116 F.3d 1364 (11th Cir. 1997), 95-5398, Brooks v. Blue Cross and Blue Shield of Florida, Inc.
|Citation:||116 F.3d 1364|
|Party Name:||RICO Bus.Disp.Guide 9301, 53 Soc.Sec.Rep.Ser. 621, Nadine BROOKS, Mildred McIver, Duane Norman, Leonard Struthers, Madie Wilkerson, J.D. Wilkerson, Winter Garden Citrus Growers Association, Winter Haven Citrus Growers Association, Plaintiffs-Appellants, v. BLUE CROSS AND BLUE SHIELD OF FLORIDA, INC., New York Life Insurance Company, United American|
|Case Date:||March 11, 1997|
|Court:||United States Courts of Appeals, Court of Appeals for the Eleventh Circuit|
John Scarola, David J. Sales, Searcy, Denney, Scarola, Barnhart & Shipley, P.A., West
Palm Beach, FL, Michael J. Pucillo, Carol McLean Brewer, Burt & Pucillo, Winter Haven, FL, for Plaintiffs-Appellants.
Nancy Gregoire, Ruden, Barnett, McClosky, Smith, Schuster & Russell, P.A., Ft. Lauderdale, FL, Charles M. Shafer, King & Spalding, Atlanta, GA, for Blue Cross and Blue Shield of Florida, Inc.
Barbara Logoa, Morgan, Lewis & Bockius, P.A., Sherryll Martens Dunaj, Barbara Lagoe, Cohen, Berke, Bernstein, Brodie, Kondell & Laszlo, P.A., Miami, FL, Michael A. DeMicco, New York Life Ins. Co., New York City, for New York Life Insurance Company.
Lawrence Irwin Bass, John P. Wiederhold, Wiederhold, Moses, Bulfin & Rubin, P.A., for United American Insurance Company.
Appeal from the United States District Court for the Southern District of Florida.
Before CARNES, Circuit Judge, and FAY and CAMPBELL [*], Senior Circuit Judges.
The district court's grant of summary judgment to the Defendants is AFFIRMED based upon the holding and rationale contained in Part III.A of the district court's September 22, 1995 order, a copy of which is attached as Appendix A hereto. We have no occasion to reach the remaining issues addressed in other parts of that order and imply no view concerning any of them.
UNITED STATES DISTRICT COURT,
SOUTHERN DISTRICT OF FLORIDA.
Nadine Brooks, Mildred McIver, Duane Norman, Leonard
Struthers, Madie Wilkerson, J.D. Wilkerson, Winter
Garden Citrus Growers Association and
Winterhaven Citrus Growers
Blue Cross/Blue Shield of Florida, Inc., New York Life
Insurance Company, United American Insurance
Company, and First National Life
Insurance Company, Defendants.
ORDER OF SUMMARY JUDGMENT
THIS CAUSE comes before the Court upon (1) Defendant Blue Cross/Blue Shield of Florida, Inc.'s ("Blue Cross's") motion to dismiss the amended complaint (DE # 31), filed May 15, 1995; (2) Defendant New York Life Insurance Company's ("New York Life's") (a) motion for instructions and an Order directed to Plaintiff's counsel (DE # 46), filed June 5, 1995; (b) combined motion to dismiss and/or for summary judgment (DE # 47), filed June 5, 1995; and (c) corrected motion for more definite statement and for RICO case statement (DE # 56), filed June 7, 1995; (3) Defendant First National Life Insurance Company's ("First National's") (a) motion to dismiss the amended complaint (DE # 53), filed June 7, 1995; and (b) motion for summary judgment (DE # 93), filed August 4, 1995; and (4) Defendant United American Insurance Company's ("United American's") corrected motion to dismiss or in the alternative for more definite statement (DE # 67). 1 On August 28, 1995, the Plaintiffs filed a single response to all of these motions with the exception of New York Life's motion for instructions and an Order directed to Plaintiffs' counsel, to which the Plaintiffs responded on September 14, 1995. 2 The Court also heard oral argument
on the present motions on September 18, 1995. Upon a thorough review of the pleadings and the record in this case, as well as the arguments of counsel, and for the reasons stated below, it is hereby
ORDERED and ADJUDGED as follows:
1. Defendant Blue Cross's motion to dismiss the amended complaint (DE # 31) is GRANTED;
2. Defendant New York Life's motion for instructions and an Order directed to Plaintiff's counsel (DE # 46) is DENIED AS MOOT;
3. Defendant New York Life's combined motion to dismiss and/or for summary judgment (DE # 47) is GRANTED;
4. Defendant New York Life's corrected motion for more definite statement and for RICO case statement (DE # 56) is DENIED AS MOOT;
