Humana Med. Plan, Inc. v. W. Heritage Ins. Co.

• Decision Date: 16 March 2015
• Docket Number: Case No. 12–20123.
• Citation: 94 F.Supp.3d 1285
• Parties: HUMANA MEDICAL PLAN, INC., Plaintiff, v. WESTERN HERITAGE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Southern District of Florida

94 F.Supp.3d 1285

HUMANA MEDICAL PLAN, INC., Plaintiff

v.WESTERN HERITAGE INSURANCE COMPANY, Defendant.

Case No. 12–20123.

United States District Court, S.D. Florida.

Signed March 16, 2015.

Eileen Kuo, Thomas H. Lawrence, Lawrence & Russell, PLC, Memphis, TN, Michael P. Abate, Dinsmore & Shohl, Louisville, KY, Daniel Alter, GrayRobinson PA, Fort Lauderdale, FL, for Plaintiff.

Jennifer J. Capabianco, Selman Freitman, LLP, San Francisco, CA, Neil Selman, Law Firm of Selman Breitman, LLP, Los Angeles, CA, Lewis F. Collins, Jr., William Philip Schoel, Butler Pappas Weihmuller Katz Craig, Tampa, FL, for Defendant.

ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

MARCIA G. COOKE, District Judge.

Plaintiff Humana Medical Plan, Inc. filed a Motion for Summary Judgment and Memorandum in Support (ECF No. 48). Defendant Western Heritage Insurance Company filed its Opposition to Plaintiff Humana Medical Plan, Inc.'s Motion for Summary Judgment (ECF No. 53), to which Plaintiff Humana Medical Plan, Inc. filed its Reply in Support of Motion for Summary Judgment (ECF No. 55).

I have reviewed Plaintiff's Motion for Summary Judgment, the Response and Reply thereto, Plaintiff Humana Medical Plan, Inc.'s Statement of Undisputed Material Facts in Support of its Motion for Summary Judgment (ECF No. 49) and attached exhibits, Defendant, Western Heritage Insurance Company's Statement of Additional Undisputed Material Facts Opposing Plaintiff, Humana Medical Plan, Inc.'s Motion for Summary Judgment (ECF No. 54) and attached exhibits, the record, and the relevant legal authorities. For the reasons provided herein, Plaintiff Humana Medical Plan, Inc.'s Motion for Summary Judgment and Memorandum in Support is granted.

I. BACKGROUND

This is Humana Medical Plan, Inc.'s (“Humana”) action to recover conditional payments of Medicare benefits it made with respect to medical expenses that Mary Reale (“Mrs. Reale”), a Medicare beneficiary and enrollee, incurred. Humana brings this action against Western Heritage Insurance Company (“Western Heritage”), alleging that Western Heritage, as a primary payer, must now reimburse Humana for the conditional payments Humana made on behalf of Mrs. Reale.

Humana offers Medicare Advantage plans under a contract with the Centers for Medicare and Medicaid Services (“CMS”). Pl.'s Stmnt. Undisputed Material Facts ¶ 1. Mrs. Reale was enrolled in a Humana Gold Plus Medicare Advantage Plan when she sustained injuries in a slip-and-fall accident at Hamptons West Condominiums (“Hamptons West”) on or about January 21, 2009.Id. at ¶¶ 2–4. Mrs. Reale obtained medical treatment for her injuries, and her healthcare providers billed charges totaling $74,636.17. Id. at ¶¶ 5–6. Humana discharged Mrs. Reale's medical charges for a total of $19,155.41. Id. at ¶ 7. Mrs. Reale then filed a personal injury action against Hamptons West on June 1, 2009 in the 11th Judicial Circuit Court in and for Miami–Dade County, Florida. Id. at ¶ 8. As Hamptons West's liability insurer, Western Heritage and Hamptons West entered into a settlement agreement with Mrs. Reale to resolve all issues regarding liability for a sum of $115,000.00. Id. at ¶¶ 9, 11. In that settlement agreement, Mrs. Reale attested that she had no outstanding Medicare liens that could represent a lien or claim against the proceeds she received from Western Heritage. Id. at Ex. 5. Additionally, a letter from CMS dated December 3, 2009 confirmed that CMS had no record of processing Medicare claims on behalf of Mrs. Reale. Def.'s Stmnt. Additional Undisputed Material Facts, Ex. 1.

Western Heritage eventually learned of Humana's lien rights and attempted to include Humana as a payee on its draft settlement agreement with Mrs. Reale. However, Mrs. Reale opposed Western Heritage's attempts to include Humana as a payee on the settlement check because she disputed the amount of Humana's lien. Id. at Ex. 2. The state court judge ordered Hamptons West to tender full payment to Mrs. Reale without including any lien holder on the settlement check. He simultaneously ordered Mrs. Reale's counsel to hold sufficient funds in a trust account to be used to resolve all medical liens/rights of reimbursement. Id. at Ex. 3. As a result of the state court order, Western Heritage tendered the full settlement amount to Mrs. Reale, with the understanding that Mrs. Reale and her attorney would reimburse Humana. Pl.'s Stmnt. Undisputed Material Facts ¶ 13.

