care may seek reimbursement of its ex- penditures if an insurer or third-party later covers the costs.] UNITED STATES v. PHILIP MOR-
RIS INC., 116 F. Supp. 2d 131, 145 (D.D.C. 2000) [If primary payer has an obligation to pay for such costs, but does not and cannot reasonably be expected to do so, Medicare may make a conditional payment and later demand reimburse- ment from the primary plan.] U.S. v. RHODE ISLAND INSURER’S INSOLVENCY FUND, 80 F.3d 616 (1st
Cir. 1996) [The MSP pro-
vision prohibits Medicare payments to a beneficiary for medical expenses if pay- ment has been made or can be expected to be made promptly.]
Cases Plaintiffs Will Rely On To Support Their Position.
The Government Has Lost Those Cases Where The Parties Have
Brought The “Prompt Payment” Argument To The Court’s Attention THOMPSON v. GOETZMANN, 2002 U.S. App. LEXIS 25969 (5th
Cir.)
On December 17, 2002, the Fifth Cir- cuit Court of Appeals affirmed the trial court’s dismissal of the Government’s claims against an attorney who did not repay Medicare and a corporation that had settled a products liability case with a Medicare beneficiary. The plaintiff had sued after she was injured by an allegedly defective hip prosthesis. Although much of the opinion deals with the issue of whether a corporation that pays a settle- ment out of its own funds is a “self insured plan” the Court addressed the “prompt payer” argument and said that the MSP requires reimbursement only for condi- tional payments made by Medicare when another primary payer can reasonably be expected to pay promptly. EVANSTON HOSPITAL v. HAUCK,
1 F.3d 540, 544 (7th Cir. 1993), cert. de- nied, 114 S.Ct 921,510 U.S. 1091, 127 L.Ed.2d 215 (1994). Medicare paid $270,760.24 in Medicare benefits on be- half of Hauck. Hauck won a $9.6 million judgment in a lawsuit. The court said “the Medicare secondary payer provision is intended to keep the Government from paying a medical bill where it is clear an insurance company will pay it instead. The Medicare
law...forbids payment where a third party can reasonably be ex- pected to make prompt payment.... A court judgment five years in the future in no way can be considered the kind of cer- tain, prompt third party payment Congress had in mind when it wrote the Medicare statute.”
Spring 2003
IN RE DOW CORNING CORP,
Debtor (United States Bankruptcy Court, Eastern District of Michigan, Northern division) 250 B.R. 298, 2000 Bankr. LEXIS 861. Facts: the Government was seeking to
recover money it paid to Medicare ben- eficiaries in the breast implant litigation. This is what the Court said: The Government must establish that
the party against whom it seeks to re- cover—Dow Corning—is the primary payer and that Medicare is the second- ary payer within the meaning of the Medicare Secondary Payer Act (MSPA). The Court explained the Medi-
care system: recall that when an eligible federal beneficiary has no other insurance coverage, Medicare is the primary payer and has sole responsibility to pay for that individual’s medical care. But where other insurance is available the MSPA generally strives to make Medicare the secondary payer. It does so by prohibiting Medicare from making payments under cer- tain circumstances. Medicare acquires secondary payer status when it has paid for medical care covered by paragraph 2(A)(i) or 2(A)(ii) thereby rendering such pay- ments conditional. But the opposite holds true: Medi-
care is not a secondary payer if the entities listed have not paid and can- not reasonably be expected to promptly pay for health care. Before the United States can re-
cover in the context of paragraph 2(B)(ii), it must establish that when the Medicare payment was made the third party had already paid for such
medical care or could “reasonably be expected to do so promptly.” When Medicare pays for an item
or service to which neither 2(A)(i) or 2(A)(ii) applies such payment is not conditional and not subject to reim- bursement. As a result, Medicare does not ac-
quire Secondary Payer Status with respect to such payer. Accrual of Cause of Action in favor of the Government: Accrues at the time it learns that
a third party paid or could have paid in accordance with 2(A)(i) or 2(A)(ii) (citing 42 CFR 411.24(b)—HCFA may initiate re- covery as soon as it learns that payment has been made or could be made under worker’s compen- sation or any liability plan. Before the United States can re-
cover—it must establish that when the Medicare payment was made the third party had already paid for such medi- cal care or could reasonably be expected to do so promptly. The Elements of the Government’s Claim:
When it paid for medical ser- vices there was a reasonable expectation that the debtor would pay for such care promptly. Prompt payment is that which is made within 120 days or earlier of: date medical care provided or date claim is filed with insurer. The court said that liability claims can take a long time to re- solve and the claims in this case were hotly disputed—Thus it
(Continued on page 18)
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