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LLC v. Tenet Florida, Inc.

United States Court of Appeals, Eleventh Circuit

March 18, 2019

MSPA CLAIMS 1, LLC, Plaintiff-Appellant,
v.
TENET FLORIDA, INC., and ST. MARY'S MEDICAL CENTER, INC., Defendants-Appellees.

          Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 1:17-cv-20039-KMW

          Before WILSON, JILL PRYOR and THAPAR, [*] Circuit Judges.

          THAPAR, Circuit Judge.

         The Medicare statute is almost "so incoherent [it] cannot be understood." The Federalist No. 62, at 421 (James Madison) (Jacob E. Cooke ed., 1961); see MSP Recovery, LLC v. Allstate Ins. Co., 835 F.3d 1351, 1358 (11th Cir. 2016). Luckily though, we need not venture very far into its tangled web here. The Medicare provision at issue in this case is clear and clearly bars the plaintiff's claim. Accordingly, we affirm.

         I.

         Though we need not wade too deep into Medicare's web, a short statutory background will still make the journey easier. This case concerns two statutory schemes under the umbrella of Medicare: the Medicare Secondary Payer Act ("MSP Act") and the Medicare Advantage Program.

         The Medicare Secondary Payer Act. Sometimes more than one insurer is liable for an individual's medical costs. For example, a car accident victim may be entitled to recover medical expenses from both her own health insurance and the other driver's car insurance. Originally, whenever Medicare had overlapping obligations with a private insurer, Medicare paid first and let the private insurer pick up whatever medical expenses remained. Medicare was the "primary" payer and the private insurer was the "secondary" payer. See Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229, 1233-34 (11th Cir. 2016).

         That changed in 1980 with the MSP Act. Id. at 1234 (citing 42 U.S.C. § 1395y(b)). Enacted amid rising Medicare costs, the MSP Act flipped the primary/secondary order described above. The MSP Act made private insurers "primary" payers (pay first) and Medicare the "secondary" payer (pay only if a balance is remaining). Id. But primary payers can sometimes take a long time to pay (for instance, when a tort defendant or her insurer is contesting liability). So the MSP Act carved out an exception: when a responsible primary plan does not "promptly meet its obligations," Medicare can pay the entire amount upfront, so long as the primary plan eventually reimburses Medicare for any amounts it overpaid. Netro v. Greater Baltimore Med. Ctr., Inc., 891 F.3d 522, 524 (4th Cir. 2018) (citing 42 U.S.C. § 1395y(b)(2)(B)).

         To give the reimbursement requirement some teeth, the MSP Act created a cause of action that permits the government to sue when it is not properly reimbursed. Id. But insured individuals (and other private entities) are often in a better position than the government to know about the existence of responsible primary plans. Id. So the MSP Act also created a second cause of action for private plaintiffs. Successful private plaintiffs receive double damages, and while they must give Medicare its share of the recovery, they can keep whatever is left over. See Glover v. Liggett Grp., Inc., 459 F.3d 1304, 1307 (11th Cir. 2006) (citing 42 U.S.C. § 1395y(b)(3)(A) (double damages); id. § 1395y(b)(2)(B)(iv) (Medicare's subrogation rights)). This scheme "'encourage[s] private parties who are aware of non-payment by primary plans to bring actions to enforce Medicare's rights.'" Humana Med., 832 F.3d at 1235 (quoting Glover, 459 F.3d at 1307). In the car accident example, say that Medicare pays for the accident victim's medical expenses, but the other driver's car insurance, despite having an obligation to pay, does not. In that case, the car insurance company is a primary plan that has failed to fulfill its obligations. So the accident victim may sue it under the MSP Act and, if successful, recover on her own behalf.

         Medicare Advantage Organizations.

         Almost two decades after introducing the MSP Act, Congress enacted the Medicare Advantage Program (also known as Medicare Part C). 42 U.S.C. § 1395w-21 et seq. This statute aims to reduce Medicare costs through semi-privatization; it permits Medicare to effectively subcontract its duties to private insurers, operating as Medicare Advantage Organizations (commonly called "MAOs"). Parra v. PacifiCare of Ariz., Inc., 715 F.3d 1146, 1152-53 (9th Cir. 2013). Under these contracts, Medicare pays the MAO a fixed fee per enrollee, and, in exchange, the MAO must provide at least the same benefits to the enrollee that she would receive under traditional Medicare. Tenet Healthsystem GB, Inc. v. Care Improvement Plus S. Cent. Ins. Co., 875 F.3d 584, 586 (11th Cir. 2017).

         Since MAOs stand in the shoes of Medicare, Congress implemented a similar primary/secondary payment structure to govern situations when MAOs have overlapping obligations with other insurers. MAOs, like Medicare, are "secondary" payers, stepping in once the primary payer has fulfilled its obligation. MAOs, like Medicare, can make payments in excess of their secondary obligations, conditioned on later receiving reimbursement from the primary payer. Humana Med., 832 F.3d at 1235 (citing 42 U.S.C. § 1395w-22(a)(4)). And finally, MAOs, like Medicare, can sue primary plans to ensure they are properly reimbursed. Id. at 1238. But unlike Medicare, MAOs must rely on the private cause of action when they sue. They cannot use the separate government cause of action. See id. at 1236-38; 42 U.S.C. § 1395y(b)(2)(B)(iii) ("[T]he United States may bring an action against any or all entities that are or were required or responsible . . . to make payment . . . under a primary plan. . . . In addition, the United States may recover . . . from any entity that has received payment from a primary plan or from the proceeds of a primary plan's payment to any entity." (emphasis added)).

         II.

         Florida Healthcare Plus, Inc. ("FHCP") is an MAO. In 2013, one of FHCP's enrollees got into a car accident and received treatment at St. Mary's Medical Center, Inc.'s ("St. Mary's") hospital. Two plans covered her treatment. Allstate, as her private insurance company, was the "primary" payer. And FHCP also covered her treatment as the "secondary" payer. But, instead of billing Allstate first, St. Mary's billed both Allstate and FHCP for the same medical treatment. And they both paid. Several months later, without ...


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