Humana and Mrs. Reale failed to agree on the amount Humana was to be reimbursed so Humana brought suit against Mrs. Reale and her attorney in the United States District Court for the Southern District of Florida on May 7, 2010. See Humana Medical Plan, Inc. v. Reale, No. 1:10–CV–21493–MGC. Humana filed a Notice of Voluntary Dismissal of its action against Mrs. Reale and her attorney on November 9, 2011. Id. at ECF No. 59. Mrs. Reale then brought suit against Humana in the Circuit Court for the Eleventh Judicial Circuit in and for Miami–Dade County, Florida seeking a declaration of the exact amount she owed Humana pursuant to Humana's lien. See Mary Reale et al. v. Humana Medical Plan, Inc., No. 10–31906CA30 (Fla. 11th Jud. Cir. Ct. June 4, 2010). The state court found that Mrs. Reale had recovered 33.75% of the full value of her claims in her settlement with Western Heritage and therefore had recovered 33.75% of the total benefits paid by Humana, or $6,464.95. Pl's Stmnt. Undisputed Material Facts, Ex. 10. The state court then further reduced that number by 43%, taking into account the pro-rata share of fees and costs incurred in securing the settlement agreement, thus holding that Humana was entitled to reimbursement in the amount of $3,685.03. Id. Humana has appealed the determination of the state trial court to the Third District Court of Appeals, but that court has not yet rendered a decision. Humana filed the instant action against Western Heritage on May 7, 2010.

II. LEGAL STANDARD

Summary judgment is appropriate if “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”Fed.R.Civ.P. 56(a). The existence of a factual dispute is not by itself sufficient grounds to defeat a motion for summary judgment; rather, “the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute is genuine if “a reasonable trier of fact could return judgment for the non-moving party.” Miccosukee Tribe of Indians of Fla. v. United States, 516 F.3d 1235, 1243 (11th Cir.2008) (citing Anderson, 477 U.S. at 247–48, 106 S.Ct. 2505 ). A fact is material if “it would affect the outcome of the suit under the governing law.” Id. (citing Anderson, 477 U.S. at 247–48, 106 S.Ct. 2505 ).

In deciding a summary judgment motion, the Court views the facts in the light most favorable to the non-moving party and draws all reasonable inferences in that party's favor. See Davis v. Williams, 451 F.3d 759, 763 (11th Cir.2006). The Court does not weigh conflicting evidence. See Skop v. City of Atlanta, 485 F.3d 1130, 1140 (11th Cir.2007). Thus, upon discovering a genuine dispute of material fact, the Court must deny summary judgment. See id.

The moving party bears the initial burden of showing the absence of a genuine dispute of material fact. See Shiver v. Chertoff, 549 F.3d 1342, 1343 (11th Cir.2008). Once the moving party satisfies this burden, “the nonmoving party ‘must do more than simply show that there is some metaphysical doubt as to the material facts.’ ” Ray v. Equifax Info. Servs., LLC, 327 Fed.Appx. 819, 825 (11th Cir.2009) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). Instead, “[t]he non-moving party must make a sufficient showing on each essential element of the case for which he has the burden of proof.” Id. (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). Accordingly, the non-moving party must produce evidence, going beyond the pleadings, to show that a reasonable jury could find in favor of that party. See Shiver, 549 F.3d at 1343.

III. DISCUSSION

Humana brings this Motion for Summary Judgment as to Counts I and II of the Complaint seeking (1) a declaration that Western Heritage remains liable to Humana under the Medicare Secondary Payer Act even though it already settled all claims directly with Mrs. Reale and (2) double damages from Western Heritage under the Medicare Secondary Payer Act's private cause of action provision. To fully understand the basis of Humana's arguments, it is first helpful to review the statutory framework under which Humana brings its claims and then analyze each argument in turn.

A. The Medicare Regime

In 1965, Congress enacted the Medicare Act by adding Title XVIII to the Social Security Act, with the purpose of establishing a “federally funded health insurance program for the elderly and the disabled.” Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 506, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994). The Medicare Act consists of five parts: Part A, Part B, Part C, Part D, and Part E. Parts A and B “create, describe, and regulate traditional fee-for-service, government-administered Medicare.” In re Avandia Mktg. Sales Practices and Products Liability Litigation, 685 F.3d 353, 357 (3d Cir.2012) (citing 42 U.S.C. §§ 1395c to 1395i–5 ; §§ 1395–j to 1395–w). Part C outlines the Medicare Advantage program, wherein Medicare beneficiaries may elect to use private insurers to deliver Medicare benefits. 42 U.S.C. §§ 1395w–21 –29. Part D provides for prescription drug coverage for Medicare beneficiaries, and Part E contains various miscellaneous provisions.

At the time of its inception, Medicare served as the primary payer of all its beneficiaries' medical costs. See Taransky v. Sec'y of U.S. Dep't of Health & Human Servs., 760 F.3d 307, 309 (3d Cir.2014). However, ...