Court Determines Medicare Advantage Lien Was Invalid in Wrongful Death Med-Mal Action

By B. Smith

In Meador v. United States (D. Mass. Feb. 13, 2024)^[1], plaintiffs filed a wrongful death action and loss of consortium claim arising from treatment the decedent, an employee of the United States, received for her bipolar disorder. During litigation, plaintiffs moved for injunctive relief against United Health Group, LLC (United) contending that United’s Medicare Advantage Plan lien was invalid. The United States District Court of Massachusetts agreed, and the motion was granted.

The decedent was diagnosed with bipolar disorder and received treatment which included a prescription of lithium carbonate. After falling unconscious, she was diagnosed with lithium toxicity due to elevated levels of lithium in her blood and subsequently passed away. The decedent received Medicare benefits through United’s AARP Medicare Advantage Plan. A lien was asserted on behalf of United for the treatment she received from the time of her diagnosis until her death. The plaintiffs filed a motion to amend their complaint to add United, and a nurse employed by United, to the suit which the Court granted. In addition, the plaintiffs filed a motion for injunctive relief seeking an order from the Court declaring that United’s lien on the proceeds of the action was invalid. The plaintiffs argued that Congress created no private cause of action for United to recover against the beneficiaries of a malpractice lawsuit.

In reviewing the requirements needed for granting injunctive relief, the Court offered a brief history of the Medicare Act and Medicare Secondary Payer amendments noting that at the time these provisions were enacted, Medicare Advantage Organizations (MAOs) did not exist, and Congress likely did not anticipate the type of action like the one before the Court. The Court went on to note that CMS regulations did provide MAOs with the same rights to recovery from a primary plan as the government including the right to “recover its payments from any entity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment^[2],”, to “join or intervene in any action related to the events that gave rise to the need for services for which Medicare paid^[3],”  and to recover via subrogation from “any individual, provider, supplier, physician, private insurer, State agency, attorney, or any other entity entitled to payment by a primary payer^[4].”

The parties did not dispute that the private cause of action provision applies to MAOs with respect to reimbursement from primary payers. However, the plaintiffs asserted that they were not primary payers, and the private cause of action did not extend to the beneficiaries of a lawsuit.

Citing to Aetna Life Ins. Co. v. Guerrera, 300 F.Supp.3d 367, 372-374 (D. Conn. 2018) and its progeny^[5],  the Court found that United did not have a private cause of action against beneficiaries, their attorneys, or other non-primary payers. The Court also noted that the plaintiffs were not seeking medical expenses but compensation for damages together with interest, costs, and attorneys’ fees. As such, the Court concluded that the plaintiffs demonstrated a reasonable likelihood of success on the merits of defeating United’s lien.

With respect to the likelihood of irreparable harm if injunctive relief was not granted, the plaintiffs argued that United’s lien would chill settlement negotiations and lead to no recovery based on the amount the lien, litigation costs, and the cap on recovery. The Court agreed, rejecting United’s argument that the mere presence of the lien would not chill negotiations. The Court also found that the balance of equities and public interest factors weighed in favor of injunctive relief, allowing them to negotiate and potentially resolve the claim without incurring unnecessary litigation costs.

IMPAXX Commentary

The Court relied heavily on the type of claim, as well as the relief being sought, in determining that United did not have a private cause of action against the plaintiffs in this case. The Court placed the burden of lien satisfaction directly on the primary payer.

This case illustrates the need to identify not only potential lienholders but also whether the facts of the claim negate a plan’s right to reimbursement from the plaintiff.

If you have questions about this case, or would like to learn more about how to you can establish a program for Medicare and Medicare Advantage Lien resolution, please contact the IMPAXX Settlement Consulting team at [email protected].

[1] No. 22-cv-40024-DJC, 2024 U.S. Dist. LEXIS 24796
[2] 42 C.F.R. § 411.24(g)
[3] 42 C.F.R. § 411.26(b)
[4] 42 C.F.R. § 411.26(a)
[5] The Court also cited to Parra v. PacifiCare of Ariz., Inc., 715 F.3d 1146, 1154-55 (9th Cir. 2013) (concluding that because the MAO did not advance a claim against the primary plan “or even against [decedent]’s estate for sums received from a primary plan for medical expenses,” the MAO did not establish that it had a private right of action against the survivors and their non-medical related wrongful death claims); MSPA Claims 1, LLC v. Halifax Health, Inc., 295 F.Supp.3d 1335, 1340 (M.D. Fla. 2018) (holding that “[b]y its terms,” the private right of action “only applies to primary plans” and dismissing MAO’s claim against entity that received payment from the primary plan); cf. Humana Ins. Co. v. Paris Blank LLP, 187 F.Supp.3d 676, 681-82 (E.D. Va. 2016) (concluding that MAOs  may maintain suit against law firms and attorneys for recovery of conditional payments); MSPA Claims 1, LLC v. Bayfront HMA Med. Ctr., LLC, No. 17-cv-21733, 2018 WL 1400465, at *5 & n.8 (S.D. Fla. Mar. 20, 2018) (concluding that “MAOs, having the same recovery rights as the Secretary, have a right of action to recover from a provider,” but acknowledging that another court, Halifax Health Inc., 295 F.Supp.3d at 1340, had “recently reached the opposite conclusion”).