Sixth Circuit Holds MAO Has Private Cause of Action Under the MSPA
October 12, 2015
In Cariten Health Plan, Inc. v. Mid-Century Ins. Co., No. 3:14-CV-476-TAV-CCS, 2015 U.S. Dist. Ct. LEXIS 126887 (E.D. Tenn., September 1, 2015), Cariten Health Plan, a Medicare Advantage Organization (MAO), made payments on behalf of an enrollee who was injured in an automobile accident. The enrollee had no-fault coverage through Mid-Century Insurance. Cariten processed and paid the enrollee’s medical charges as it did not have knowledge of the no-fault policy and thus, had no reasonable expectation that a primary payer would cover the expenses. Once Cariten learned of Mid-Century’s no-fault policy, it requested reimbursement for the payments made. Despite the request, Mid-Century refused to provide reimbursement. Cariten subsequently filed an action seeking a declaration that Mid-Century Insurance had coverage primary to Cariten’s and that Mid-Century was obligated to reimburse Cariten for the payments previously made. Cariten argued that it had a private cause of action for double damages under the Medicare Secondary Payer Act (MSPA).
The question before the Court in this case, whether or not an MAO has a private right of action under the MSPA to recover double damages from a primary payer when the MAO has made payments that should have been covered by the primary payer, has not been answered by the Sixth Circuit yet. For this reason, the Court looked to the reasoning and holding in a Third Circuit case which considered the same question, In re Avandia Mktg., Sales Practices & Prods. Liab. Litig., 685 F.3d 353, 353 (3d Cir. 2012). In Avandia, the court reviewed the statutory text, statutory framework, legislative history, and public policy of the MSPA and reached the conclusion that it unambiguously provides a federal right of action for Medicare Advantage Organizations. The Court found the reasoning in Avandia persuasive and adopted it, holding that Cariten did have a right of action against Mid-Century under the MSPA for double damages.
This case continues the recent trend we have seen in courts recognizing expanded recovery rights for Medicare Advantage Organizations. Cariten adds the Sixth Circuit to the list of jurisdictions (which includes the Third, Fifth, and Eleventh Circuits) that have agreed that Medicare Advantage Organizations have a private cause of action for double damages under the Medicare Secondary Payer Act. As Medicare Advantage Organizations continue to file suit in an effort to expand their recovery rights, we will follow the cases and keep you posted on any new developments.