Qui Tam (Continued from page 24)


One circuit court of appeal derided such an approach as turning ev- ery corporation into an insurance company subject to the provisions of the Medicare Secondary Payer Act.7


2003 decision served as a catalyst for the 2003 amendments.


This development occurred when the same court rejected an amicus brief filed in the same case by Senator Charles Grassley.8


Senator Grassley is one of the


longstanding proponents of the Medicare Secondary Payer Act that had urged ex- panded corporate liability.9


Senator


“or otherwise” language of the 1997 amendment, Medicare asserted that it could seek recovery from employers who sponsored or contributed to third-party health insurance for their employees. However, several courts refused to extend liability to include such self-insured cor- porations.6


This


Grassley and others, in turn, moved rap- idly to overturn the decision in personally sponsoring the amendments in Title III of the 2003 Medicare legislation. How- ever, other problems arose that necessitated further legislation in 2003. Some courts10


had previously held that


few, if any, settlements of the underlying personal injury or tort action did not nec- essarily result in the settling entity becoming a primary payer under the terms of the statute that could be sued in a subsequent action. Other courts11


had


limited the private cause of action only to cases in which Medicare made a prompt payment of medical expenses.


The 2003 Amendments


The 2003 amendments were specifi- cally enacted to overturn the previously referenced court decisions that effectively prevented the private cause of action from becoming a useful weapon in personal injury litigation. The italicized changes to the 2003 amendments are as follows: - In 42 U.S.C. 1395y (2) was amended


10 6


Mason v. American Tobacco 346 F. 3d 36, 41-2 (2nd


Cir. 2003). 7 Id.


8 Id. at 43. 9 Id.


11


Thompson v. Goetzman, 337 F. 3d at 504 (5th Cir. 2003) (no evidence that employer had insurance of any kind); In re Orthopedic Bone Screw Products Liab. Litigation, 202 F.R.D. at 163 (MSP was not meant to include tortfeasors that merely fund; liability litiga- tion with their own assets or corporate bor- rowings); In Re Diet Drugs Prods. Liability Litigation, 2001 WL 283163 (MSP cause of action arises when the ‘primary plan’ is obli- gated to pay for the primary care at issue under a contract).


Thompson v. Goetzman, 315 F. 3d at 467- 69.


as follows in this subsection, the term “pri- mary plan” means a group health plan or large group health plan to the extent that clause (i) applies, and a workmen’s com- pensation law or plan, an automobile or liability insurance policy or plan (includ- ing a self-insured plan) or no fault insurance, to the extent clause (ii) applies. An entity that engages in a business, trade, or profession shall be deemed to have a self- insured plan if it carries its own risk (whether by a failure to obtain insurance or otherwise) in whole or in part.12 - In 42 U.S.C. 1395(y)(2)(B)(ii) A pri-


mary plan’s responsibility for such payment [to Medicare] may be demon- strated by a judgment, a payment conditioned upon the recipient’s compro- mise, waiver or release (whether or not there is a determination or admission of liability will demonstrate a plan’s responsi- bility to reimburse Medicare).13 - In Section 1395y (2) (B)(i) Reimburse- ment is no longer tied to anticipation of “prompt” payment because the Secretary of HHS may make conditional payments “if a primary plan has not made or can- not reasonably be expected to make payment with respect to such item or ser- vices promptly”.14


As part of the 2003 amendments, Con-


gress went further and held that these amendments would apply retroactively back to the passage of the original Medi- care Secondary Payer Act.15 In 2005, the United States Court of Ap- peals for the Federal Circuit in a particularly significant decision in Telecare Corp. v. Leavitt16


interpreted the 2003


amendments. The Court ruled that indi- (Continued on page 28)


12 13


Section 301 (b)(1) of legislation; 117 Stat 2222.


Section 301 (b) (1) of legislation; 117 Stat. 2222.


14Section 301 (a) of legislation; 117 Stat. 2222. 15


See Section 301 (d), 117 Stat. 2222; Brown v. Thompson, 374 F. 3d 253, 259-60 (4th


Cir.


2004- the amendments clarified rather than changed the law).


16409 F. 3d 1345 (Fed. Cir. 2005). 26 Trial Reporter Winter 2006


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