Medicare Advantage Plan wins in Arizona Court of Appeals Case
Jeff Signor
May 27, 2014

The state appellate court in Arizona considered the issue of preemption regarding Medicare Advantage Plans: Does Part C of the Medicare Act and its associated regulations preempt Arizona’s anti-subrogation doctrine?  The court held in the  affirmative, and ruled that a Medicare Advantage Plan (MAP) may seek reimbursement for medical expenses it paid for one of its enrollees from the settlement of claims under the Medicare Secondary Payer (MSP) Act See Estate of Ethridge v. Recovery Management Systems, Inc. et al.

In Estate of Ethridge, Mercy Care Advantage paid for the medical items and services related to the injuries Mrs. Ethridge sustained as a result of nursing home negligence.

The beneficiaries of Mrs. Ethridge’s estate settled for $1.2 million.  The decision is silent with respect to the amount of Mercy’s lien; however, the court does a good job of analyzing the bills and tracing it back to payment to the Mercy Care Advantage plan, a MAP.  This led to the MSP issues in play.

Franco Signor Commentary:  This is an important decision as the Federal Circuit Courts are divided in the issue of allowing MAP recovery rights under the MSP.  This state Appellate Court decision caries significant weight in the Ninth Circuit which remains teetering on whether to adopt the MAP rule of the Third Circuit Courts of Appeals in the In re Avandia ruling, or follow the Fifth Circuit decisions that have thus far not connected the MSP private cause of action to MAPs and allow a direct right of recovery.  The main takeaway for practitioners and claims adjusters is to obtain knowledge of the MAP prior to the settlement of the case.  As with traditional Medicare reimbursement rights, practitioners will want to secure finality to a settled case as opposed to answering letters months after the case settles.  We recently blogged about how traditional Medicare is sharing MMSEA Reporting data with MAPS, and this is leading to interesting post-settlement letters.  See our recent blog on this issue.

At Franco Signor we offer a no-nonsense approach to MSP compliance that cuts through the MSP technical jargon and provides the practitioner with what is needed for successful compliance.   We can provide a plan of action that will allow claims to close and plaintiffs to receive their proceeds promptly.  Call us today — We look forward to serving you soon.