Aetna Life Ins. Co. v. Big Y Foods, Inc., Docket No. 20-3853
| Docket Number | Docket No. 20-3853,August Term, 2021 |
| Decision Date | 26 October 2022 |
| Parties | AETNA LIFE INSURANCE COMPANY, Plaintiff-Appellee, v. BIG Y FOODS, INC., Defendant-Appellant, and Nellina Guerrera, Carter Mario Law Firm, Sean Hammil, Danielle Wisniowski, Defendants. |
| Court | U.S. Court of Appeals — Second Circuit |
Eric P. Smith, Faxon Law Group, LLC, New Haven, CT., for Defendant-Appellant;
Michael P. Abate, Kaplan Johnson Abate & Bird LLP, Louisville, KY (Brian A. Bender, Esq., Harris Beach PLLC, New York, NY, on the brief), for Plaintiff-Appellee;
David Farber, King & Spalding LLP, Washington, D.C., for amici curiae American Property Casualty Insurance Association, The Marc Coalition, the National Association of Mutual Insurance Companies, the New York Insurance Association, and DRI, Inc., in support of Big Y. Foods, Inc.;
Ryan L. Woody, Matthiesen, Wickert & Lehrer, S.C., Hartford, WI, for amicus curiae America's Health Insurance Plans in support of Aetna Life Insurance Company;
Arlenys Perdomo, MSP Recovery Law Firm, Coral Gables, FL, for amicus curiae MSP Recovery, LLC in support of Aetna Life Insurance Company.
Before: POOLER, SACK, AND NARDINI, Circuit Judges.
Nellina Guerrera was injured at a Big Y Foods, Inc. supermarket store. Her medical care was partly paid for by her Medical Advantage Organization ("MAO"), Aetna Life Insurance Company. Aetna sought reimbursement from Big Y for the medical costs it paid to Guerrera. Big Y refused to pay, and Aetna brought suit against Big Y in the United States District Court for the District of Connecticut for reimbursement and double damages pursuant to the private cause of action provided for in the Medicare Secondary Payer Act ("MSP Act").
The district court granted Aetna's motion for partial summary judgment, concluding that Big Y owed Aetna reimbursement for the medical costs that Aetna paid to health care providers on Guerrera's behalf and that Aetna could use the MSP Act's private cause of action to recover those costs. Big Y appealed. The question before us is whether the MSP Act's private cause of action permits an MAO such as Aetna to recover from a tortfeasor such as Big Y. The Eleventh and Third Circuits have answered that question in the affirmative. See Humana Med. Plan Inc. v. W. Heritage Ins. Co. , 832 F.3d 1229, 1238-40 (11th Cir. 2016) ; In re Avandia Mktg., Sales Practices & Prods. Liab. Litig. , 685 F.3d 353, 359, 367 (3d Cir. 2012). We agree with our sister circuits. After examining Big Y's remaining arguments, we conclude that no genuine issue of material fact remains, and therefore affirm the order of the district court.
Congress passed the Medicare Act in 1965 as a "federally funded health insurance program for the elderly and disabled." Thomas Jefferson Univ. v. Shalala , 512 U.S. 504, 506, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994). Medicare is commonly referred to by its five parts. Part A and Part B contain the traditional fee-for-service provisions that entitle eligible persons to have the government, through Medicare, directly pay medical providers for hospital and outpatient medical care. Part C is the Medicare Advantage program, which allows Medicare-eligible persons to elect to have an MAO provide their Medicare benefits. Part D, not at issue here, provides for prescription drug coverage.
Part E contains definitions and exclusions for the rest of Medicare. One such exclusion is the MSP Act, described below in greater detail. Part E also contains two causes of action. One is expressly reserved for the United States, and the other, 42 U.S.C. § 1395y(b)(3)(A), is the private cause of action at issue in this case.
Medicare initially acted as the primary payer for many medical services, even if a Medicare beneficiary was also covered under another insurance plan. "Medicare paid for all medical treatment within its scope and left private insurers merely to pick up whatever expenses remained." Bio–Med. Applications of Tenn., Inc. v. Cent. States Se. & Sw. Areas Health & Welfare Fund , 656 F.3d 277, 278 (6th Cir. 2011). In 1980, Congress attempted to control the rising costs of Medicare by enacting the MSP Act, which "inverted that system [and] made private insurers covering the same treatment the 'primary' payers and Medicare the 'secondary' payer."
Id. The MSP Act transformed Medicare into a "a back-up insurance plan to cover that which is not paid for by a primary insurance plan." Thompson v. Goetzmann , 337 F.3d 489, 496 (5th Cir. 2003) (per curiam).
The MSP Act, 42 U.S.C. § 1395y(b), is located in Part E of the Medicare Act. Paragraph (1) establishes certain requirements for primary group health plans. Paragraph (2) describes Medicare's status as a secondary payer to primary plans and contains a set of provisions that effectuates that status. First, Paragraph (2)(A) states that Medicare will not bear the cost of services when:
Id. § 1395y(b)(2)(A). These provisions protect Medicare from being required to pay for services for which a primary plan is responsible. "Primary plan" is defined broadly, covering everything from traditional group health plans, as defined by Paragraph (1), to businesses without insurance, which are deemed to have a "self-insured" plan. Id.
Second, to resolve situations in which the primary payer may be unwilling or unable to pay promptly, Paragraph (2)(B) provides authority for conditional payments to be made by Medicare, subject to reimbursement:
Third, to increase the chance of receiving reimbursement, Congress established mechanisms for enforcement. One such mechanism is provided in Paragraph (2)(B), which grants a cause of action for the United States government to recover from a primary plan. Id. § 1395y(b)(2)(B)(iii). Paragraph (3), entitled "Enforcement," contains another such mechanism, the private cause of action at issue in this case. It provides simply:
There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).
In 1997, Congress added Part C to the Medicare system. Part C gives Medicare-eligible persons "the option to receive their Medicare benefits through private organizations" — namely "Medicare Advantage organizations." Collins v. Wellcare Healthcare Plans. Inc. , 73 F. Supp. 3d 653, 659 (E.D. La. 2014). This program was enacted to "allow beneficiaries to have access to a wide array of private health plan choices in addition to traditional fee-for-service Medicare," and to "enable the Medicare program to utilize innovations that have helped the private market contain costs and expand health care delivery options." H.R. Rep. No. 105-217, at 585 (1997) (Conf. Rep.).
MAOs are required to enter into a contract with the Department of Health and Human Services. 42 U.S.C. § 1395w-27. MAOs receive a fixed amount per enrollee, and in return, must provide at least the same level of benefits that enrollees would receive under the fee-for-service option. Id. § 1395w-22. Medicare beneficiaries have increasingly elected to receive their Medicare benefits through MAOs. In July 2006, 6.5 million Medicare beneficiaries chose to receive their benefits through MAOs, but by September 2022, that number had risen to over 29 million. See U.S. CENTERS FOR MEDICARE & MEDICAID SERVICES, MONTHLY CONTRACT AND ENROLLMENT SUMMARY REPORTS , available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Monthly-Contract-and-Enrollment-Summary-Report.
In February 2015, Nellina Guerrera fell and sustained injuries at a Big Y store in Monroe, Connecticut. She received medical care for her injuries. Guerrera was eligible for Medicare and elected to receive her Medicare coverage through a Medicare Advantage plan run by Aetna. Healthcare providers issued invoices totaling more than $48,000 for care relating to Guerrera's fall. Aetna paid $9,854.16, and Guerrera paid $1,000.
Guerrera hired Carter Mario Injury Lawyers to pursue Big Y for approximately $50,000 in...
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