Arbitration & Mediation

6th Circuit Finds No Qui Tam Standing Under Medicare Secondary Payer Act

By Christopher B. Hopkins, Esq.

We cover arbitration, mediation, exculpation, and various other ADR issues including settlement in our blog. Sometimes we travel a bit outside of the state of Florida and other times we meander just outside the walls of ADR issues. This case is a bit of both, seeing that it involves the Medicare Secondary Payer Act in a non-Florida case however it does involve Florida lawyers, health care providers, and a legal issue which, the plaintiff had succeeded, might have significantly altered how lawyers pursue medical payment claims and settlements.

In the 6th Circuit (Tennessee) case, Douglas B. Stalley v. Methodist Healthcare et al., the plaintiff brought seven separate (now consolidated) actions against various health care providers claiming that they violated the Medicare Secondary Payer Act (MSP), 42 U.S.C. 1395(y)(b). According to the court, no real standing existed and Stalley never alleged any damages, he simply claimed that the MSP was a qui tam statute.

MSP allows Medicare to seek reimbursement for any conditional medical payments from the primary payer if the primary payer is responsible to pay. This creates a system where the beneficiary gets the medical treatment on Medicare's dime but the Medicare is entitled to reimbursement once there is a judgment, waiver or release of payment for medical services.

Stalley took the position that he could stand in the shoes as a private attorney general and bring suit, much like under the False Claims Act. The court, however, found the MSP empowered individuals to bring suit for themselves and the government to bring suit for itself, but not a cross-over or qui tam situation. In fact, the court was so strong in its sentiment that it deemed the plaintiff to be a "self-appointed bounty hunter." Not good.

But, for the rest of us, we should not anticipate a new niche practice of qui tam Medicare cases.

Full post as published by Florida Arbitration Law on March 20, 2008 (boomark / email).