly every case, the Court attempts to determine the statutory intent of the MSP.  Moreover, with each case we are seeing broader interpretations and applications of the private cause of action provision; and there is certainly cause for concern depending upon your jurisdiction.  As always, we are committed to helping you put the proper protections in place to achieve MSP compliance.  Please contact us at info@medval.com, to identify and implement proper internal protocols and best practices to proactively address Medicare recovery claims.