It’s Been A Big Week at the U.S. Supreme Court… The Court refused to hear a case involving the reimbursement rights of Medicare Part C plans, and upheld US Airway’s rights to recoup costs under ERISA.
Medicare Part C and Avandia
On Monday, the Court denied cert in the In Re: Avandia case, leaving a federal appellate court’s ruling intact which gives Humana -- the administrator of a Medicare Part C plan -- effectively the same rights Medicare would have in an action against the makers of the diabetes drug. Click here to read (p. 2). The insurer sued GlaxoSmithKline in 2011 to recoup the costs of medical care its subscribers required after taking Avandia, and the Third Circuit held that Humana had a viable cause of action against the drug maker, under federal laws traditionally applied to Medicare.
What does this mean for you?
The Supreme Court’s refusal to hear the Avandia case will probably complicate the work of attorneys trying to settle tort claims with Medicare Part C claimants. We believe Medicare Part C administrators will follow Humana’s path and seek reimbursement for payments made to their enrollees, and try to enforce those rights in federal courts. So we recommend that parties who settle personal injury cases should now try to identify claimants who received injury-related care from Medicare Part C plans.
US Airways v. McCutchen and ERISA
On the heels of the Avandia decision, the Supreme Court came out with a ruling yesterday that reinforces the rights of ERISA plans to recover costs under plans’ language. Click here to read.
The Court held that US Airways could recover costs of medical treatment for an employee who settled his personal injury claim, based on the terms of its employee benefit plan – and that unjust enrichment could not override that language. The Supreme Court reversed the Third Circuit’s 2011 ruling, which held that US Airways was not entitled to receive full reimbursement for medical expenses it paid on behalf of the worker, because full reimbursement was unequitable.
The former employee – James McCutchen – had argued that US Airways would receive a windfall, or be unjustly enriched, if it recovered the entire amount the company’s health plan spent on his medical treatment, without any designation for the legal costs he incurred to obtain that recovery. After his legal fees were addressed, McCutchen stood to receive less than US Airways sought to recover from him. In yesterday’s ruling, the Supreme Court held that where a health plan’s terms contradict the doctrine of unjust enrichment, the health plan’s terms apply.
What does this mean for you?
We recommend that plaintiff’s attorneys work to identify clients who may have received injury-related care from ERISA plans, and if clients received such care, what repayment obligations could be triggered. Parties must implement a procedure – beginning with case intake – to pinpoint healthcare reimbursement obligations as early as possible.
Stay tuned for further updates…
Leave a Comment