MSP Case Remanded by Sixth Circuit to Address Standing

On August 16, 2018, the US Court of Appeals for the Sixth Circuit remanded Duncan v. Liberty Mut. Ins. Co., 2018 U.S. App. LEXIS 22811, back to the US District Court. The case involved the Medicare Secondary Payer Act (MSPA) and questioned whether a party can pursue double damages under the Act.

Facts of the Case

David Duncan was seriously injured in an automobile accident. Duncan had a no-fault insurance policy with Liberty Mutual and was a Medicare beneficiary. After his accident, Medicare made payment for his medical expenses stemming from his accident. Duncan died one year following the accident and Liberty Mutual did not pay the medical expenses. Duncan’s estate then pursued an action against Liberty Mutual. A jury verdict determined that Liberty Mutual was responsible for the medical expenses. Subsequently, Liberty Mutual notified Medicare that it was a primary payer in relation to the accident. Medicare responded letting Liberty Mutual know that claims had been identified amounting to $174,815.20 in conditional payments; however, a final conditional payment amount had not yet been determined.

After the jury verdict, Duncan’s estate amended its complaint and asserted a claim for double damages under the MSPA. Liberty Mutual then removed the case to the US District Court for the Eastern District of Michigan and moved for summary judgment on the issue of whether Duncan’s estate was entitled to pursue double damages under the MSPA.  The District Court granted Liberty Mutual’s motion and Duncan’s estate appealed the decision to the US Court of Appeals.

Analysis by the Court

Like other Medicare Secondary Payer cases, the first obstacle plaintiffs face is the ability to demonstrate standing. After meeting the standing requirements, the Court compared the matter with Gucwa v. Lawley, which was also recently decided in the Sixth Circuit, and to Netro v. Greater Balt. Med. Ctr., Inc., which was recently brought by a personal representative in the Fourth Circuit. In it’s comparison to Guwca, the Court noted that, “[a] plaintiff does not satisfy the elements of standing simply by showing that the insurer failed to make payments ‘on [his] behalf’; the plaintiff must show that he ‘[him]self suffered an injury because a primary plan has failed’ to pay.” Gucwa, 731 F. App’x at 414. The Sixth Circuit court opined that the crux of the standing issue in the instant matter is whether Duncan’s estate was injured by Liberty Mutual’s failure to make payment first which triggered Medicare’s conditional payments.  However, the Court explained that such a determination is “fact intensive”, and one which the lower court failed to address. Id. At 6. Consequently, the Court remanded the matter to the district court to address the “factually intensive” issue of standing.

Takeaway

The foregoing is just one of many examples of a private citizen using the MSPA’s private cause of action to bring a suit for double damages. As mentioned above, we recently saw the Fourth Circuit find that a personal representative of a deceased Medicare beneficiary had standing to sue under the MSPA. We continue to see various parties bringing this type of action. In almost every case, we observe each presiding Court’s interpretation of the MSPA’s statutory intent. Additionally, as the cases pass, the interpretation and application of the MSPA broadens. For now, Duncan v. Liberty Mutual has been remanded to the lower court; however, we will continue to monitor its progress and will provide the Sixth Circuit’s latest interpretation of the MSPA once available.

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