Medicare Beneficiary Lacks Standing to Assert Private Cause of Action under the Medicare Secondary Payer Act
April 24, 2018
Recently, the Sixth Circuit Court of Appeals upheld the district court’s decision that a Medicare beneficiary did not have standing to sue under the private cause of action (PCOA) provision of the Medicare Secondary Payer Act (MSP). In Gucwa v. Lawley, 2018 U.S. App. LEXIS 9428, the plaintiffs filed suit against Accident Fund Insurance Company (Accident Fund) under the MSP, arguing that Accident Fund wrongfully refused to pay medical benefits on behalf of the injured plaintiff.
Plaintiff Mark Marusza was involved in an automobile accident while working, and suffered injuries to his brain, shoulders, cervical spine, and ribs. Following his discharge from the hospital, plaintiff Nancy Gucwa, Marusza’s live-in partner, provided dependent care. Accident Fund terminated payment for Gucwa’s care in July 2012. Accident Fund also retained doctors to examine Marusza’s level of disability. Following the doctors’ examinations and reports, Accident Fund refused to pay for certain treatments. Marusza argued that Accident Fund wrongfully refused to pay for $15,665.00 in treatments, and filed suit against Accident Fund under the MSP.
The MSP provides a private cause of action for double recovery when a primary plan fails to provide payment or reimbursement for medical treatment covered under the plan. Marusza’s claim under the PCOA provision was dismissed, because the district court determined that he could not establish standing under the MSP. To establish standing, Marusza was required to show that he (1) suffered an injury (2) that was fairly traceable to the conduct of Accident Fund, and that the injury (3) was likely to be redressed by a favorable judicial decision.
In this case, Marusza did not assert any personal financial harm. He argued that Accident Fund failed to pay for medical treatment for which it was the primary payer, but Marusza did not allege that he personally paid for that treatment. Instead, he acknowledged that Medicare paid for the treatment. The district court held, and the Sixth Circuit affirmed, that a financial injury suffered by Medicare does not confer standing on Marusza under the MSP. The Sixth Circuit also clarified that Marusza’s work injury itself does not confer standing under the PCOA provision of the MSP. Instead, to establish standing, a financial injury must occur as a direct result of the primary plan’s failure to pay for medical treatment.