Amanda Saylor from our office posted the following…

On the December 16, 2014 case Collins v. Wellcare Healthcare Plans, Inc. a Louisiana District Court provided additional jurisprudential support for the 3rd circuit’s 2012 In re Avandia decision allowing for a private cause of action for Medicare Part C plans under the Medicare Secondary Payer statute (“MSP”). Collins v. Wellcare Healthcare Plans, Inc., 2014 WL 7239426 at 10 (E.D.La. Dec. 16, 2014). In analyzing whether defendant Wellcare could bring a private cause of action against Plaintiff Aimie Collins the Court examined (1) whether a tort settlement could be considered to be a “primary plan” under the MSP, and (2) whether Wellcare had made a conditional payment as contemplated in 42 U.S.C. § 1395y(b)(2)(B). Id. at 11. The Court determined that the statutory language of the MSP clearly supports that a beneficiary’s tort settlement is a “primary plan” under the MSP. Id. at 13. In rejecting Collins’ contention that Wellcare’s payments were not conditional for failure to definitely ascertain whether another payer would accept financial responsibility, the Court highlighted that no case law support had been offered nor was there any statutory support suggesting that a Part C plan had such a responsibility. Id. at 15. While this decision provides another layer of statutory support for Part C plans claiming reimbursement rights on par with traditional Medicare, it still represents a small victory for beneficiaries of tort settlements as Judge Fallon went on to preclude Part C plans from seeking double damages in certain tort settlement cases. The rationale behind double damages is to deter primary private insurers from failing to make payments thus leaving the financial burden of medical care on the government, Judge Fallon explained, and in this case the Plaintiff did not conceal or spend the money at issue rather she put her settlement into a trust pending a judicial determination of which party had a rightful claim to it. Id. at 15-16. Accordingly the facts in this case were insufficient to support a finding that “failure to provide payment” had occurred justifying a claim for double damages under 42 U.S.C. § 1395y(b)(3)(A). Id. at 16. In analyzing the appropriate reimbursement amount in light of the facts of this case, the Court declined to make a ruling because the nature of the settlement continues to be a disputed material fact. Id. at 18. The Court concluded that the amount of reimbursement that a Part C plan is entitled to seek in a given case will depend largely upon the nature of the settlement, specifically whether the settlement released the tortfeasor from liability for medical expenses and whether the tort settlement provided compensation for medical expenses regardless of the extent of that compensation. Id. at 17-18.

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