5. Defendant First National's motion for summary judgment (DE # 93) is GRANTED;
6. Defendant First National's motion to dismiss (DE # 53) is DENIED AS MOOT; and
7. Defendant United American's corrected motion to dismiss (DE # 67) is GRANTED.
8. Any other motions pending in this action at this time are DENIED AS MOOT.
9. Defendants shall file a proposed Order of final summary judgment within ten (10) days of this Order.
The Plaintiffs bring this purported Class Action pursuant to the Medicare Secondary Payer statute (the "MSP statute" or the "MSP laws"), 42 U.S.C. § 1395y(b), as well as claiming violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962. A brief overview of the MSP laws is helpful to an understanding of the issues presented by this case. The first paragraph of the MSP statute provides, in relevant part:
A group health plan--
(I) may not take into account that an individual (or the individual's spouse) who is covered under the plan by virtue of the individual's current employment status with an employer is entitled to benefits under this subchapter under section 426(a) of this title, and
(II) shall provide that any individual aged 65 or older (and the spouse age 65 or older of any individual) who has current employment status with an employer shall be entitled to the same benefits under the plan under the same conditions as any such individual (or spouse) under age 65.
42 U.S.C. § 1395y(b)(1)(A)(i). For employees who are eligible for Medicare by virtue of age, the employer must, therefore, offer the same health insurance to those employees as to any other employee. Under the second paragraph, the MSP statute establishes that Medicare will not pay for services:
to the extent that--
(i) payment has been made, or can reasonably be expected to be made, with respect to the item or service as required under paragraph (1)....
42 U.S.C. § 1395y(b)(2)(A)(i). An exception to this rule is provided in subparagraph (B) of paragraph (2), which allows for Medicare to make payments conditional on their reimbursement by the "primary plan." 3 The statute also establishes a cause of action by the United States to recover double damages from any entity responsible for payment under the MSP laws and for subrogation to the rights of any individual or other entity entitled to payment from a primary plan.
In the third paragraph, the MSP statute includes a private right of action for double damages against the "primary plan which fails to provide for primary payment (or appropriate reimbursement)...." 42 U.S.C. § 1395y(b)(3)(A). This paragraph also penalizes employers and others who entice employees to opt out of the employer group
health plan. 42 U.S.C. § 1395y(b)(3)(C) (providing a monetary penalty for any "employer or other entity" which "offer[s] any financial or other incentive for an individual entitled to benefits under this subchapter not to enroll (or to terminate enrollment) under a group health plan or a large group health plan which would (in the case of enrollment) be a primary plan...."); see also 42 U.S.C. § 1395y(b)(3)(B) (referring to 26 U.S.C. § 5000, which imposes an excise tax on an employer for a group health plan that does not comply with the MSP laws).
Under this statutory scheme, therefore, if an aged employee accepts the employer's plan, then that plan will provide primary coverage, even if by its own terms the policy states that its coverage is secondary to Medicare payment. Thus, where a group health plan attempts to offer coverage that is only secondary to Medicare's primary coverage, then that coverage becomes primary to Medicare's coverage by operation of the statute. See Health Ins. Ass'n of Am. Inc. v. Shalala, 23 F.3d 412, 415 (D.C.Cir.1994) ("The effect of [§ 1395y(b)(1)(A)(i) ] is to nullify any plan provision that would 'carve out' expenses covered by Medicare and thus, in effect, make the plan's coverage secondary to Medicare's."), cert. denied, 513 U.S. 1147, 115 S.Ct. 1095, 130 L.Ed.2d 1064 (1995); United States v. Blue Cross Blue Shield, 859 F.Supp. 283, 287-88 (E.D.Mich.1994) (holding that "complementary coverage" plan that pays only specified expenses not covered by Medicare, such as co-payments and deductibles, contravenes the MSP statute, and stating that " 'if an employer does offer a group health plan which provides coverage to the working aged, the MSP laws do require the plan to be deemed the primary payer of benefits and Medicare the secondary payer.' ") (citation omitted). If, on the other hand, the employee rejects the employer's insurance plan, then Medicare will be the primary insurer for that individual. In this case, the employee remains free to purchase supplemental insurance (known as a "Medigap" policy) to augment Medicare's benefits. See Health Ins. Ass'n v. Shalala, 23 F.3d at 420 ("[T]he working aged are free to purchase 'Medigap' policies on their own."); see also 42 U.S.C. § 1395b ("Nothing contained in this subchapter shall be construed to preclude any ... individual from purchasing or otherwise securing[ ] protection against the cost of any health services."); 42 U.S.C. § 1395ss (regulating Medigap insurance).
The Plaintiffs in this action are divided into two groups. The first set of Plaintiffs, the "Individual Plaintiffs," are working individuals over the age of...
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