MSPA Claims 1, LLC v. Covington Specialty Insurance Company—(C.J. Pryor; 11th Cir. 2/22/23).
When multiple insurers are liable for a Medicare beneficiary’s medical costs—for example, when the beneficiary is entitled to recover from both Medicare and a tortfeasor’s liability insurer—liability must be allocated between Medicare and the primary plan. Under the Medicare Secondary Payer Act, private insurers are “primary” payers, and Medicare or a Medicare Advantage Organization is the “secondary” payer. Here, a Medicare Advantage Organization paid benefits up front and then sued the primary private insurer under the Medicare Secondary Payer Act (the “Act”) to recoup their costs.
The private insurers (in two consolidates cases) argued that the Medicare Advantage Organization was barred from recouping its costs because it waited more than a year to make a claim (and the policy required claims to be filed within a year), and because the Florida Motor Vehicle No-Fault Law statute requires that a presuit demand be made prior to filing suit.
The Medicare Advantage Organization did not deny that it violated the policy by filing a claim after the one-year deadline, and it did not deny failing to make a presuit demand ordinarily required under Florida law. Instead, it argued that both the policy requirements and Florida’s presuit demand statute were preempted by the cause of action under the Act, so it didn’t have to comply with either.
The district court agreed with the private insurers and granted summary judgment. The Medicare Advantage Organizations appealed.
On appeal, the Eleventh Circuit noted that the Medicare Secondary Payer Act provides a three-year claims-filing period, two years longer than the deadline for filing a claim under the policy at issue in the case. The text of the law only applies that 3-year deadline to claims by the government, not a Medicare Advantage Organization, so the preemption argument fails.
The Eleventh Circuit also agreed with the lower court that Florida’s presuit demand requirement under the Florida Motor Vehicle No-Fault Law was not preempted. There are three classes of preemption: field preemption exists “when a congressional legislative scheme is so pervasive” that we can reasonably infer “that Congress left no room for the states to supplement it”; express preemption, 4 which arises when the text of a federal statute explicitly manifests Congress’s intent to displace state law; and conflict preemption may occur “when it is physically impossible to comply with both the federal and the state laws” or “when the state law stands as an obstacle to the objective of the federal law.” Put simply, none of these applied. Florida’s pre-suit demand requirement does not meet make it impossible to comply with federal law. The statutory notice requirement and corresponding 30-day cure period are procedural requirements that may result in a brief delay. But the Florida law does not prevent or meaningfully impede the reimbursement of Medicare Advantage Organizations that Congress sought to facilitate. Affirmed.