Qui Tam (Continued from page 26)


vidual corporations alone that sponsor or contribute to group health plans may be held liable based on the 2003 amend- ments for medical expenses that it caused to its individual employees covered by Medicare. In the case, Telecare sponsored a pre- paid health care plan for its employees through Kaiser Foundation Health Plan. One employee incurred medical expenses under the Telecare-sponsored plan and Medicare. Medicare initially paid the ex- penses, thus triggering liability under the Medicare Secondary Payer Act. The Court rejected Telecare’s argument that its in- surer, Kaiser, should be held liable for the Medicare payment of medical expenses. The Court held that the entity alone can be sued based on the 2003 amendments.17 Prior to Telecare, in Baxter v. United States of America,18


employers that did


have self-insurance that included excess coverage were also covered under the Medicare Secondary Payer Act. In Brown v. Thompson,19


the Fourth Circuit held


that as a result of the 2003 amendments, a self-insurance arrangement would qualify as a plan under the Medicare Sec- ondary Payer Act, whether formal or informal, if there was an indication to self- fund liability claims as they arise.


17409 F. 3d 1350-1355 (Fed. Cir. 2005). 18345 F. 3d 866 (11th 19374 F. 3d at 262 fn. 7.


Cir. 2003). 20See 42 U.S.C. 1395y(b)(1)(A)(ii).


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As a result of these important decisions, the only employers now excluded from potential liability under the private cause of action brought pursuant to the Medi- care Secondary Payer Act are limited to those that employ less than 20 employees for each working day in each of 20 or more weeks in a calendar year or the preceding calendar year20


and/or those with no in-


surance or insurance arrangements that are not intended to self-fund liability claims as they arise.


Types of Claims


As a result of the expanded number of entities that can be sued, certain, specific types of personal injury claims will be- come more valuable after the 2003 amendments. Nursing home and assisted living facili- ties that have liability insurance and cause injury to elderly residents, who invariably have Medicare coverage, would be sub- ject to larger recoveries in cases involving just medical expenses. Medical malprac- tice actions could be filed by Medicare beneficiaries and recipients against em- ployer entities and their employee physicians, and possibly, even third party administrators that negligently cause in- jury resulting in increased medical expenses paid by Medicare. Both bad faith and underinsurance actions will not be based solely on the outstanding medical expenses but twice the amount of the ex-


penses if paid by Medicare. As a result, an initial letter to an insurer carrier whether arising out of bad faith or un- derinsurance should reflect the fact that a qui tam action could be brought to re- cover twice the medical expenses incurred in the case. Products liability and slip and fall actions will be easier to file in cases that have large medical bills, despite the absence of lost wages, because many Medicare recipients and beneficiaries of- ten are not employed at the time of their injuries. In fact, any public or private entity and their individual employees, acting in the scope of their employment, could be sued for all acts of negligence to the extent of their liability insurance coverage resulting in any medical expenses paid by Medi- care. Workers’ compensation cases, particularly those involving occupational diseases, would no longer be governed by exclusivity provisions under state law if the employer and insurer refused to pay for medical treatment resulting in Medicare’s assuming liability.


Important Implications of the 2003 Amendments


The 2003 amendments have potentially


profound implications involving all types of personal injury litigation. Moreover, the sheer number of current and future ben- eficiaries highlight the importance of the private cause of action under the Medi- care Secondary Payer Act. Currently, there are forty-one (41,000,000) million ben- eficiaries in the Medicare health care system. In five years, an additional sev- enty-four (74,000,000) million baby boomers will start entering the Medicare system.


The private cause of action has other


important advantages available as con- trasted with other remedies under state and federal personal injury law. The pri- vate qui tam action means literally anyone or any organization may bring the federal action against the third party wrongdoer(s), not just the victim, the victim’s spouse or the victim’s children. A recent example is an action filed by a Massachusetts seniors’ organization21 against all tobacco companies for the re- covery of all Medicare expenses paid since 1999.


The third party wrongdoer is barred (Continued on page 30)


21


United Seniors Association Inc. v. Philip Mor- ris USA, Case Number 05-11623 RGS (D. Mass. 2005).


28 Trial Reporter Winter 2006


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