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From Roger Baron: 9th Circuit Holds Private Medicaid Insurer’s Reimbursement Claim in Not Permitted by Federal Statute

Reprinted with Permission from Roger Baron

The 9th Circuit Court of Appeals recently handed down its decision in Parra v. PacifiCare of Arizona, No. 11-16069, holding that a private insurer operating as a Medicare Advantage Organization Plan is not permitted to bring an action in federal court seeking reimbursement for $136,630.90 from a tort settlement secured by survivors of the deceased in a wrongful death action.  The Court holds that the federal statute, 42 U.S.C. § 1395y(b)(3)(A), “was intended to allow private parties to vindicate wrongs occasioned by the failure of primary plans to make payments.”  This statute does not authorize a suit for reimbursement against its insured (or survivors) for reimbursement.

Please note that a contrary decision was recently rendered by the 3rd Circuit, with the U.S. Supreme Court denying cert in that case on Monday of this week.  This opinion distinguishes the contrary 3rd Circuit’s decision on the basis that the suit filed there dealt with a claim lodged directly against the tortfeasors.  In this case, the suit was brought against the survivors of the deceased insured, not against the tortfeasor.  Language from this opinion addressing the 3rd Circuit’s decision, found on the top of page 14 of the slip opinion, is set forth here:

In re Avandia Mktg., 685 F.3d at 356, held  that § 1395y(b)(3)(A) provided a MAO a private right of action against third-party tortfeasors for medical expenses advanced on behalf of plan participants. We need not resolve whether Avandia was decided correctly because it does not aid PacifiCare…  PacifiCare’s claim for relief is not against the insurer, or even against [the insured’s] estate for sums received from a primary plan for medical expenses, but rather against the Survivors and their claim to this disputed res. 

To view the 9th Circuit’s decision, click HERE

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