The Sixth Circuit held in Michigan Spine and Brain Surgeons, PLLC v. State Farm Mutual Automobile Insurance Company (No. 13-2430) that a health care provider can bring an action under the Medicare Secondary Payer (MSP) Act’s private cause of action provision against a non-group health plan (NGHP) without first demonstrating that the NGHP denied coverage based on the patient’s Medicare eligibility.
The decision backs away from the Sixth Circuit’s broad language in Bio-Medical Applications of Tennessee, Inc. v. Central States Southeast & Southwest Areas Health & Welfare Fund, 656 F.3d 277 (6th Cir. 2011), which implied that the private cause of action only applied to group health plans who denied coverage based on Medicare eligibility. In Michigan Spine, the Sixth Circuit declared its Bio-Medical holding dicta to the extent it could be read to apply to suits against NGHPs and declined to read the MSP statute so narrowly, finding that the intent of the statute was to allow providers to recover from all primary payers—including liability insurance carriers—who failed to pay in accordance with the MSP. State Farm’s interpretation of Bio-Medical, the Sixth Circuit warned, “would eviscerate the private cause of action as it relates to non-group health plans.” Id. at 8.
Having found that Bio-Medical is not controlling, the court next turns to the statutory language, which it finds inconsistent and unclear. Noting that “[w]hen statutory text is unclear, courts afford deference to and seek guidance from agency regulations,” the Court examines CMS regulations and legislative history. The court finds that the CMS regulations on what constitutes “taking Medicare into account” and the congressional intent behind the MSP—to curb health costs and protect the fiscal integrity of the Medicare system—further bolsters its conclusion that the private cause of action extends to all primary plans.
Crowell & Moring LLP submitted an amicus brief on behalf of Humana Inc. in support of appellant Michigan Spine and Brain Surgeons, PLLC.